No. But Amazon’s new prime streaming program did keep the slim prospect of Over The Top Video impacting traditional TV’s business on life support.
Netflix will be the first to tell you that streaming video is a complement to TV. You might even call it a compliment to traditional TV. There isn’t much of anything on Netflix that hasn’t been on TV first. Brian Roberts was right when he said that what people today call Netflix content, everyone used to just call re-runs. That isn’t a knock on Netflix, we all love it for what it is. The worlds best DVD library at our fingertips. But that doesn’t change the fact that everything was on TV.
There is a reason why its all re-runs. No one in the online world has the balls to take the risks on new content that the TV world does. Multiple pilots costing millions of dollars each ? That’s real money. Multiply that times the broadcast and cable networks that invest in real content and you have a hundred million dollars and more a year being risked on new content. Then of course you have the hundreds of millions of dollars spent to promote all that content every year. It takes a lot of money, luck and success before a tv show can get to the point that people bitch when they can’t watch it for free on the net.
Compare that to the TOTAL amount of money spent on original content destined first or exclusively for the net. What could the total cost of net original programming be every year ? Ten million dollars ? Across thousands of websites ? It is bupkis compared to what happens in the TV world. Which is exactly why the internet is no threat to traditional TV. There is no way to return those hundreds of millions of dollars that is spent just on NEW programming, much of which wont even see the light of day on TV .
HOWEVER, because Amazon entered the market, they just made it more attractive for those “re-runs” that haven’t made it to the net to re-consider placing their content online. Why ? Because up till now, deciding whether to put content online has for the most part been about partnering with Netflix. Netflix does a great job of putting together deals, and as I have written in the past, they don’t buy on consignment, they pay money up front. But if the amount of money from Netflix wasnt enough to entice the content owner to take it online, it stayed on the shelf . Sheltered from Netflix and online streamers.
But now Amazon is offering to pay for content. This is a critical step because now, when a content company off the net is considering whether to go online, they can now look at the total of Netflix and Amazon. Which just may be enough to get them to put their shows online. Amazon money plus Netflix money might just make it impossible for the owner of those TV reruns or movies to say no.
Amazon’s entrance might also be enough to push Hulu and MicroSoft to take the same approach to content.
If there are 4 streaming media companies paying legit money for content, up front. Not on consignment. The dynamics of the industry start to change. It begins to present the net as a place that could maybe create a predictable enough revenue stream that it has to become part of the life cycle of all new TV shows. It becomes a revenue stream that is budgeted into future revenue streams and may actually keep shows in production.
And if its enough to keep shows in production, it may also be enough someday to become an exclusive destination. There is no way Netflix can currently afford to pay to subsidize future seasons of Law and Order in the manner that Dick Wolfe is accustomed to . Amazon, Netflix , Hulu and MicroSoft splitting runs just like USA , TNT, Bravo and A&E might split Law & Order ? That could change things.
Having multiple players paying for content is absolutely what the streaming industry needed to let it hold on to that remote chance that it could actually have a real business built around cord cutters.
Which takes me back to Amazon and E-Books. We had a saying at Broadcast.com that bits are bits. They don’t care if they are music, video, text or even ebooks. No matter what they are, because they are digital , the marginal cost of delivery is tiny. What could it possibly cost to deliver an E Book to a reader of any sort ? A millionth of a penny ? Its nothing. Nada.
So now that we know that the cost to deliver an E-Book is nothing. Let’s ask the zillion dollar question:
How long before Amazon does a Netflix for E-Books as part of Prime ?
Netflix in its brilliance helped content owners monetize their libraries. Their re-runs . All those shows and movies that were gathering dust earning bupkis. Who else has huge libraries of content that is gathering dust and earning bupkis ? Publishers. Book publishers to be specific.
Who is going to be the first to go to those publishers and offer the biggest publishers 10,20, 30, 50mm dollars for multiyear rights to freely distribute their books online to E-Readers ? How many readers of E-Books would gladly continue to be part of Prime from Amazon in exchange for the right to have any book in the Amazon E-library that is more than 1 year old and off the top 20 sales lists (the publishers arent going to give everything, including new titles any more than movie producers will) to read until they are done ? I think millions will.
Why not ? Download and read any book you want from our collection of 10s of thousands, maybe even hundreds of thousands. When you are done with it. “Return it” by simply deleting it from your library and pick another to read. Read as much as you want as fast as you want. Add our kids subscription for another $1 per month. More than one kid, get one for each !
Bits is bits. There is no reason for Amazon to separate this from their streaming offering on Prime.
And then again, there is no reason for Netflix not to offer Netflix for E-Books is there ? They know how to model the content costs as well as anyone. They have the subscribers. They could include it or charge whatever extra to subscribers. Whatever they think works.
Or maybe google does it. Or someone else like the cable/sat/telcos as a value add to their TV subscriptions. Again, why not ? .
Bottom line is that it won’t be long before a Netflix or Prime for E-Books happens and takes hold. Someone is bound to do it. The publishing industry needs the money far worse than the movie industry did. Their monetization of their libraries is horrid. The kneepads are at the front door …..
The more monetization from each subscription (video/books/music ?), the more money available for content. Which increases the opportunity for more money to be paid by net content aggregators to creators of original content.
It’s only when the internet can compete for original content with traditional tv distributors can the net be a true threat to traditional models.
The chances are slim and none, but at least slim hasn’t left town yet.