Monday, December 13, 2010

Time Warner Views Netflix as a Fading Star

Check out this article in today's New York Times. Per Time Warner's CEO, Netflix has "jumped the shark" and will become a fading business. he refers particularly to the deals that Netflix has signed. "The relationship between Netflix and the media companies will most likely change drastically, beginning next year when a deal between the company and Starz, the pay-TV channel, to stream movies from Sony and Disney expires." And while Netflix may have signed some sweetheart deals, it can't be so quickly assumed that they will not find common ground in their renewals. As their growth soars, they remain a powerful force that seems to continue to add a strong and loyal customer base. Should programmers see that their deals are additive to the revenue stream, I doubt they will want to rock the boat too much.

Are Time Warner and the other cable operators worried? Can Netflix continue to sign content agreements that work for their business model? Welcome to a new era of competition in the cable industry.

Another Broadcaster - Operator Negotiation

The end of year brings Santa, cold weather, and yes, another broadcaster and Operator negotiation. In this case, it is Direct TV and Hearst, who owns a number of local affiliate broadcast networks. "The Hearst announcement is the latest salvo in the ongoing battle between programmers and TV providers over carriage fees. Subscribers to DIRECTV, Dish Network, Cablevision and others have lost access to their favorite channels for a period of time this year because their providers could not reach a new agreement before the old one expired.' Markets potentially affected include Boston, Tampa, and 28 others. And for those markets, get used to ads touting alternate platforms to watch their channels. And like every other public negotiation, it will need get resolved until near or perhaps after the deadline. The result, a short term drop in carriage. But don't worry, this negotiation like the others before it will be resolved and order restored. And like every other agreement, the loser will be the customer.