I think that this new price model that being promoted by Apple and Amazon might trigger some of these trends in the future –
- Initial Trigger Point – Some/Limited (which is what happened) Free to air broadcasters will immediately jump in to offer content for $.99 – to test waters and see if they can make more money via the “over the top” distribution than what they are making currently – which is not a whole lot other than some ad revenue.
- Step #2 – early adopters/ passionate fans shifting towards this paid access model – purely for convenience. Even though the same content is available through network sites, the opportunity cost of accessing favorite shows via such dedicated boxes on their big screen TVs is much lesser than having to jig their laptops to their TVs or worse watching on smaller screen devices. While we all acknowledge that “Content is King”, Convenience has the potential to dethrone the King in this case.
- Step #3 – Once the # of users pivots – Broadcasters reduce the amount of content they make available via their web properties. They might only push content that is not as popular and divert popular content towards the rental/paid models.
- Step #4 – With depleting supply of popular content on the web sites, casual fans and certainly less tech savvy viewers lean towards these boxes/paid services. That increases the wielding power of Apple, Amazon, Netflix and the like. There will be some market share acquisition shenanigans around this time to lure, grow and retain their user base by reducing the price points or bulk price points, tiered services, yada, yada.
- Step #5 – This is when rest of the content industry follows suite – as this is turning out to be a viable distribution/business model for their content.
- Step #6 – This is when the disruption in the SP driven premium content packages could kick in – mainly with the tug and pull amongst 1. Premium content providers, 2. Cable MSOs, 3. the new generation providers such as Apple, Amazon, Netflix, the like and 4. New generation content users. Cable MSOs might address this new market via their “TV Everywhere” offering but they would not be only game in town, by this point
All thoughts are my own and not my employer …..