Commentary

Not Dancing With The One Who Brung You: Mulling Seismic Shifts In TV Distribution

by Wayne Friedman , Staff Writer, January 28, 2014

All TV/media companies take one step to the left.

What’s all this shifting of TV chairs? Broadcast networks becoming cable networks? Cable networks becoming Internet video companies? YouTube videos becoming media conglomerates?

Fox and CBS previously threatened to become cable networks because of Aereo. Now HBO threatens to become an Internet subscription video-on-demand (SVOD) provider because of Netflix. World Wrestling Entertainment, meanwhile, is starting an ad-supported Internet network.

Especially in light of its popular HBO Go app, Richard Piepler, chief executive officer of HBO, has hinted about bypassing cable, satellite and telcos to compete with Netflix and other SVOD providers.

Ultimately all TV companies want to move closer to media-savvy consumers, especially with all the new electronic devices. Seismic TV shifts seem not just threatening but about to become reality.

HBO still needs to think about its traditional distribution networks, with some $4 billion worth of partnerships to consider, according to Piepler. But, he said, “Anything that helps us get to the consumer off a cheaper base is terrific to us.”

While HBO thinks about moving off the likes of cable systems, Netflix could go partly in the other direction.

Cable operators are considering putting Netflix on their set-top boxes. But, just as with HBO, it isn’t an either-or scenario. Like anything else with modern-age TV content providers, taking on new distributors is an effort to grab more shelf space in the digital media world.

Broadcast networks? Many won’t be moving towards their competitors, but rather running away from the likes of Aereo. Broadcasters’ closest competitors right now are mature cable networks, over-the-top programming services, and ad-supported digital video platforms.

Sounds easy. Now the hard part: not only telling traditional TV distributors but also marketers/advertisers and, oh yeah, consumers.

2 comments about "Not Dancing With The One Who Brung You: Mulling Seismic Shifts In TV Distribution".

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Bruce May from Bizperity, January 28, 2014 at 4:08 p.m.
I remember not so many years ago that to even suggest that network and cable television would be considering these kinds of moves would be laughable in the industry. The level of disruption driven by new technology has outpaced even my radical expectations and at this point I think it is going to become far more extreme and simply weird. Since I have been on the “broadband TV” side of this equation I have to say that I lam loving every minute of this. I do have sympathy for the senior leaders on the cable/network side as they try to navigate through these difficult waters yet I can’t quite hide the grin on my face as I tell many of my industry friends, “I told you so.” I am still waiting for niche content to rise up and take on its proper role in all of this. When it does I will just say “told you so” all over again.
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Joanna Breen from Flying Leap Media, January 29, 2014 at 3:55 p.m.

A wise VC I know says of her investing philosophy: "Things that suck will go away". Think about the rapidly evolving (i.e. chaotic) TV business from a consumer's point of view. How long do you think they are going to keep paying for cable AND Netflix, AND HuluPlus, AND ITunes or Amazon for individual shows? The good news for all of us is that so much great new programming is being made and much of it can be found on more than one service. The bad news for traditional TV distributors is that sooner rather than later, consumers will find what they want to watch wherever it is most convenient and costs the least.