Wednesday, September 8, 2010

The Merging of Broadcast and Cable

So what is the difference between say ABC and Bloomberg, or NBC and USA. To today's audience, they are both simply networks on their cable line-up. One may be more general interest, one may or may not be more niche. This merging into one box called TV content may signify the greater trend occurring. In fact, broadcast networks own cable nets just like NBC owns USA.

So that there is news that broadcast and cable news operations may combine is simply the beginning to full scale ownership of the operation. CBS and CNN sharing news resources, great; how about one corporation simply merging with the other. "It’s all understandable: With the news industry battered by a still-foundering economy and splintered media landscape, questions of whether such marriages of convenience and economic viability are the future for broadcast news become inevitable."

To me, it is inevitable that content companies will continue to merge to find their economies of scale. Both in news and entertainment content. Where there used to be many cable operators in the market, today the top 5 own a vast majority of the marketplace. For content companies, some mergers have occurred and more seem forthcoming. At the same time, the merging of contet companies with distributors may be the end result of this slippery slope. With a Comcast and NBC merger comes also the concern that too much power in the hands of too few will limit new growth and innovation, especially that Comcast owns the broadband pipeline as well as the cable connection. Or lead to the death of TV at the hands of a wireless revolution.

Sirius needs Howard, does Howard Stern need Sirius

There was once a time when all negotiations were done behind closed doors; but today, most seem to occur across the media. The same holds true for the Howard Stern and Sirius negotiations. "While some speculate that Stern on Thursday was merely beginning the process of negotiating in public, the shock jock also indicated that he has no desire to bash his employer like he did before he ditched terrestrial radio for satellite radio." Of course, his agreement doesn't expire till the end of the year, so all this could simply be posturing for the best possible deal.

But exclusive content can drive distribution and so it seems that Sirius needs Howard more than Howard needs Sirius. Howard has many more choices although restarting in a new medium requires more energy than perhaps even Howard isn't willing to give. Going back to broadcast for Howard may be fodder that Howard made a mistake going to Sirius and is in need to reclaim his "King of all Media" crown. I expect that at the end of the year, Howard and Sirius will renew their vows.