Charlie Ergen, Chairman of Dish Network Corp., offers up what appears to be one of the most realistic assessments of the outdated content delivery landscape.
This quote from the interview sums up his point of view nicely: “Ultimately, broadcasters and advertisers have to change the way they do business or they run the risk of linear TV becoming obsolete.”
The traditional networks are in a state of great uproar over Dish’s new DVRs which come equipped with an automatic ad-skipping feature. The traditional networks’ public position is summed up in a statement from a Fox spokesperson: “While Mr. Ergen wraps himself in the flag of ‘innovation,’ the idea of using technology to exploit others’ intellectual property for personal gain is not a new or innovative idea.”
The traditional networks, like many other content companies are fighting a rear-guard action to protect their business models. Unfortunately (or, fortunately, depending on your point of view), there is no putting the proverbial Genie back into the bottle. Digital technology has fundamentally shifted the paradigms of content creation, content distribution, and content monetization. The traditional business models for creative content creation and distribution simply will not be able to work sustainably. Companies that get this and look for business models that work in the Digital Age will survive (and if they find the right model, flourish). Companies that do not embrace this inevitability, will be relegated to the fate of the dinosaurs.
Despite the heated rhetoric, the issue here is not “theft of content” or “theft of intellectual property” (although “piracy” is one of the issues which continues to plague the content industry). The issue is how to deliver content in manners (and to places) that consumers want in a way that is appropriately mobilizable. While I by no means claim to have “the answer”, it is clear that current system is broken. I have not doubt, however, that innovative companies will be able to tackle the issues of being able to create and distribute content in ways which both meet the needs to the consumers on one side and the creators and distributors on the other.
Both anecdotally and empirically, most people do not truly believe that content should be “free” and that content creators and distributors should not receive value for their efforts. While there will always be thieves, cheats, and scofflaws, most people are willing to pay a fair price for things that they want. Thus, much of the struggle in finding a content business model that actually works revolves around (1) content that people want, (2) delivered in the manner (and to places) that people want to consume it, (3) at a fair price. There is much to be done in order to quantify the parts that go into these elements. But for companies that are able to innovate and successfully deliver upon all three, the rewards will be rich indeed.