A New York startup is building the future of TV broadcast.
Having looked at how the modular by design approach impacted broadcast television, let’s now look at its impact on cable TV. The FCC and the cable TV industry recently came head to head when it comes to a la carte pricing . The concept of a la carte pricing is that consumers would be able to buy any TV channel in a model instead of being forced into buying a bundle of shows as part of the standard offering. The cable industry contends that a la carte pricing is bad because it will wreak havoc with the economic model of the cable business. It’s true that it will do so as large media companies like Viacom and Walt Disney currently force cable operators to broadcast their less popular channels in exchange for the rights to broadcast their top properties, like MTV or ESPN and will no longer be able to do so if a la carte becomes a reality. They will also have a harder time selling an audience package to their advertisers as there will no longer be any guarantee that buying an ad in a package that reaches MTV and Spike will ensure the same kinds of hits….
Reports that AT&T is planning on introducing a pre-paid card for online content show some potential new developments in the online space. If we were to follow the model further, we could see something new developing, with companies offering a basket of content for a fixed price. For example, imagine you would like to get a subscription to the Wall Street Journal online, access to some downloadable music, and latest sports stats. What if you could subscribe to a single service that would allow you to pay for all of those in one shot (and maybe receive a rebate as a result)? This is not dissimilar to the model currently used by cable television. In the United States, cable television has what is called a tiered structure. That means that channels are grouped in packages that are then sold as a whole. The most basic service includes the regular “free” networks (for people who have low or no reception), the next package above that generally offers an extended set that includes CNN, ESPN and a bunch of other channels. Then, on the third tier, you can buy more expensive channels like HBO or Showtime, which are not supported by advertising….