Tuesday, December 25, 2007

Another Business model is about to tank?

If you've read my blog regularly, or handreds of others, you know that the big music media companies are desperately trying to prop up their obsolete business model. These companies no longer provide much added value, and they are doomed to collapse, despite their success in getting laws passed to make it difficult or illegal to compete with them.

A recent podcast by Sam and Jim, of Sam and Jim go to Hollywood, suggests that the TV business may be the next to go. I find their argument refreshing, especially because I had little inkling of it before. They note that TV is doing everything it can to get onto the Internet. Once it's truly easy to watch TV on the web on a large screen (2008 or 2009 will be the year), the TV business will lose their current business model, and there will be a market for writers and actors on the internet. Here's one of their examples:

It costs two to four million dollars to make a hour of TV. A significant part of this cost involves paying for access, because there are so few successful TV channels. But when there are a million TV channels on the web, access costs will fall.

I would say that more generally, the added value that the networks provide will gradually disappear. Computer software will lower costs of production and delivery, just as they have for music. People with talent will be able to produce, distribute and sell. We can expect the TV channels to do everything they can to jury-rig the laws in their favor, just as the song-biz has done (with DMCA legislation, for instance). But in the long run, you cannot legislate a business model, not in an international economy. The days of giant, powerful, conglomerate TV channel owners are nearly over.
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