Market Shift In case you haven’t been watching, there has been a significant market shift lately in the way video programming is being distributed. That shift has a potentially significant impact on the way we in the cable industry do business, and it will have an even more significant impact if the regulators, Wall Street, and the programming industry itself finally acknowledge it. First, let’s look at what’s going on out there, and where we have come from. For a long time the only effective way to mass merchandise video programming was on broadcast television. It was the only game in town other than movies. Then along came cable. An explosion of product. New channels galore, and an additive impact on how things like movies were distributed. Note that I said “additive,” In other words, the movies started in the theatres, then went to television, and finally cable channels got them. That was true until cable could guarantee security of the signal, and then “pay channels” changed the game. Now the movie went from the theatre to DVD, then the secure distribution of “pay” such as HBO or Showtime, then to syndication with the TV and cable channels. “Windows” within which programming was made available to various outlets became more complicated. Now, with the advent of broadband distribution directly to the home, a very rapid evolution has taken place as the owners of programming try to figure out what to do. It started with abject fear after watching the “Napsterization” of the music industry. But folks are now appreciating that what that really meant was that new marketing approaches had to be taken. Thus, iTunes, Wal-Mart, Universal Music and others are experimenting with ways of selling music (and film, and television programs) via the Internet. Initially this was all done with great concern about “DRM”… digital rights management. Allowing someone to buy a tune, but restricting how and where it could be played. Now the DRM is being slowly rolled back as the owners of the copyrighted products find different ways to secure product, make money and keep customers happy. This market evolution is happening in video at an amazing pace. We’ve gone in a very few years from a mind-set that said programming could not be put on the open Internet because it could be so easily copied and the value destroyed, to the complete opposite, where television series are being openly offered on the Internet as a mechanism to draw more viewers to a series, or allow them to “catch up” to the story. Cable’s “video on demand”—which I have long argued should be “everything on demand”—is being recreated on the web by the owners of the product themselves. So why can’t we get together and provide that consumer friendly service on the best platform for delivery of video… cable? I think it will happen, and I think it will happen relatively soon. Cable is no longer a unique or sole mechanism for program distribution. It never was, although some regulators and legislators still like to characterize it that way. Movies, for instance, are now available in the theatre, on DVD, on “pay” channels, downloadable on Sony’s PlayStation, or DVRs, and on the web as well. The conclusion has to be that there is robust competition in the area of program distribution. The market has changed, and we are all going to benefit. No one method is going to supercede any other. The fears of Wall Street and the rigidity of the regulators will hopefully soon recognize that market shift.

The Daily


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