Power Lawyer Ken Ziffren on Who Wins the Race to Go Over-the-Top ►

The Hollywood Reporter has a guest column posted by a “power lawyer” – They do not specify if he is “mighty” or “morphing” so I’m going to guess both.

He provides a succinct overview of all the OTT efforts being made by traditional studios, traditional networks, and stars from those traditional studios and networks. It doesn’t delve deeply inside how anything works, or acknowledge efforts made by non-traditional entrants, or services.

By “over the top” services, I mean Netflix and Amazon Prime, of course. But I also mean any outlet offering professionally produced content made available on-demand over the Internet (either in lieu of or in addition to linear viewing). Here, content is streamed to connected televisions and other devices. The business model could be subscription, VOD and/or ad-supported. In today’s pay TV industry, cable and over-the-air networks are paid affiliate fees ranging from a few cents to about $6 for ESPN, based on the number of subscribers reached, as opposed to the number of viewers actually watching the programs. The current OTT ecosystem is not following the linear TV model, so subscribers are being asked to pay for only the specific channels to which they subscribe; the appeal is made to millennials, mostly, who are willing to limit channels to escape the $80-plus-a-month tab when they subscribe to cable, a telco or satellite.

Ignore the conclusion where he tries to grade the OTT efforts for their potential to return on their investment. He just kind of hand-waves.

The worst is this line:

With incumbent companies, the criteria is more complicated. For them, I see the goals as improving the stock multiple, increasing the brand recognition and avoiding cannibalization

You can’t avoid cannibalization. Not unless you can make older customers immortal. Which is a power that I’m not sure Ken has.

2015-03-12 13:00:00

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