TV Networks’ Position Is Worse Than They Let On

From CBS chief says network could go all-Internet if Aereo wins:

“If there are systems out there that try to hurt us, then we could go to OTT,” [CBS Chief Executive Leslie Moonves] said, using the abbreviation for over-the-top Internet television delivery. “If Aereo should work, if they should win, which we don’t think is going to happen, we could go OTT with CBS.”

There are so many reasons why doing this would be the networks cutting off their nose to spite their face:  such as the amount of money their O-and-Os still make over broadcast or the fact that many small market independently-owned stations only make money because they are the sole provider (via broadcast) of network content.

Don’t get me wrong, all the networks are going to have to make this move at some point. But right now their economics are set up for the broadcast model. Aereo is just hastening the inevitable reckoning. The question is: Will the networks be forced into a crash-change, or will they have enough time and foresight to create a gradual change?

The fact that multi-billion dollar deals like this are still happening makes me think the former is more likely.

March 11, 2014