Friday, October 22, 2010

Networks Say No To Google TV

Cablevision is fighting to not pay for Fox broadcast networks. The networks are excited to be getting license fees from other MSOs to improve their bottom line. So why would the networks want to hurt their new revenue model with a product meant to increase consumer cord cutting. "The move marks an escalation in ongoing disputes between Google and some media companies, which are skeptical that Google can provide a business model that would compensate them for potentially cannibalizing existing broadcast businesses." And by that, the networks mean this new second revenue stream.

Still isn't that what access on a website of full length programming entails. Those not willing to pay for HBO and Showtime simply wait a year for True Blood and Dexter to be released on DVD and out on Netflix. Some buy it later on iTunes. Like the movie industry with windows on release dates to different platforms, a similar model may need to be built for broadcast shows and the web. Watch Modern Family now on cable or 6 months later on Web TV.

Still it is hard for the networks to put the genie back in the bottle. Ad revenue through commercials is not enough and the networks are finally enjoying a second source of revenue through license fees. The challenge is that the consumer is tired of paying more and is ready for ala carte to pay less. They would rather just buy the show they want to watch and no longer the whole network. With free content on the web, the consumer is moving away from the cable box to a cheaper alternative. As the adage goes, "Why buy the cow when the milk is free".

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