Traditional TV Channel Model Under Scrutiny

old-television-setsWith all the new ways consumers can (and do) consume video content, the dual revenue model (carriage fees and advertising) of linear TV channel business is under pressure.

The appeal of OTT streaming and web video is driving “old” TV players like HBO and CBS in new directions. Both recently announced they would take their content to the customer directly. The endgame of this movement is the total unbundling of cable TV packages in favor of à la carte programming.

Jon Sichel, managing director at Scripps Network, insists that the traditional model is safe for the foreseeable future: “he argued that an à la carte model doesn’t work economically and isn’t necessarily what consumers want. “Being able to rely on providers who can help me and my family choose what we want to see is so important. That will change but it won’t be just about everyone providing their own content and going direct to the consumer,” he said. “When I go to YouTube and try to find content I’m interested in I’m lost. The business of producing content is not that simple. If you move to an OTT world you have to create individual shows that you know will be a hit. If I could do that every time, I wouldn’t be here – I’d be retired. You really need an ecosystem that allows you to try out new things that are often a hit or a miss.” He welcomes TV everywhere and on-demand delivery of content, but only as an add-on to traditional TV.

Jean-Thierry Augustin, CEO of Eurosport, is embracing the digital world more strongly: “He says Eurosport is seeking to garner rights and to create branding that will appeal to the “YouTube generation.”” He sees digital delivery as a business in its own right, rather than just complementing the linear TV channels.

Swiss music channel Joiz is going even further, by putting their focus on second screen and user interaction, even offering interactive advertising.

Read more about the old and new worlds of video content here.


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