Over the top TV – plus ça change, plus c’est la même chose

By January 17, 2012 4 Comments

Netflix, Hulu, Youtube and Amazon, companies at the forefront of web delivered TV are increasingly resembling the traditional TV companies they seek to displace. They are now all complementing aggressive licensing strategies with large budgets for developing original content in recognition of the age old truism of TV – content drives subscribers. This leaves us in a situation where, like the old guard of TV, the new guard controls both content and distribution, but unlike the old guard they don’t bundle access (i.e. cable or satellite) in with the package. The access element is now commoditised and adds nothing to the package.

This emerging world is a far cry from the early hopes of web enthusiasts that content owners would have direct access to consumers and wouldn’t have to go through gatekeepers. That vision has been realised in the sense that content owners can host shows on their own websites, market direct to consumers and make money either via charging directly or advertising, but it is increasingly clear that the best way to access a large audience online is to do a deal with one of the companies listed above. Netflix and Hulu et al are the new gatekeepers.

From a consumer perspective I don’t think this is good. I fear that we will be faced with choosing between rival subscription packages which offer only a fraction of the shows we would like to see (something we haven’t had to worry about too much in the UK). Worse still, I fear that as the battle between the pure online players and traditional companies like Sky and Comcast intensifies the market will get more fragmented and the total amount of content in any given subscription will shrink. In the short term I suspect this will also be bad news owners of anything other than A-grade content, including up and coming hopefuls, who will find it harder to get in front of large audiences. Owners of A-grade content and top stars should do well as the TV rivals battle each other for material that will help drive subscriber growth.

Live sport programming is the next frontier. We heard in December that the 2012 Super Bowl will be streamed live online by NBC, but it in the UK at least there is no legal live online access to big games. Once there is I will turn off my cable subscription, but probably not before.

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