Hyper-Syndication vs. Walled Gardens
Amongst the topics that connects the business of traditional television and our new broadband video market is this: there is a clear division between the owners of content and the portals that want to 'air' that content.
If you own popular content, your interests are best served by getting it out to a wide audience and have someone pay you – whether it is the portal, advertisers, or subscribers. Your biggest worry is piracy; that is, making sure that you do not lose control to others. The best buzz words for this is hyper-syndication
If you are a portal (or distributer if you like), your interests are best served by keeping viewers coming to you for the content versus going elsewhere. Sure, you try to make the value proposition compelling and do good for the viewer. But the best way to succeed is to be the only place a viewer can go to watch the video. The best buzz words for this is walled gardens or wall communities.
But before you think this subject applies only to the Internet, look to the recent news about Major League Baseball. The short story is this: MLB put a proposal together to run out-of-market games under a package called "Extra Innings" to be launched in 2009. They really want their own Baseball channel on cable that will run for free on the analog tier of MSO's.
In the hardball (pun intended) business of television, one content owner (MLB) cut a 7-year deal first with DirecTV. Then they went to the cable MSO's and stated their terms for the Baseball Channel. If cable companies don't agree to that deal, then DirecTV will have the package exclusively (they will be a walled garden). If they do agree, then MBL will have a yet another avenue through which to make advertising money because their product appears securely in more places (hyper-syndication).
No matter how this turns out, you have to admit the game (TV, that is) is interesting to watch.
Posted by admin on March 12th, 2007 :: Filed under Business Trends
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