TV Channels Move to Web

Filed in archive Business Trends on August 14, 2007

Think Outside the Cable Box

Something that I've preached about often here is how broadband is really an alternative distribution channel for video that allows for so many more possibilities than the economics of television. Don't read that to mean that television is dead and the Internet is the future.

So, the WSJ has a story about the Black Family Channel which launched on cable television in 1999. It struggled and struggled to be carried in enough homes to excite advertisers. But that was not to be as the channel eventually got carried in only 16 million homes. Fast forward to today; they are abandoning TV and choosing to become an online-only channel.


And this is not unique. The Lime Channel, which focuses on healthy living also pulled out of cable last year and is online-only. And the Employment and Career Channel, Horror Channel, and HorseTV did the same.

The Journal says that the "shift illustrates how the Internet is offering a second chance to certain segments of old media." This is true, but I would concentrate on a different but related theme - anything new probably should start off this way, too.

Think about it. Let's say I want to start a Cotati accordion Channel and thought that it would appeal to a hardcore group of 7,537 people world-wide. I could never get on cable to do that but I could start a broadband channel. Running an online-only video channel, which doesn't require expensive cameras and broadcasting gear, is cheaper than operating a cable TV channel. While starting a new cable channel today takes an initial investment of $100 million to $200 million, a broadband channel that might be the equivalent of cable needs just $5 million to $10 million to get going. Do it on the cheap and I could build one for under $100,000.

Overall, the worldwide market for online content is expected to grow to more than 131 million households by 2010 from about 16 million households last year, according to research firm In-Stat.