Here we go again, now it's Time Warner's turn to fit on Apple and Amazon's low cost VOD

written by: Gianluigi Cuccureddu

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Published on Sunday, 03 October 2010 20:09

Last week we reported on the wild idea of a "premium VOD" at a rate of $30 by Hollywood, now Time Warner's CEO Jeff Bewkes who's revolting against the unevitable.

The Hollywood Reporter writes that Bewkes spoke at the Royal Television Conference in London and he said:

"How can you justify renting your first-run TV shows individually for 99 cents an episode and thereby jeopardize the sale of the same shows as a series to branded networks that pay hundreds of millions of dollars and make those shows available to loyal viewers for free?

These new entrants must meet a few criteria: They must provide consumers with a superior TV experience, and they must either support or improve the overall economics that funds and creates the programming in the first place."

Let's examine these two paragraphs:

In the first paragraph Mr. Bewkes mixes up two distinct propositions (at this time). Individual shows versus a serie, plus saying it makes these shows available to loyal viewers for free.

These two target audiences are intrinsically different. There is a group of people who doesn't want to be dependent on time and day and wants to watch content whenever it fits them. Secondly paying cable subscription is a cost as well, not sure why it is free?

The second parapgraph becomes more interesting, where is it written that new entrants must meet criteria and adhere to an archaic and cumbersome industry?

Technology companies for instance (like Google and Yahoo) are infusing new perspectives in this industry, and certainly not downgrading the TV experience.

If there is one portion of industry-players that isn't customer centric and adaptive it are these large TV networks.

"A superior TV experience" is exactly video on demand, it is exactly streaming video and so on, distorting this perspective to their perception of a superior TV experience is a weak response to changes that are coming anyway.

Furthermore, THR wrote:

Bewkes told the audience that, overall, the number of television viewers is growing, paid-television penetration is increasing and advertising and subscription revenues are headed north.

Not sure what industry figures Time Warner receives, but:
* Credit Suisse downgraded Time Warner shares: Attractive alternative to cable consisting of Hulu, iTunes, YouTube, and Netflix
* Cable's first ever subscribers'decline since the '80's
* New Connected TV's to Kill Off Cable, Satellite, and Tivo in the USA?

From whatever evolutionary perspective business is analysed, be it lineair or cyclic, change happens always.

The TV industry was "lucky" to be the last one to be affected by the digitalisation of society, this doesn't mean it's a Last Man Standing type of combat, because the conventional TV industry will go down, sooner or later.

Great opportunities can be reaped for any that understands shifting customer and societal needs.