Monday, May 18, 2015

Programming Contracts Now Shape Competition in Streaming Business

Contracts are a major impediment to distributor experiments with smaller bundles of channels that cost less, but contracts also are being used as a way of keeping Google, for example, from getting rights to National Football League content, argues CNBC financial personality Jim Cramer.

“Programmers are doing the longest contracts possible with the the NFL, to keep Google out,” said Cramer.

Eventually, that tactic will fail, others might argue. “Google will buy some rights to NFL games,” said Charlie Ergen, Dish Network CEO and chairman. “There is no reason for them not to so so.”

Getting that sort of content could provide a major boost for Google’s streaming efforts, and complicate revenue prospects for competing streaming and linear content distributors.

Though one can get a robust argument about where power lies within the content distribution ecosystem, it would be hard not to note the possibly growing power of content owners.

There are only a few things that people ever have wanted to do, using networks: Communicate, consume content, buy and sell or play. Back in the days of single-purpose networks, that meant using one network to watch TV, another to listen to radio, a third to talk.

More recently, people have used satellite TV and cable TV networks to consume TV.

Now, people use multi-purpose networks to do everything, frequently using mobile networks to do so almost anywhere they want.

Of course, there is a problem, for network owners. In the past, the network owners controlled the content or functions. Not anymore.

These days, content and apps can be provided over open networks, without any business relationship between access services provider and app provider.

That means “power” arguably is held by the owners of popular and scarce content, such as NFL games. It is an arguable point, but “content is king” might once again become the best way to describe the video entertainment ecosystem.

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