Posted on 09/25/2009 6:14:41 AM PDT by abb
Even the cable networks that are today’s multi-revenue stream darlings are destined for the same “digital destruction” as advertising-supported broadcast television, newspapers and other traditional media. It’s just a matter of time.
That likely scenario from former News Corp. president and COO Peter Chernin, represents the final blow to media conglomerates. which currently rely on their cable networks for at least 60 percent of their profits.
Whether niche cable programming can survive and thrive in a streaming on-demand video world “is the single biggest question facing the media industry,” Chernin said Wednesday during a roundtable discussion USC Annenberg School for Communications.
“At some point, it (cable) is vulnerable to the same disaggregation as everything else,” he said.
Chernin should know. Before leaving News this summer after 14 years to start his own content company, he partnered with NBC Universal to launch Hulu.com, a streaming online advertising-supported web site for mostly broadcast TV programs and some films. Despite its success, Hulu is expected to adopt a fee-based service to generate additional revenues in a digital marketplace where consumers generally can find what they want and access it on any device.
As Internet-connected TVs and streaming online video proliferate over the next several years, consumers will resist paying for cable and other content they can find online for free or individually pay for on demand. Such digital options will undercut cable’s existing business model.
Time Warner and Comcast, the two largest cable operators and owners of major cable program networks , are scrambling to get ahead of the curve by offering subscribers “TV Everywhere.” The new service — which is just getting underway — allows subscribers to access their favorite cable content on all other devices since it is not yet streamed online.
It sounds a lot like the old gatekeeper approach to media that cannot prevail in a ubiquitous digital marketplace.
One factor that could hasten cable’s fall is federally mandated a la carte pricing, according to Gordon Crawford, managing director of The Capital Group and a veteran media investor who also participated in the roundtable discussion on media’s future. Allowing consumers to pay for only the programs they want to view could mean the demise of two-thirds of niche cable channels that are otherwise assured revenues through existing bulk carriage agreements anchored by the universally popular likes of ESPN and CNN, Crawford said..
“The days you could protect those non-consumer friendly business models are gone,” Chernin quipped. His investment advice to others: Stay out of the US and western Europe, and away from broadcast, newspapers and traditional media.”
"Network evening newscasts will go dark after the '08 elections and their news divisions disbanded."
Walter Abbott, (b. 1950), Media observer, blogger and commentator
ping
Really the only reason we keep our cable is the convenience of just flipping through channels. It’s easier than figuring out which show you want to watch and typing it in online. TV is still better video quality in many cases, though that is changing.
The ability to see anything immediately rather than having to hunt for it is really the only remaining reason.
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=114305
Goodby: Forget :30 Spots, Write It On The House
http://www.theatlantic.com/doc/200910/moguls
The Moguls’ New Clothes
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=114241
TiVo: Ads Skipped In Acclaimed Shows
http://www.chicagoreader.com/TheBlog/archives/2009/09/24/sun-times-media-group-ceo-explains-it-all-to-you
Sun-Times Media Group CEO Explains It All to You
http://www.chicagotribune.com/business/chi-fri-sun-times-0925-artsep25,0,4553232.story
Chicago Sun-Times may have more time to negotiate terms of buyout
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/09/cbss-quincy-smith-want-to-make-case-against-hulu.html
CBS’s Quincy Smith wants to make case against Hulu
http://www.marketwatch.com/story/nbc-is-under-assault-and-beatles-still-no-1-2009-09-25
NBC is under assault from all sides
http://www.nypost.com/p/news/business/liquidation_threatens_debt_laden_hqD4GtA02ByK4N6eWv1MJO
Liquidation threatens debt-laden MGM
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aLOtFSXxc9aU
U.S. Newspapers ‘Need Cash Now,’ Group Tells Congress
We really like our Dish system, but it really rubs me the wrong way to be paying for the left wing channels we get with our package.
It seems like each month we have more non English channels on from Hispanic to various Asian channels.
Our choices should be like what we choose in a cafeteria, not something the do gooders want for free. So I’m all for a la carte pricing for cable and satellite. All CNN channels have been blocked since we had our Dish system installed in 2000.
