Tuesday, November 1, 2011

Content Companies Follow The Money

Whether streaming media deals encourage cord cutting or not, content companies still want to maximize their ROI on produced content. For Disney, that means selling TV content to OTT (over the top) platforms including Amazon and renewing with Netflix. For Amazon, deals like this one and others drive value for their new Kindle Fire. Content is the gas that runs the engine.

For Disney and other content companies, negotiating these deals requires a complex series of windows that give cable operators their first window for TV content and allows enough time before this same content is accessible on OTT devices. How long that window needs to be has most likely been determined through extensive research. Consumers willing to wait till content hits this secondary window will be more willing to cut the cord with their cable operator. Content companies are banking that the choice isn't a zero game of one platform or another and that these content deals only increase the revenue on produced content.

But the demand by Amazon, Netflix, Apple, and other OTT platforms for access to TV content will only put pressure on Disney and other content creators to keep shortening the windows so that fresher content reaches their smaller screens. This trend is already occurring with theatrical films reaching on demand, premium, and basic cable in shorter and shorter windows. TV content deals will most likely follow in a similar pattern and that will continue to cause more cord cutting by consumers from their cable providers.

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