Friday, May 26, 2006

Deals Without Frontiers

The brave new world of Web 2.0 is seeing some strange bedfellows. After Sky and BT are Dell and Google.

However, there is a logic to this.

Most large corporations have realised that they can no longer dominate in isolation as they could in the past. Now they need to collaborate and make the most from their role in the value chain.

For TV on IP it's likely that there will be a daisy chain of commercial transactions between the content and the viewer:

Artists/talent (earn)
Content owner/producer (earn)
Content publisher/rights owner (earn)
'Middle men' (earn)
Advertisers/sponsors (pay)
Channel operators (earn)
Distributors, eg cable or satellite operators or ISPs (earn)
Viewers (pay)

The proposed payment to networks for 'premium' delivery of internet content adds a further layer to this model.

That's a lot of sharing of income to be done from a pie that might not grow that much in the future. The big guys have everything to loose whilst the small guys have everything to win.

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