An obscure dispute between DirecTV and The Weather Channel (TWC) highlights the shifting landscape of the economics behind what you see on TV. DirecTV dropped TWC from its line-up because they wanted to reduce the current 13 cents per subscriber per month that they pay to carry the service; TWC wanted an increase to 14 cents. Unable to agree on terms, the service was dropped. It’s a big deal for TWC because it’s possible other cable companies will see an opportunity to negotiate better terms. In fact, it’s not clear to me that DirecTV should be paying much, if anything to TWC because they already carry advertising. Charging viewers to watch TWC and also inflicting advertising on them seems a bit much to me. But then, I rarely get my weather information from TV, but instead like millions of others favor the far more precise access offered by the internet.
And that is really the point. In so many ways, TV channels are an increasingly inflexible way to deliver content. You get what they want to deliver when they want to, across several hundred channels, compared with the internet which in effect offers limitless choices of content. The important exception is anything live, most notably sports, for which providers will be able to charge a premium price for the foreseeable future.
News delivery on TV has long struggled to compete with the far more customized content available online. As for shows and movies, Netflix must be one of the best deals around. The quality of online video on a laptop even over a wireless network is quite acceptable in most cases. On a recent trip south for warmer weather, my wife and I didn’t even turn on the TV in our room, instead using Netflix to choose our evening’s viewing.
Like so many developments in technology, it is empowering for the consumer. As I compare my cable bill with my Netflix subscription and ponder how little I watch on live TV beyond the English Premier League, it seems clear that many traditional business models in the fields of entertainment and broadcasting are at risk.
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