the first is local TV. We have local outposts of network television in every reasonable town in America because of the physical limitations of radio waves. Broadcast signals can only go so far. But with the internet (or sat TV), those signals can be nationwide or worldwide. Do we need local TV anymore – at least the one with huge transmitters, towers and monopolies on channel space? I would say no, and I would liken them to newspapers, where there are (or were) real limitations to what you could set, print, press and truck about a physical era.

The second is simply about scarcity. Cable and satellite, whether digital or analog, are all about scarcity. 20, 100, 1000, it’s all about a finite number of channels – and that limits choices – just as there are a finite number of musicians that a label can promote, and a finite number of households/outlets that a newspaper can reach.

The internet does away with scarcity, which means that a zillion channels can be available at all times. That enables the development of channels (or sets of content) that can appeal to narrower niches than a cable net. Those cable/sat nets, by nature and finances, must appeal to a lower common denominator (LCD) than a web-only channel.

I saw it at ZDTV/TechTV. Once we were Neilsen rated, we had to do more LCD programming to juice our ratings. Our core hated it, and in the end we became broad, not deep into a core set of interests.

The web enables us, with Revision3, to profitably appeal to a more narrow niche than we could with cable.

Does that mean we’re going to kill cable and sat? I think not. But they will have to co-exist with a wide range of video programming that appeals to a smaller and smaller audience range, but do it profitably. And that will steal time from overall viewing of broad channels.

jim louderback (CEO revision3)

It is, however, very disruptive for traditional media companies. Music labels suddenly found they were spending as much as ever to find, groom, produce, and market songs and bands but were only left with 1/10 as much revenue as they used to get.

The Pay-TV model works in much the same way in the sense that in the current world I am forced to pay for large bundles of channels even if I only watch a few of them.

The difference – and this is what I think MC underestimates – is that when i pay for cable or satellite I am also paying for a channel guide and, increasingly, a DVR as well which add a lot of value. Sure, I could theoretically demand a la carte service where I pay only for the channels I want, but then perhaps I’d have to pay even more for the guide and the DVR. The music labels had no such options available to them so in this sense the Pay-TV model is more robust in the face of the forces that would make it a la carte online (at least until there’s an online service that’s as easy to use as the TV in my living room already is).

It’s significantly harder to destroy physical media than it is to destroy data. I’m sure most people have some sort of horror story where they’ve watched music and photos and documents be lost due to some kind of hardware failure, and it’s devastating. Now imagine if your whole movie and music collection was trapped on a dead hard drive? It’s a nightmare scenario for a lot of people.

“They write a check for the products they sell net of returns for the smaller movies , and with out returns for the biggest movies. That is real money in the bank within 90 days of shipment. On the digital download side, its purely consignment. No cash, no certainty until after the fact.”

I think I follow, but please explain in more detail. I don’t see how consignment is not less risky with the same gains…