Tuesday, January 17, 2012

Online Nets Are A Disruptive Force To Cable

Remember when broadcast networks fueled our viewing interests and the Nielsen ratings. The rise of cable networks were seen initially as too niche to impact viewership; I mean, who would want to watch news beyond broadcast at the traditional dinner time and again 11 pm ET/PT hour. But cable networks kept scratching away and the rise of more and more of them began to peel off viewers from broadcast. Today it is cable who is known for its innovative, award winning programming while the broadcast share of total TV viewing continues to decline.

But time doesn't stand still and history repeats itself. That change in the TV landscape comes from the rise of web-based programming. Where cable took broadcast viewers, web programming will continue to attract the broadcast and cable viewer. And the web model has learned from its cable history; offering re-airings of older programming and sprinkling in some original shows.

Today that disruptive influence comes from Google and YouTube who are premiering two "web networks" and original shows with the "launch of new Hollywood-centric entertainment channels from Young Hollywood and a Penske Media-Ion TV partnership." These networks look to be distribute a linear schedule as well as offer programs on demand. "The launch of the two channels comes 24 hours after rival Hulu announced its latest original series, Battleground. The politically themed dramedy (executive produced by the guy directing Sony’s next big Spider-Man tentpole, Marc Webb) is Hulu’s first original scripted offering."

Like the early days of cable, some advertisers may shun this niche until it is more proven. Others will deem it experimental and siphon off a small piece of its budget to test its appeal. And like the early days of cable, the risk - reward model will likely pay dividends for the early adopters.

This technological shift toward broadband delivery does not necessarily have to hurt the cable and broadcast model. How readily they embrace it and pursue distribution that keeps them accessible across platforms is key. Even with the arrival of cable, most broadcast nets have survived (sorry CW and WB). The arrival of these web channels and programs will not result in a zero sum game. There will ultimately continue to remain room for the strongest in each distribution platform to survive.

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