The writers strike is now in its second month and shows no sign of ending. As we discussed when the strike began, this could become a catalyst for a shift from OTA/Cable to online/IPTV and here is why.
There has been a drain in advertising revenues for premium programming, and advertisers have been forced to compensate advertisers with cash (versus time). The trend has been one of declining viewership for OTA with a corresponding increase for cable.
In addition, revenue from OTA has been flat. Even if the strike were settled today, it would by some estimates take two or more months too ramp up production and inventory to offset the drain in revenues.
The Internet Is Taking Over
In the meantime, the Internet is not waiting. Shows like ‘Quarterlife‘ and sites like ‘MyDamnChannel‘, and ‘Funny or Die’ are marching on.
Some WGA writers are reportedly in talks with venture capitalists about funding their own online programming, which would bypass the studios model.
On the other hand, the traditional model is far from dead. Couple that with fragmentation from DVRs, VOD and Place Shifting, i.e. Sling and there exists lot confusion on the part of the public how to make it all work in a lean back environment.
The sky has been falling on TV for a while now, as Business Week would attest, so I would not short the stock for traditional Television just yet…
[Content in whole or part adapted from IPTVe and is licensed under Creative Commons, no addition derivative works may be copied from this article without prior permission from IPTVe and Web TV Wire]
