A thought-provoking column by Henry Blodget in the Silicon Alley Insider. Here’s his nutshell:
“As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today’s incumbent cable, broadcast, and satellite distribution models do. As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.”
According to Blodget, the TV business models for the past 50 years have been based on:
- Not much else to do at home that’s as simple and fun as TV
- No way to get video content other than via TV
- No options other than TV for advertisers who want to tell video stories
- No options other than cable–and, more recently, satellite–to get TV
- Tight choke-points in each market through which all video content has to flow (cable company, airwaves), which creates enormous value for the owners of those gates.