Who’s Playing High Stakes Video Poker?
A few billion here, $500 million there and soon, we’re talking about some serious money, right? These are the kind of dollars being bandied about in the pursuit of reshaping the video delivery business in a game of high stakes video poker. Make no mistake – the outcomes will directly impact every American.
Let me write from my high perch as one of the anointed in the Cable TV industry (well I have been inducted into the Cable TV Pioneers Hall of Fame!) So I think I’m about as good a prognosticator as anyone with the word “analyst” in their title.
The high stakes poker game is going on where “traditional pay TV guys” (like Comcast and Time Warner Cable) will soon become “next gen OTT guys” (like Netflix, Hulu, Amazon Prime and Apple) and leverage their captive audience of paying subscribers while expanding their footprint to non-subscribers virtually anywhere. In this case – let’s call OTT “virtual” cable operators.
So here are the cards that have recently been played:
- A merger between the two largest cable TV providers in the country Comcast and Time Warner Cable. Anyone think this will be stopped? Doubtful.
- AT&T is not sitting idly on the side lines – it’s announced a new $500 million kitty to develop OTT content.
- Anyone want to place a bet that a DirecTV and DISH merger will follow?
- Will DISH be the first to launch a virtual cable system? Remember it negotiated exclusive rights from ABC/Disney to distribute programming over high-speed Internet to consumers.
- What constitutes a cable system? Are you as confused as Supreme Court Justice Elena Kagan, who recently asked why Aereo is not essentially a cable system?
With stakes like these, companies as diverse as Charter, Verizon and others will be changing their business models quickly.
What does this mean for consumers? Netflix’s announcement that it will raise monthly subscriptions by $2 a month – or nearly 25%, is one dominant player’s move; others will follow.
Supermarkets are as good a guide to our future as any other tea leaves. We are spending more for smaller packages. Remember when it used to be about $8 for a bag of groceries? Today it costs about $15 a bag in Los Angeles. Video providers will do the same – higher fees to consumers for smaller packages. Place your bets now.
Care to join the conversation? I’d love to hear your thoughts, so feel free to share them with me at email@example.com
-Bob Gold, President & Founder