Times Have Changed

Two major headlines caught my attention last week. The first was Oprah's decision to shut down her show on broadcast television by 2011 and the second, GM's talks with Comcast over the future of NBC Universal.

While the first is undoubtedly huge considering how powerful the Oprah's TV emporium is, it doesn't really surprises me as it is probably just part of her master plan for the upcoming Oprah Winfrey Network. But the latter, if true, is a different story.

Needless to say, a merge like that will result in a massive content industry shakeup. Comcast will control a hefty amount of media assets – over two dozen networks, mostly cable - across several large markets turning it into a giant money machine. But, beyond the obvious mighty outcome, what’s really interesting to me is what’s behind of it and what it could represent to the cable versus broadcast story.

It is clear that there is something broken in the world of broadcast television. NBC is just the hottest example. People are not as devoted to the big four as they used to be and the reason is its lack of high quality content that satisfies their needs. For a long time NBC has failed in delivering high quality content, consistently - which is a common problem in broadcast TV – and, what’s even worse, they sort of tried to trick people by offering more of the same but in a different packaging – the Leno experiment.

Broadcast networks must get this: people want new and better offerings and they are willing to pay extra for it. That’s the reason why cable has already demonstrated to be a much lucrative business with higher profits margins than broadcast - obtained both from advertising revenue and subscription fees from cable operators. They should also understand that these are no longer the times where the entire family sat around the TV box to watch their favorite show. Things are not what they used to be. There has been changes in both behavior and preferences.

I guess what I am saying is that as the masses continue to expand their preferences for quality content, in order to survive, broadcast networks should seriously rethink their traditional primetime model. There is much more out there and, as long as it is good, people are open to pay for it.