Thursday, January 7, 2010

Dolan To Programmers: Don't Price Yourself Out of Business

Jim Dolan has some advice for cable programmers (Scripps are you listening). He says that "huge affiliate fee increases are running the risk of pricing themselves out of business..." And Dolan my be partly right; greed can become a real killer to a marketplace. As consumers get fed up, they seek alternatives.

An example is the DVR. As programmers put too many ads in their programming schedule, consumers discovered that by time shifting programming, they could also fast forward through the ads. Raising programming fees will lead to new solutions. And one might be bypassing the cable operator. If Cablevision takes programming off their line-up, the consumer may find they can access the same programming directly through the web. No programming fees, but no more negotiation hassles either. The programmer will deal directly with the consumer.

TVs are becoming IP connected, consumers are watching more and more from web sites like Hulu, and others. And consumers are dropping cable subscriptions for other programming connections. So yes Jim, programming could be hurt by drop of their programming on your cable line-up, but cable operators could be hurt AS WELL. As your partnerships between programming and distribution disintegrates, consumers will move to the safer ground of web based programming. And you both lose subscription revenue.