The recent revenue dip experienced by ESPN and its resonating effect across the business of television have been a sobering experience. Much has been made of the recent highs experienced by the medium in the past years, taking on and surpassing the marks of quality once said to be the purview of cinema. But external factors that may take more than just better programming to remedy are caving in on the television industry.
Television has had a number of things going for it in the past two years. Funded by ad and syndication revenue, the business of making a television show is comparatively more cost-effective and offers better returns. This provided a much-needed buffer for producers to experiment, leading to the creation of high-caliber programs that push boundaries (and bring in ratings).
But this status quo has been challenged by the fledgling Internet-based video-on-demand services, often owned by networks themselves, which offer a wider assortment of programs to any audience with enough bandwidth. This less regulated marketplace, often the only real source of growth for many networks , has allowed production companies to actually fund the production of even riskier web-only series.
This pressure, along with that from popular video-sharing websites like ad-buoyed YouTube, has put pay television on a tenuous position that threatens to knock it off of the stable position it had achieved only a few years back.
This turnaround has an interesting outcome for most investors in the industry, as one of the solutions to the growing challenges of production is for networks to integrate with larger companies. Such an event is likely to boost stocks in the meantime, though it remains to be seen if consolidation can provide the backing pay TV needs to keep up its rebound.
Steven Rindner has, throughout his career in corporate development, accumulated experience and expertise in media, technology, real estate services, and healthcare business fields. Visit this blog for more updates on issues surrounding the media industry.
Television has had a number of things going for it in the past two years. Funded by ad and syndication revenue, the business of making a television show is comparatively more cost-effective and offers better returns. This provided a much-needed buffer for producers to experiment, leading to the creation of high-caliber programs that push boundaries (and bring in ratings).
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| Image source: nypost.com |
But this status quo has been challenged by the fledgling Internet-based video-on-demand services, often owned by networks themselves, which offer a wider assortment of programs to any audience with enough bandwidth. This less regulated marketplace, often the only real source of growth for many networks , has allowed production companies to actually fund the production of even riskier web-only series.
This pressure, along with that from popular video-sharing websites like ad-buoyed YouTube, has put pay television on a tenuous position that threatens to knock it off of the stable position it had achieved only a few years back.
 |
| Image source: latimes.com |
This turnaround has an interesting outcome for most investors in the industry, as one of the solutions to the growing challenges of production is for networks to integrate with larger companies. Such an event is likely to boost stocks in the meantime, though it remains to be seen if consolidation can provide the backing pay TV needs to keep up its rebound.
Steven Rindner has, throughout his career in corporate development, accumulated experience and expertise in media, technology, real estate services, and healthcare business fields. Visit this blog for more updates on issues surrounding the media industry.
