Tuesday, May 24, 2011

If Content is Sold Everywhere and Anywhere, Does It Become A Commodity?

Content deals are everywhere with sales to cable, Hulu, Netflix, Tivo, Apple,and others. Then it is repackaged and offered to the consumers. To compete in the mobile space, cable has now pushed its on demand extension onto iPads and iPhones. And as a consumer, we can decide where we want to watch our Spongebob episode, whether on TV, on our computer, on our tablet, or on our smartphone. With sales across all platforms and all devices, all this video content is becoming ubiquitous. Soon it could be at a tipping point where the content itself is viewed by the consumer as a commodity. With no exclusivity or other distinguishing differences, the consumer will make decisions on how to watch on a pricing basis. The cheapest viewing platform wins.

Could that hurt the cable model as content owners sell to mobile devices? The cable model is certainly not the cheapest and the threat of cord cutting already exists. Do these content deals simply increase the threat of more lost subscribers? For viewers, the concept of content everywhere and anywhere is appealing. For content platforms, like cable, it means figuring out new strategies to maintain a differentiated value to offset the content commodity issue.

Content creators are pursuing more platform deals to raise revenue. Distributors will find competition become more fierce. Over time, the big fish will swallow the smaller fish and the distribution choices will get smaller. It is the pattern of every industry and already at play strictly within the cable industry. It is the industry and product life cycles at play. With ultimately the many leading to the few.