Henry Blodget, a blogger, Yahoo’s TechTicker host, and someone who’s been banned from the securities industry (for life!), writes in AdAge that, sorry, the television industry is currently where the newspaper industry was five years ag0: in denial that its business model is doomed.
The problem, in a nutshell:
As with print-based media, internet-based distribution generates only a tiny fraction of the revenue and profit that today’s incumbent cable, broadcast, and satellite distribution models do. As internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.
Blodget notes that all that factors that once made the TV business model viable — TV’s role as the sole source of video content, limited options for advertisers who want to tell video stories, and tight choke points in each market through which video can flow — have been washed away by the Internet. And TV’s strategy so far of merely porting its existing model to the Web won’t be enough, he says.
So who will TV innovate? Can it? Hulu is impressive, but isn’t merely the same strategy on a Web platform — old rats on a new ship?
Is TV really doomed? Share your thoughts in comments.