The Media Old Guard is Catching On
October 16, 2014As it becomes easier and easier to build out the platforms that make Netflix and Hulu possible, the old guard of the media are catching on. Yesterday HBO announced that it would offer HBO GO as a standalone service in 2015 for the US. Today, CBS is announcing its own service.
The moves have caused a tumble in Netflix’s stock price (down ~20% so far today. In response, Netflix says, “The goal is to become HBO faster than HBO can become us.”
It seems that the large media companies are finally getting it. They probably have gotten it for a while, in fact. The OTT model is a tough one with slim margins. Instead of fighting change because it’s scary, they were holding on to those high margins as long as they could. Netflix has made it work on massive volume and clever algorithms. It still has to license content. Hulu was created with more direct access to content. As these content owners create their own services, they don’t need to pay those licensing fees. They have the luxury and advantage of owning the content.
Now it’s time to wait for AMC to get on board.
