It's an almost certain bet that retail prices for video entertainment services will increase in price, virtually every year, driven, video entertainment service executives say, by ever-higher costs of programming. That doesn't mean immediate changes are coming in the video business. But observers would say a day of reckoning awaits.
At 10 percent per year rates of growth, the $40 wholesale cost of goods sold today would more than double, to about $80, in another seven years," says Craig Moffett, Bernstein Research analyst.
With an average retail subscription price of about $80, you might assume the retail price is double the wholesale price, implying a $160 a month subscription price in seven years, should nothing else change. Some think that is unlikely.
Tuesday, October 2, 2012
When Will Programming Costs Subside?
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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