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Big media searches for ways to use cable TV revenue model online

Big media companies are struggling to keep profits up as more and more consumers move to free methods of getting their news and information online. The internet and its nearly instant access to news at no cost to the reader have significantly affected most print publications.

Reuters reports that the big topic at the Sun Valley conference this week isn't about the economy, but is how big media companies will move to new business models that work better in the Internet age and offer viewers and readers what they want while still driving revenue.

The mood at the conference is described as "somber" and "very bearish" reports Reuters. Many executives are uncertain about how they will turn profits from distributing news and entertainment online and across other mediums like smartphones.

Much discussion at the event was on paid versus free content online. The internet-using public prefers free content that is ad supported for the most part. The broadcasters and print publications want to move to a revenue model that uses both paid content and advertising.

The challenge for the big media companies is in coming up with a business model that will allow it to keep the ad and subscription revenue model that cable TV uses and apply it to online endeavors where consumers are used to getting content for free.

Discovery Communications' David Zaslav told Reuters, "We're not using long-form content on the Web because it's not clear to us that's the way people want to consume content. But also the business model isn't there yet, so we're taking it slow."

Google CEO Eric Schmidt was at the conference and told reporters that he has been in early talks with Time Warner about getting paid cable shows on YouTube. Popular video provider Hulu.com has also been in talking about instituting a new paid content model and Hulu is also looking to extend its video service to smartphones with an iPhone app.



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RE: Welcome to the 21st century
By djc208 on 7/14/2009 12:25:39 PM , Rating: 2
I could see it. The cable companies balked at ala-cart cable channels but the media companies could make it happen without congress.

If CBS started offering all their content available commercial free online for $5/month, and the other companies followed why would I need cable? I don't watch all my 102 channels, I've even de-programmed some of them. So instead of a big cable package to get the 5 or 10 stations I want I just subscribe to their services. Or I subscribe to the few I watch most and use the free ad supported versions for others.


RE: Welcome to the 21st century
By FITCamaro on 7/14/2009 2:01:52 PM , Rating: 2
Ah but you forget. Bandwidth caps. Instead you'll spend the equivalent of your cable bill in overage charges. Assuming you use cable internet.


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