There is an insatiable demand for content of the video variety. It is so great in fact that sports networks like ESPN are getting an outsized portion of your cable bill. The network in fact gets more than $5 per subscriber per month regardless of whether you ever watch their networks. Cable and IPTV companies for their part are in quite a pickle as more subscribers drop their service altogether for OTT competition. The solution to the problem is painful for many but will eventually be taking sports programming and breaking it out into tiers according to Gary Kim who writes on TMCnet. He explains the first step these companies are taking is adding a $3 fee for local sports programming. At some point ESPN will have to be dealt with it seems.
We have all heard content is king and - remember that until recently Netflix took a massive hit to its earnings due to its lack of leverage in negotiating with content providers. The solution? Develop more of your own content. Exactly what the company is going to do with some of the $400 million in debt it just raised.
TMC’s Erik Linask had this to say about the news: “Companies like Netflix and Hulu are proving that the longstanding dominance of mainstream networks may be in jeopardy. The combination of a modern business model, high-quality programming, and multi-device capabilities, present a compelling case for today's connected viewer, potentially disrupting the competitive landscape to the benefit of the consumer.”
To summarize: content is still king but consumers will soon have the ability to pick from infinite monarchs.
And as more of this content is streamed to various devices, networks have become more clogged than ever. The good news is the emerging H.265 standard which was just approved by ITU is twice as efficient as the current H.264 standard deployed on most tablets and smartphones and data centers pumping the content out.
Amazon today deployed news which is wonderful for the video market with the launch of Amazon Web Services Launches Amazon Elastic Transcoder a solution which leverages the company’s cloud to obsolete the entire market of small transcoding companies playing in the video space. Of course your definition of “wonderful” will vary based on where you sit in the food chain.
Can we make a prediction about the future of video? It seems we are taking baby steps to a la carte programming or at least packages which give consumers some additional choices when it comes to sports and other areas. Investors believe there is money to be made in content production which means the Netflix deal may spawn others. Content will still be king but it gets tougher to stand out when there seems to be endless consumer choice in programming. We have seen Yahoo try the video production game on and off without a great deal of success – perhaps they just did a poor job of it or maybe times have changed. One thing in favor of all these video production entrants is the new connected TVs and cheap consumer electronic devices allowing TV sets to easily display video from the Internet.
In 1979 the Buggles launched the hit song Video Killed the Radio Star which at the time seemed to make sense with the advent of MTV which chose this song as its very first video to play. But over the years it seems radio too has evolved being transmitted from space and traveling over the Internet for example. So radio actually never died. Let me clear up the confusion from my younger readers - MTV was a network which at one time actually played music television. But I digress – I wonder if the title of the song should have been “Video is the Recurring Star.”