Cable Television as the Seer Stone of the Media Business

…or, to put it another way, “If you were going to build this system from the ground-up, would it look anything like the way it looks now?”

The Atlantic.com’s Business Channel weighs in with this column about cable companies, broadcast television and revenue.   The conclusion:

But the Web will likely transform this debate for TV as well. Technology appears to be increasingly moving towards a sort of content-agnostic world, where the web will be where we access all forms of media, whether print, radio or TV. So while it’s fine for us to quibble over this latest trend for non-cable TV networks, I suspect it’s just one step in an evolution leading to a new world where all of our media consumption will be very, very different.

“People who really think we have to charge or the industry is sunk would be more persuasive if they said at the same time we have to add more value than we’ve been adding…”

…A quote from Jay Rosen in a useful but sort of predictable NYT writeup about pay walls and legacy media trying to stay afloat.  The best bite was the closer:

“One of the problems is newspapers fired so many journalists and turned them loose to start so many blogs,” Mr. Mutter said. “They should have executed them. They wouldn’t have had competition. But they foolishly let them out alive.”

Apple concept for offering TV subscriptions online; Networks like it

Interesting venture in its very early stages discussed in this NYT writeup.  Who knows what will come of it, but it at least shows legacy networks and media companies are becoming more forward thinking.

“Broadband Internet subscriptions to TV networks could potentially destabilize the bedrock of the television business, which relies on subscribers paying for dozens of bundled channels.”

The NBC Uni-Comcast Deal: Hmmm

There’s a lot of good coverage about yesterday’s news that General Electric has inked a deal with Comcast to sell majority ownership of NBC Universal to Comcast, and it is a very complicated story.   NBC always seemed a strange item for GE’s portfolio, but then, GE is a very large enterprise involved in a lot of things about which the public may be unaware.   It’s probably better that NBC Universal has been one unit among many unrelated businesses with standard performance expectations.   When Comcast gets the keys, NBC Universal will also become a prime strategic asset in a very large enterprise involved in maximizing control over a very large “content pipeline.”

This is an admittedly subjective observation which may not be accurate, but reporting on this deal so far seems to have treated regulatory approval as a formality.   If Wal-Mart decided to buy Proctor & Gamble or another of its largest suppliers, would regulatory approval be a foregone conclusion?  Probably not.

Another question — what is the biggest threat to the long term viability of cable television companies (to say nothing of legacy media companies)?   Our money is on the web upending the entire arrangement.   This is a complex issue which we will explore frequently.   A good place to start when considering all of this is to remember how YouTube begat Hulu and Hulu begat more problems than its creators could anticipate for their walled garden model.    Comcast has a very strong interest in maintaining the status quo in the way television works now and would rather not have a scenario unfold where its ISP business is helping upend its cable television business.   A closed system where one company controls a significant portion of both the content and delivery mechanism and also has massive control over the technology likeliest to threaten that system seems unlikely to promote competition, innovation and quality.

Perhaps the better way to see it is to consider what happens to other industries in their terminal phase — consolidation and decline.   The next time you fly to Europe on Delta, chances are you are flying on a route Delta bought from Pan Am, and if you are flying that route on a Delta 747, chances are you are flying on an airplane Delta acquired from its recent merger with Northwest.   Of course the biggest flaw in this comparison between industries is that you will probably never be able to build your own 747 and fly it to Europe on a route of your own, but you can produce broadcast quality content and get it to an international audience entirely without the assistance of massive multinational media companies.