I encourage you all to watch this.
Fascinating interview regarding the challenges associated with funding television content in the future. Ari Emmanuel (of WMEndeavor fame), criticizes Google, AT&T, and Verizon for facilitating piracy of Hollywood's content. Hard to argue that those companies' jobs includes policing their "pipes," but he responds that, if these entities can prevent certain types of illegal content (e.g., pornography), they have the capabilities to prevent other types of content (e.g., pirated movies). He comments that distribution networks are commoditized (which is a stark contrast to the 1990's), and the value lies in owning original content. This is something I have said when expressing my excitement regarding Netflix's decision to generate original content.
While an iTunes type business model for television seems plausible, Emmanuel argues that the economics don't work. A single television episode costs $3mm--ignoring all distribution and marketing costs--and a content creator needs lots of $0.99 payments (i.e., the likely price that the consumer is willing to pay) to recoup that cost. Are consumers willing to pay significant dollars per episode to watch quality content, or will they ignore anything that costs above $0.99?
Interesting times we live in...
D10 Video: Ari Emanuel Session Highlights
Source: All Things D
May 31, 2012