Haig Shahinian writes:
Q: Why does every service provider want to own content these days?
A: I know why–unlike every other point in the digital multimedia value chain, content margins are actually increasing, while distribution and retailing are winding down towards nothingness.
Paul Kagan’s column gets it right when he says that buying content holders outright isn’t the way to go, leasing the content is. Didn’t anyone learn anything from the AOL-TimeWarner merger?
Here’s the thing: when VOD finally comes around to being a feasable service, it’s seriously going to change viewing dynamics in a big way. But one very important aspect for the VOD experience is a comprehensive library. Providers are going to need to allow access to a huge library of movies and shows from all over the content industry, not only from MGM or TimeWarner. If Comcast can secure a stake in every content company, then its strategy will work and more power to them, but realisticly that’s not going to happen and so if you don’t own a little of all, don’t own a little of any. Instead, lease it out like usual and stick to doing what you do best, distributing as much as possible, as convenient as possible, and keep your subscribers happy.