Broadcasters blurring the lines

Comcast is a silent giant. Whether you are a resident of the United States and have utilized their television services or not, the success of Comcast is undeniable. Currently, it holds the title of the world’s second-largest broadcasting and cable television company by revenue. Moreover, Fortune magazine also states that it is America’s largest home Internet service provider. It is surprising that many users of their services are not aware of their existence nor of its influence. Most recently, it has created some noise as it has been reported that Comcast alone has generated more cash than major brands like Disney and Warner Bros.

Originally focused on cable services, this broadcasting company underwent significant changes in the early 2000s. It ventured into two new directions: streaming and acquiring ownership of popular TV networks. In 2011, Comcast expanded its reach by acquiring NBC Universal, granting access to the entertainment industry, film, and even theme parks. Two years later, Comcast launched Xfinity, a mobile virtual network operator. More recently, in 2020, they developed their own streaming service called Peacock. This latest venture, despite their initial success in traditional cable TV, highlights that Comcast has recognized the strength of the streaming business model and has embraced it. Comcast responded to the growing competition in the broadcasting industry by creating its own original streaming service. The service offers viewers access to original movies and TV programming.

However, the business model of streaming networks, which constantly require funding, has its downsides.  Such companies often require significant financial investments to create compelling content and depend on the success of such content to maintain their activity in the long term. Conversely, traditional broadcasting companies such as Comcast, using its NBC studios, typically produce or create a smaller portion of their content in-house compared to streaming platforms that subcontract the production of all their content.

Traditional broadcasters also acquire content from third-party producers or studios to complement their programming schedules but fund their content relying on advertising rather than subscription. But this difference is disspearing. In light of the necessity to generate funds and cash, some streaming networks have made the first move toward advertising.

Netflix recently announced its intention to introduce ads on their platform through a program called “Basic with Ads.” This new subscription plan offers a lower price but includes ads on movies, series, and shows. Still, this seems to be a test version as the streaming platform has not launched it through a major strategy and is not available on all devices. The importance about this shift in Netflix’s business model is that other streamers are likely to follow suit, blurring the lines between streaming platforms and broadcasting services.

Similarly, broadcasters face a daunting task as they strive to keep up with the captivating content provided by streaming platforms and the possibility of watching it on-demand rather than in scheduled time slots, leading to a convergence of the two business models. Furthermore, viewers have developed a preference for control over their content consumption, appreciating features such as pausing, downloading, or rewinding, which are also driving the transformation of the broadcasting industry. As a result, such features as well as advertisements are expected to be shared by both streamers and broadcasters in the future.

Comcast desiste de comprar activos de Fox para centrarse en su entrada en Sky

 The transition is likely to blur the lines between both models, raising questions about how they will differentiate their operations. Will they blend their features to create a common business model? More importantly, what impact will this have on users? On the one hand, the increased competition and innovation resulting from this convergence could benefit users, as companies work to differentiate themselves by creating more unique content and improving their services. On the other hand, there is a risk that the convergence of broadcasters and streamers could lead to a homogenization of content, with fewer unique options for viewers to choose from.

To sum up, the convergence between broadcasters and streamers could have far-reaching implications for the media industry, potentially transforming the way we consume media. Consumers can expect to see changes in pricing, affordability, and the variety of content available to them. As the lines between broadcasters and streamers continue to blur, viewers may begin to notice more similarities between the two, even when comparing contracts and content between platforms. It will be interesting to see how this trend continues to unfold and how it will impact the future of media consumption.

As final food for thought: will “aggregators” appear like cable companies did in the 70s that will provide access to all streamers for a fixed price? At the end of the day, a device can only show the content of one company at a time!

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