Online video distribution is not an outside bet

We like Dan Rayburn here at Nativ, he’s got a lot of incisive things to say about online video. His recent post on the fallacy of believing online video distribution will replace cable TV is one example. He argues that:

We know the pay TV business is being disrupted thanks to the Internet. But instead of many thinking of online video as a replacement for TV, it should really be thought of as a complement to it. While we each have our own opinions on pay TV services, Dan says, “Frankly I’m happy paying $95 a month for a 25Mbps FiOS connection, tons of channels I actually watch, video quality I can’t get online and unlimited phone calls.”

So far so good. But then he goes too far:

To imply that any large volume of people are cutting their cable TV service in favor of online video, or that there is any data to show this is a major trend moving forward, simply would not be accurate.

Unfortunately I have to disagree with him, at least in part. He may be right that people aren’t cutting their cable subscriptions, but ComCast’s recent figures show that online digital video consumption is increasing very sharply. There are only so many hours in a day and only so many that people want to devote to video. It seems logical that as online video consumption skyrockets, all traditional broadcasting, cable included, will suffer.  Yes, total consumption will grow, but there must also be some erosion of eye-share.

Whether or not online digital video distribution will oust cable TV remains to be seen, but certainly the trend is that at least in the short term, online video consumption is growing. A lot. And it would be unwise to assume that cable will necessarily trump online digital video.

Perhaps cable TV will ultimately win the fight. Perhaps it won’t. Arguably the question of who wins is irrelevant if you’re a content owner. The point is that you need to be prepared to monetize your video on all platforms.

Content owners should be hedging their bets, and making sure they can cope with disparate platforms. That’s the really smart move, not making like Nostradamus and trying to predict the future. In an industry moving as fast as this one, all prophesies are off.

This entry was posted on Wednesday, June 23rd, 2010 at 10:52 am and is filed under Distribution. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.