Monday, August 15, 2011

Producers v Distributors

Production and distribution are the two key platforms that make up the television industry, and increasingly companies will have to chose between one or the other, in my view.

News that Virgin Media has sold its UKTV stake to the US content company Scripps (which itself started as a newspaper company) is that company's firm statement that it is a distribution business. Meanwhile, ITV is investing more and more into content production.

There are exceptions to the rule, of course, but even companies like Comcast and NewsCorp will find it increasingly difficult to have their cake and eat it, and new distributors such as Google, Yahoo!, Hulu and Facebook, as well as hardware manufacturers such as Samsung will put real pressure on traditional TV distribution models, which are now deliverable for next to nothing using an anonymous broadband connection.

Meanwhile content producers are having to contend with exploiting their rights internationally and increasing piracy.

Companies that are both distributors and content producers are ironically diminishing their sales potential and often enabling piracy.