NBC Universal and News Corp.’s recent announcement that they will start a joint venture this summer to supposedly rival Google’s YouTube has certainly got everyone buzzing. Many pundits view the entire effort as big media’s attempt to create a YouTube killer, with some sniffing the still-unnamed site should be called MeTooTube. Perhaps. But all that misses the point.

This deal isn’t necessarily about taking on YouTube. It’s about aggregating and protecting copyrighted video content so it can be syndicated across the Web, including "sticking it to the man" sites like YouTube. NBCU and News Corp. refer to their effort as a "video distribution network." That should set off loud alarm bells for cable operators.

MSOs face real risk here. They have relied on their historical status as gatekeepers to level the negotiating playing field with immensely powerful content owners. Cable operators’ access to eyeballs keeps the whole licensing fee/ad revenue dance in check, with both sides bringing similar girth to the table. Remember that consumers watch shows. Then, maybe, they watch networks. But they really have little, if any, allegiance to the content distributor (cable, satellite or telco). They don’t care where content comes from.

Until only the last 18 months or so, premium video content on the Web was sparse. And there was no easy way to get it from the computer to the TV set. That’s changing right before our eyes. Consider this: The XBox360 gaming console and the just-launched Apple TV console are video set-tops. Plain and simple. A new variation on WiFi technology, 802.11n, allows real-time wireless streaming of multimedia content, including HDTV, to non-cable affiliated set-tops — like the XBox360 and Apple TV. Meanwhile, the explosion of DVR/VOD technology has acclimated consumers to the "watch it when I want to" experience, while YouTube and iTunes have helped demystify the idea of downloading or streaming video over the Internet.

Put all this together, and cable operators are in a tenuous position. Think about what might happen if Disney and Viacom were to join the NBCU-News Corp. venture and adopt the same copy protection and syndication technology. The market power would be immense, and content owners would finally come to the bargaining table with even more leverage. None of this is to suggest that big MSOs like Comcast and Time Warner Cable (which have their own big content assets, after all) won’t continue to wield immense gatekeeper power for years. But it seems like content owners’ options to go around traditional gatekeepers just keep getting better every day. Cable operators may want to start striking up online content partnerships now. Or risk paying an even higher price later.

The New Content Paradigm

The NBCU-News Corp. Web content distribution deal suggests convergence is a double-edged sword for cable operators. Consider this:

XBox360 and Apple TV: Say goodbye to cable set-top dominance.

Improved WiFi: 802.11n allows seamless wireless HD streaming from PC to TV.

Consumer Behavior: Viewers are getting more comfortable with Internet video.

Michael Grebb is executive editor of CableFAX Daily. He can be reached at [email protected].

The Daily

Subscribe

The Cable Comeback

Commentary by Steve Effros It’s happening faster than I thought it would: the realization that the “cable” model of delivering video was the right, and probably only workable business model. “Cable”

Read the Full Issue
The Skinny is delivered on Tuesday and focuses on the cable profession. You'll stay in the know on the headlines, topics and special issues you value most. Sign Up

Calendar

Apr 25
2024 Cablefax 100 Awards Magazine Release: April 25, 2024
Jun 13
2024 American Broadband Congress Conference Registration is Open!
Jun 26
2024 FAXIES Awards Nominations Are Open!
Full Calendar

Jobs

Seeking an INDUSTRY JOB?
VIEW JOBS

Hiring? In conjunction with our sister brand, Cynopsis, we are offering hiring managers a deep pool of media-savvy, skilled candidates at a range of experience levels and sectors, The result will be an even more robust industry job board, to help both employers and job seekers.

Contact Rob Hudgins, [email protected], for more information.