The Entitlement Proposition: The Challenge and Opportunity for Distributors

With the advent of services like TV Everywhere, cable-hosted Wi-Fi networks and deals with other service providers such as Clearwire are beginning to exacerbate the problem of tracking what content each subscriber is privileged to get, and under what circumstances. This month, Keith Kocho, founder and president of ExtendMedia, talks about the difficulties of getting all of that right the first time.

Kocho writes: “I’m struggling with one of the hottest topics in the rapidly changing world of consumer video entertainment: entitlement. Matching consumers to the content, services and rights (entitlements) they desire is both a technical and business model challenge. It seems everyone has an opinion on this subject, and the range of opinions is very broad indeed. Who really benefits from this notion, and who pays for it?

“If distributors are going to be asked to pay millions to the rights holders for carriage, then it’s just not fair that those same rights holders are offering their content for free to consumers online – and making money via advertising along the way. Hulu is a prime example of this complex dilemma.

“Jeff Zucker’s famous ‘trading analog dollars for digital pennies’ captures this situation well. If the rights holders are going directly to Hulu, then distributors are in a reasonable position to say, ‘Hey, we want that deal too,’ – no carriage fees. That won’t work for the rights holders, as there simply isn’t enough ad revenue for them to forgo the lucrative carriage fees generated by the cable subscription business. Not yet, anyway.” ...More


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And CED’s editors are now diving deeper, providing additional perspective on some of the top stories in the news. Visit our site for editor Brian Santo’s blog, “And Another Thing,” and get additional insights from senior editor Mike Robuck’s blog, “Write Stuff.”

In “Comcast shoots, scores with iPhone app,” Robuck writes: “It was the third-most popular free app in the App Store’s entertainment category, and it ranked 21st in the overall free category after slipping from 18th. … Who knew Comcast could be so wicked cool?"

In “Validation for Canoe Ventures,” Santo writes: “A new study on the weakness of brand loyalty among American consumers is worth the cable industry’s attention. Its conclusion is that targeted advertising can pay off in spades for national brands.”