Thursday, September 20, 2012

Next Generation Of Cable TV

I have made this reference before so it is nice to see Ad Age reconfirm it; You Tube is doing to cable what cable has done to broadcast TV and broadcast to radio before it.  The next technology begins to take over as an emerging business as the leader scoffs that they are legitimate competition.  Some may see it sooner than others until ultimately the realization that they are no longer in full control comes too late.

For cable companies, it is the notion that cord cutting exists and that consumers will cut back or eliminate their cable channels for the web.  Yet, that is the direction and the pace is only increasing.  The emerging leader is Google and You Tube.  "Nearly a year into YouTube's $100 million-plus bet on content, more than 100 "original channels" have launched, and of those, 20 are now earning a million views a week."  What's interesting is that Google is also building out a cable distribution model with a fiber build in Kansas City.  With a blend of linear channels and connectivity to web content, Google may just find the right blended business to take the lead.

Of course, the bottom line is demonstrating that web can generate enough revenue to make it a financially viable long term business.  While TV viewership has always been blessed with statistics to measure perceived viewership based on sample sizes, the web and digital can deliver an actual number of views and usage.  For the long tail of programming, there may not be enough revenue to continue to produce little watched shows.  And that may be the challenge that faces more niche channels.

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