Does TV add Value?
Reader Caution: The Following is a Medium Scale Rant
NYT is running a piece that asks whether the business model for the US TV networks is irretrievably broken. The argument is that the major networks no longer command “front and center” the attention of the masses. Instead, the market for video for home entertainment is fragmenting (which favors more specialized and subscription based cable networks).
I read the piece with no little annoyance. I always thought that business models should start from a value added proposition. If one can add value, one can justify demands for fees (whether those are from advertising, subscriptions, or sales) and manage revenue streams based on the value proposition. From this perspective, the US TV networks business model began losing its “added value” basis decades ago. It was able to putter along despite this because they enjoyed a monopoly — there were no other comparable entertainment vehicles around. Now there are other options. So why the surprise that the networks are losing out? I find it more surprising that they haveheld on for as long as they have.