“One factor that could hasten cable’s fall is federally mandated a la carte pricing, according to Gordon Crawford, managing director of The Capital Group and a veteran media investor who also participated in the roundtable discussion on media’s future. Allowing consumers to pay for only the programs they want to view could mean the demise of two-thirds of niche cable channels that are otherwise assured revenues through existing bulk carriage agreements anchored by the universally popular likes of ESPN and CNN, Crawford said..
“The days you could protect those non-consumer friendly business models are gone,” Chernin quipped. His investment advice to others: Stay out of the US and western Europe, and away from broadcast, newspapers and traditional media.”
I think cable TV—especially with QAM-encoded digital channels—will survive because they won’t suffer the bandwidth transmission issues that plague Internet Protocol TV (IPTV). And because digital cable TV can offer around 150-175 channels of programming, program selection is less of an issue, too.
mainepatsfan,
Take a look at the third story. Where this is headed is that the teams will do their own advertising, cutting out the networks. At some future date, the NFL teams (and colleges and other pro sports) will have their own networks to distribute the broadcasts.
http://www.washingtonpost.com/wp-dyn/content/article/2009/09/24/AR2009092401079.html
Mild-Mannered or Lily-Livered?
http://www.guardian.co.uk/media/pda/2009/sep/25/digital-media
Online news growth tailing off in 2009
http://www.boston.com/business/ticker/2009/09/new_england_pat.html
New England Patriots owner sells ads on ESPN website
The internet is going to destroy the satellite systems anyway. Did you see the WSJ story yesterday about how TV manufacturers are building sets with much more powerful innards which make them ‘internet ready?’
Bandwidth will continue to increase and take care of the issue. Just think of where we are today vs 10 years ago. Few had broadband back then. Now its almost universal.
It is all about control.
Dinosaur Media = you watch what we show when we show it.
New Media = you watch (or blog or surf) what you want when you want it.
Yes, you have to upgrade to get FOX News and now Fox Business.
We probably watch a dozen channels on a regular basis. There was a change in the bay area NBC stations a few years ago, and we didn’t get NBC for a few months. We didn’t know anything about the loss of the NBC channel until a visitor tried to get NBS and got the message that Dish had cancelled the contract with the local provider. He laughed.
This is offered where I live. Sounds good in theory, but it's not all it's cracked up to be. It costs $5 per channel, per month. Once you get more than a few channels, you might as well get the package.
I missed this article. “Did you see the WSJ story yesterday about how TV manufacturers are building sets with much more powerful innards which make them ‘internet ready?’”
Actually, we are hoping for that step to happen before our 20 year old RCA dies. I would like to be able to sit in my Lazy Boy with a remote keyboard and do my internet stuff on a large screen tv.
“This is offered where I live. Sounds good in theory, but it’s not all it’s cracked up to be. It costs $5 per channel, per month. Once you get more than a few channels, you might as well get the package.”
I think that once that happened across the country, we would see competition by the channels driving the cost down.
We could get by with 10-12 channels, and I’m paying a little over $50/month for my Dish package.
After 13 years with DirecTV, mainly since it was the only thing we could get more than 3 channels with where we lived and then for the NFL Sunday Ticket package, we recently switched to FIOS.
I was going to keep DirecTV for the Sunday Ticket package, but then FIOS offered the NFL Red Zone package and I said...Hmmmmm?
Nicest part...no tiers. Had to pay extra for things on DirecTV and they nickel and dimed me to death.
Seriously, or evenly seriesly, if you have access to FIOS, get it!
Whole house DVR is amazing and all the shows we like are available via "On Demand" so we don't have to use the DVR as much as we used to.
On another subject....did anyone bother to watch Modern Family and/or Cougar Town?
The previews looked extremely repugnant so was wondering how the ratings were skewed to make them appear as "Must See" shows.
That is exactly what I did, and for the same reason.
The funny twist to that is the fact that news corp ( FOX) owns DISH!
Check with your phone company to see if they offer the package.
Horse hockey.
Fox News Sues EchoStar [Dish Network] for Contract Breach (2007)
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