If you’re looking to do TV streaming, Google may be your best friend
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….
There’s an interesting Michael Wolff piece in New York about the declining value of content. (Disclaimer: I used to work for Michael in the early 90s) While I generally agree with the concept that content is becoming more widespread and that there is an increase in the amount of content being produced, I fundamentally disagree with his assumption that people do not pay for content. If that were truly the case, where would box-office revenues go? What about video and DVD rentals? His pointing out the fact that changes in behavior show that most people will steal music and movie content on the Internet is largely due to the fact that there are no clear alternatives. Attempts to offer a crippled service like the new Napster or Pressplay are not enough (After all, if I pay for a service, why does the stuff I downloaded expire). Give us an all you can eat legal buffet at a price point that does not gouge us and we will come. Or start paying the artists and your case will be stronger when you tell us that we are starving them. Right now, many people pay for cable TV. Basic price gives you…