CBS & HBO’s Standalone Streaming Websites – New TV Paradigm or…?

Yesterday we posted an assessment of CBS and HBO’s announced forays into interweb subscription streaming and thought that was the last word. But lo and behold – just when we think we have Deadline.Com pegged as a voice of conservative H’wood, along comes a big breaking curveball. Namely, this wonderfully cynical analysis of the recent announcements that CBS and HBO are going to offer paid streaming on the web:


by David Lieberman

Do you think that Big Media companies are about to blow up one of the greatest rackets in American business – one that accounts for the vast majority of their profits? The New York Times apparently does based on its geewhiz front page storythis morning (in sync with a lot of trendy commentary this week) pegged to new initiatives by CBS and Time Warner’s HBO to offer some of their programming online to people who pay them monthly subscription fees.

The announcements indicate that a “new era of à la carte television arrived in earnest this week – seemingly all at once and more quickly than many industry executives and television fans had expected,” the Times says. “And with it, the virtual monopoly that cable, satellite and telecommunications companies have had over TV programming is dissipating.” It adds that the “moves signal a watershed moment for web-delivered television….Rapidly fading are the days in which people pay an average of $90 a month for a bundle of networks from a traditional provider.”

The slippery wording keeps it from being technically inaccurate. But the main thrust of these observations represent a fantasy. HBO and CBS want to strengthen the status quo, not help to tear it down.

The companies — and other powers including Comcast, Disney, Fox, Discovery, and Viacom — thrive because they act as an oligopoly. They help themselves, and each other, by insisting that distributors only offer channels in bundles. Consumers justifiably hate having to pay for channels they don’t watch. They grudgingly pay the ever-rising monthly bills because that’s the most efficient way to keep up with news, sports, and the latest entertainment.

Execs don’t want to mess with that: If consumers had the freedom to choose, about half of the revenue in the TV ecosystem, about $70B, “would evaporate and fewer than 20 channels would survive,”  Needham Co analyst Laura Martin concluded in a widely read analysis last year.

Read it all