Quote:
Originally Posted by OtinG
I think it is pretty obvious that we seem to be heading toward paying new masters for our video entertainment addictions.
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The cablecos and satcos don't own the content.
They are middlemen; more like bookstores than publishers.
They license the content from tbe studios, based on their subscriber numbers (license rategoes up with lower subscribers) so they are in it deep. Notice how carriage fee fights are more common and nastier? Less subscribers, less money, more fighting.
With the middlemen services declining, the media companies are using the tech to go direct to the source of the money: consumers.
You end up paying the same people for the content, but not the middlemen. Now the video publishers get all the money, directly, not whatever they can squeeze from the cablecos.
Try this: HBO costs viewers $15 a month. Of that, WarnerMedia gets $9 and the cable guys get $6. With HBO Now, WarnerMedia gets all the $15. So they can give consumers more content for the same $15 using the $6 that used to go to the cable companies. Cable HBO runs about 40 original shows but HBOMax will add another 50 originals because $6 a month times $130M is much more than the $2B they'll cost and because they need to be adding new content every month, every week, maybe every day, if possible, to reduce churn and maximize their return.
If you're WarnerMedia (or Disney) there's more money in streaming thantbere ever was in cable and it's all their's. No need to share like good little children.
And they're not alone:
Are you familiar with PHILO? And who owns them?
It offers 53 channels for $20 a month, DVR included.
No added fees.
No hidden taxes.
The exact same channels as a cable bundle (minus sports and news) from the actual owners of the channels. No siphoned money to COMCAST, Dish, or anybody else.
All you pay is what the owners get and tbe owners get all you psy.
That is the new model: you pay for the content (with money or watching ads) on a month by month basis. No contract, no added fees.
And for many people the ondemand services let you watch what you want when you want, not when it's broadcast. There's a reason there's a term for it--cordcutting--and why its accelerating.
Just like ebooks and publishing, video is evolving to better serve consumers by cutting out middlemen costs because all you absolutely need is producers and consumers.