Under Fire: Business Model Of Selling TV Shows To Digital Platforms

Some senior media executives are at odds about whether selling TV programs to Netflix, Amazon and other digital video platforms is good for business in the long term for content owners.

On CNBC’s “Squawk on the Street” on Tuesday, David Zaslav, president/CEO of Discovery Communications, didn’t think it has worked all that well. “We have all been enamored with all these devices. And we have sold our content for a lot of these devices and to [platforms], and created business models that don’t work.”

“I disagree,” says Les Moonves, president/CEO for CBS Corp. “Dealing with Netflix, Amazon  and Hulu — we have made over $2 billion in four years from those services.” Barry Diller, chairman/senior executive of IAC/InterActive Corp, chimed in: “He has made a fortune.”



Siding to an extent with Zaslav’s position, Senior Research Analyst at FBR Capital Markets, CNBC, Barton Crockett said, speaking later in the day: “In the entertainment part of the TV ecosystem, you've got some trouble.”

He added: “Les [Moonves] is clipping a $2 million check — that’s great. In the meantime, there are a lot of questions among investors about the durability of the traditional TV network stocks, given their reliance on audiences that are increasing watching Netflix when it comes time for entertainment.”

Good news -- content still rules, and so do those who create it. “The winners are going to include the major content companies that would likely remain at the top of the food chain,” says Tuna Amobi, senior media and entertainment analyst for Standard & Poor’s. “We have buy recommendations for a lot of content companies."

But when it comes to new digital media video platforms, as well as those traditional pay TV providers, there will be big changes. Amobi says: “In a world of platform agnostic delivery, there is going to be major shakeout over the next several years, in no small measure because of over-the-top video.”

8 comments about "Under Fire: Business Model Of Selling TV Shows To Digital Platforms".
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  1. Ed Papazian from Media Dynamics Inc, October 13, 2015 at 4:54 p.m.

    It's amazing to me that so many of these people just don't get it. No matter what the short term gain in dollars, why sell your audience "enemy" quality content so you can lose still more viewing tonnage and slowly drive ad dollars away from your network or cable channel---- along with a growing amount of ad dollars. Maybe Leonard is right.  Some of these folks sound a lot like dinosaurs.

  2. Leonard Zachary from T___n__ replied, October 14, 2015 at 12:20 p.m.

    becuase that's where the Growth is and the new generation of Users/viewers. Staying alive means staying relevant.

  3. Leonard Zachary from T___n__, October 14, 2015 at 12:21 p.m.

    the Best quote came from Barry Diller: the Ratings are a 75 year con game and tech adverse

  4. Ed Papazian from Media Dynamics Inc, October 14, 2015 at 1:32 p.m.

    It's all well and good for Barry and others to claim that the TV ratings are irrelevant and that a new system---I assume he means one where every "viewer" accesses content directly and is automatically counted----will be much better.But how long is it going to take for this wonderful concept to happen to a meaningful extent? Are we going to wait until 90% of all TV viewing is done via YouTube's "user generated" content? If so, I'm afraid we're in for a very long wait.

    Also, if the TV networks and cable channels cease to fund and present "quality" primetime fare as well as news, sports, and other "premium" content, what will YouTube's copyright-infringing posters be "generating" as free content?

    Returning to YouTube, I use it quite often to do research for my book, among other writings. This includes tracking down "user-generated" episodes of recent and old TV series. And, despite the fact that not everything I look for is available and the quality is sometimes not very good, I find YouTube to be a very usefull tool. But I can't imagine that a lot of people are spending 3-4 hours a day---every day---looking at such fare on YouTube. In fact, the data on YouTube usage that I see indicates that such usage is quite low---volumetrically--like a few minutes per day when projected against the total population.

  5. Leonard Zachary from T___n__ replied, October 15, 2015 at 5:05 p.m.

    Ed respectfully if you want to complete your research, find a buddy that has a Plex media server and ask them if they can invite you to share their content. You'll never go back to a payTV bundle....

  6. Ed Papazian from Media Dynamics Inc, October 15, 2015 at 7:04 p.m.

    Leonard, I hate to admit it but I don't even know what a Plex media server is----I'll have to check that out. Thanks.

    As for my own personal tastes in TV/video fare, they are quite diferent from the content I research for my book and other publications. Whie I feel obliged to sample the networks' primetime fare--at least most of it---so I can comment on the shows or genres as appropriate, there is not a single one of these shows that I watch for personal entertainment. The same goes for many other forms of TV, including the early and late evening newscasts, the early AM talking head shows, the late night talk-variety stuff, etc. Instead, I prefer some of the oldies---like "Gunsmoke", "Wild, Wild West", "Barney Miller", "The Honeymooners" , etc., some of the cable  "originals" like "The Sopranos", Mad Men", "Boardwalk Empire", etc. plus documentaries and various movie classics---old and new.

    Nevertheless, I'll investigate the Plex media server and see what it has to offer.

  7. Leonard Zachary from T___n__, October 21, 2015 at 12:50 p.m.

    Ed it's not what the Plex media server has to offer but what your Friend who has the Plex media server has and if you have multiple friends, tyhen you have access to a whole new universe....

  8. Ed Papazian from Media Dynamics Inc, October 21, 2015 at 3:14 p.m.

    Leonard, as I said and keeping an open mind, I'll check it out. I can't promise you that I will find all of the new vistas fascinating as I'm one of those pretty atypical types---but I promise to try. Anyway, thanks again for the tip.

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