Thursday, March 18, 2010

The Future of Television

Earlier this month, a number of viewers in the northeast missed the first 15 minutes of the Academy Awards broadcast because of a dispute between Disney and Cablevision Systems.  The contract between the two had expired and, as the negotiation process got ugly, Disney pulled its signal from the system.  After issuing statements characterizing the other party as greedy and not caring about its customers, both sides finally came to an agreement that allowed the signal to be returned just after the Oscars began.

This was the second high profile dispute between a television broadcaster and a cable provider.  Fox and Time Warner had a similar battle late last year regarding the price of News Corp channels included in Time Warner subscriptions.  From all indications, this is just the beginning as broadcasters watch revenue from advertisers shrink and look for ways to make up for the loss.

Is the Business Model Obsolete?

As tensions between the broadcasters and subscription providers grows, I can't help but think that the current model for the industry is quickly becoming obsolete.  Broadcasters want more money for programming - subscription providers want more money for delivery of the programming - consumers want access to entertainment without paying more for their subscriptions.  Something has got to give . . .

I'm definitely not a media visionary, but I'm guessing that, now that internet bandwidths are increasing, it won't be long before we start downloading our television programs from the internet and sending them to our televisions wirelessly.  Although it's possible that we'll continue to pay companies like Comcast for subscription packages, it's also possible that we could end up paying the broadcasters directly through a monthly subscription or individually by the download.

The next five years will be very interesting to watch as another industry's business model becomes profoundly altered by the internet and the innovative and flexible companies take advantage of the opportunity to grow while those that don't significantly shrink or completely disappear.

No comments: