Commentary

New SVOD Services Need To Feed Big-Time Program Costs

More new TV video platforms will start this year. But there'll be a price to pay -- for all concerned.

For CBS' Les Moonves, this will come in the form of new subscription video-on-demand services -- like Netflix, Amazon and Hulu. Moonves hopes that new companies will pay TV networks decent fees for airing older episodes of shows -- like Netflix does. In turn, consumers will also need to open their wallets.

Viewers are getting primed for all this -- in different ways. For example, about half the country more or less delves into 'video-on-demand' of TV shows. That's right. But it isn't through traditional cable VOD-type services. It’s from home DVR units.

If consumers are already paying a $5 or $6 DVR monthly fee to a TV/video multichannel distributor, there already is a connection. What’s needed now is a more savvy subscription VOD company, like Netflix, to market the transition.

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Right now, no single SVOD company has enough programming heft to make this a reality. Neither Netflix nor Amazon has a wide range of network and cable programming to convince consumers to make the switch. Even Hulu -- with the likes of NBC, Fox and ABC programs in its stables -- can't truly be pitched as a pseudo-DVR alternative.

And TV viewers might always want a form of DVR under their control -- at least in the near term.

For CBS and other companies, a new wave of SVOD services -- paying handsomely for older programs or year-old episodes of current series -- is a good deal.  So are upcoming higher retransmission revenues.  But not buying the likes of TV Guide Network or Hallmark Channel.

That's because the goal is all about big-time costly programming, not something mid-size channels or others can support. That said, even CBS wants to start producing more for the bigger general interest cable networks.  But that would just be a starting platform to sell shows internationally and digitally.

For many networks -- cable and broadcast -- big time-shows will continue to demand big dollars. Somehow and somewhere, new VOD services will have to adjust to those business metrics.

 

 

1 comment about "New SVOD Services Need To Feed Big-Time Program Costs ".
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  1. Marc Schcher from MSS consulting, March 1, 2012 at 5:19 p.m.

    Do current and future SVOD services become competitors to broadcast and cable in the syndication marketplace

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