The Transport Mechanism Is A Go. Now Load Your Premium Content And Charge For it.

John Malone, chairman of Liberty Media Corp.–which owns cable channels, satellite-television operator DirecTV and baseball’s Atlanta Braves–sat down with Walt Mossberg of The Wall Street Journal recently to discuss some pressing topics in the communications industry.
Here’s a slice of their discussion:

MR. MOSSBERG:Tell me why nobody offers me, through a traditional cable or satellite service, a real Internet-type experience. It’s just there and I can go to it. It’s like Hulu. If I want to watch a four-year-old episode of “Grey’s Anatomy,” I can just go there and do it. I know that I can get it on my computer, but why won’t you sell it?
MR. MALONE: It’s this nasty little thing called bandwidth, which at the moment is not sufficient in anybody’s infrastructure to give simultaneous random access to everybody.
MR. MOSSBERG:But you think that will happen when the bandwidth gets broad enough?
MR. MALONE:Absolutely. Then you have this terrible reality of commercial life, which is how do you monetize this thing?
MR. MOSSBERG:Hulu has ads.
MR. MALONE: Hulu has ads. They don’t amount to any meaningful revenue stream.

Malone, of course, faced this challenge 30 years ago when everyone said, “Hey, TV is free. It’s ad supported.”
Malone says cable was successful because it blended together the transport service with a charge for the content. Updating the concept for today, Malone adds that a 4G wireless data service (the transport) offers some “very interesting things (the content) that only work if you’ve got enough speed to enjoy them. Perhaps that’s a way that it can be introduced, just the intellectual concept of paying incrementally for content.”
Yesterday, we looked at Om Malik’s answer to the paid content riddle. He believes he can offer his audience premium content worth paying for. The largely as yet unanswered question (for the rest of us) is what does that content look and feel like and how many people will be willing to pay for it.



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.