CBS, long the nation’s most popular TV network, has moved strongly into online distribution in recent months, with the establishment of its CBS All Access subscription streaming service and its streaming news network, CBSN. The company also has plans to launch a Showtime online channel next year, as HBO is doing. Now CBS president Les Moonves is talking about possibly adding NFL games to its All Access channel.
That would be a serious game-changer, if you’ll pardon the pun, in the online media world, because NFL Football is by far the most popular programming on network TV. Not only do NFL games draw big audiences during Sunday afternoons when no one would ordinarily be watching television, they also dominate prime-time programming. Last week, for example, five of the top six rated prime-time shows were NFL-related—games, or, amazingly, pre-or postgame shows—including the top four, and a college football game ranked eleventh and a Thursday Night Football game on the NFL Network snagged the number 15 spot. Football placed seven of the top fifteen shows.
Obviously, with that kind of audience pull, football could help draw many more paying customers to CBS’s streaming service than its present coterie of people in search of unlimited reruns of The Big Bang Theory. And if that should happen, it surely won’t be long before cable and satellite providers start to hemorrhage subscribers as their $100+ a month bills look less and less worth the money.
The greatest irony of all is that those high prices are largely caused by ESPN and other popular cable networks charging the cable and satellite providers usurious per-subscriber prices for their channel bundles.
What this all means is that the current system is not only unsustainable but disastrously so. In the cable and satellite world of television, program providers get paid both by advertisers and by the people who provide the infrastructure. In the online world, they get free infrastructure (though that is changing, an economically positive trend that the Obama administration is foolishly trying to destroy in the name of net neutrality), but don’t get payment from the internet service providers who distribute their wares.
You can see the imbalance: cable and satellite providers are at a huge disadvantage. However, once they have been destroyed and pretty much everything is over-the-air or on the internet, the prices the program providers can demand should drop precipitously as the number of potential distributors of their services falls because of the decline of the cable and satellite markets.
At that point, however, program providers would want to be able to continue hiking prices ever-higher by preventing ISPs from “retransmiting” their content without permission, meaning huge payments from the ISPs. And that will start the whole round of ever-increasing consumer costs, this time for “enhanced” internet service instead of their old cables or dishes.
This round of extortion cannot happen under current law, so be on the lookout for the big media program provider corporations to start lobbying Congress to allow them to charge internet service providers for “broadcasting” their content in the years to come.
Ironically, the FCC’s current net neutrality push involves redefining the internet as a utility, a “dumb” network, instead of a communications provider. That would seem to obviate the possibility of program providers charging “rebroadcasting” fees to ISPs, but don’t expect that to last. They’ll get their way in the end.
The lesson is this: no matter what the distribution vehicle is, content is king, and it will have its tribute, the consumer be damned.