Tuesday, September 27, 2011

Look Who's Playing Both Sides Of Cord Cutting

It seems that the threat of cord cutting has gotten one distribution company to look at new ways to appeal to these cable cutters. Dish Network, a cable satellite company, owns Slingbox, a terrific technology that allows users to push their linear and on demand programming from their cable box to any pc or mobile device. They recently purchased Blockbuster, to offer consumers new choices for DVD rentals, both in store and streaming. And as the third leg of their stool, they seem to be the top bidder in a race to acquire Hulu, an online video streaming company. "Two sources tell us that satellite TV provider Dish was the highest bidder, coming in around $1.9 billion. It beat out both Amazon and Yahoo."

Will Dish pick up Hulu? It seems from looking at previous behavior, that it is consistent with a new strategy to own the distribution platform and content in multiple forms. With the Echostar parent company, one hopes that the right marketing synergies can be created to enhance the messaging and promote these various services. Dish trails DirecTv, Blockbuster trails Netflix, and a consistent second strategy may not be truly effective. It may be time to turn one of their brands into a true leader.

Perhaps it is too early to talk Dish - Hulu just yet. Others, like Google, may raise their bids. Ultimately, my questions with Hulu still remain unanswered. Will the current partners of Hulu still feel obligated to sell content to them after the sale, or will these networks provide cable distributors with more authenticated exclusivity in order to reduce the threat of cord cutting, something that Hulu seems to encourage. As partners, they were inclined to support with content; once unencumbered, they may not feel such an obligation. And that, to me is a real concern of the true long term value of Hulu.