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The Big Three Networks

February 15, 2012 | Author: Ibex Marketing

Everything seems to come in threes. We had the Big Three Automakers in Detroit. There were those little pigs. And then there were the major television networks: Netflix, Amazon, and Google.

Wait a minute; what happened to ABC, CBS, and NBC?

From where I sit, that is ancient history. The traditional networks are dead men walking, and just don’t know it. They are trying to stick with the old models of providing the conduit for video entertainment, and they are failing. Streaming content over the Internet bypasses the traditional network, making it an unnecessary intermediary in the system between content producer and consumer. And it may also squeeze out the traditional role of “advertiser” at the same time. If we have learned one thing from the Internet, it is death to the middleman; Amazon Kindle, Square, and Zappos are just a few examples.

Most of the content shown on online systems such as Netflix and Amazon are reruns. The traditional networks and Hollywood movie studios try to wring out some additional value from these leftovers so they license the content for streaming. And in the process, they have sowed the seeds of their own demise. They have provided the fuel for the fire that is the consumer demand to watch what they want, when they want, where they want. And that is a fire that can’t be put out at this point.

But can the networks be replaced? Netflix has launched its original content with the series “Lilyhammer” and will follow up with “House of Cards” with Kevin Spacey and a revival of the popular “Arrested Development” next year. Google’s YouTube is investing in original content as well, and is providing full-length programming of all sorts.

And here comes GigaOM with a breaking story that Amazon has posted job openings for creative positions with the goal of creating its own content. The service is a bit of a sleeper in the streaming video arena at this point, but its Amazon Prime members get to watch all sorts of content for free (along with many other useful bonuses) in return for a Netflix-like monthly fee. Many consumers may find that they can get a better combined value from Amazon, and if the company starts producing compelling content, it could be a major force.

The new world of video entertainment is going to require a new world of ways to pay for the content’s creation. Who do you think is in a better position to deliver a new model: ABC, CBS, and NBC, or Google, Netflix, and Amazon?

I rest my case.