Thursday, March 5, 2009

A Tale of Two Companies

It was the best of times (NFLX), it was the worst of times(BBI).

I was in Dallas yesterday, corporate HQ for Blockbuster, and their rumored bankruptcy filing was big city news. For consumers, who are voting with their purses that the mail-in DVD/streamed video offering is far superior to the brick 'n mortar and too little/late stream, it's no surprise.

The torrid growth in the NFLX streamed subscription service, coupled with anticipated improvements in bandwidth and large screen access, again highlights that content access is trumping content ownership, and it's only going to get far worse for the ownership folk. DVD sales will continue their steep decline and it will be a challenge for the content owners to replace an ownership revenue stream with subscription dollars in a permacheap and disposable world.

It seems as if the whole content related world is undergoing fundamental and permanent change. Newspapers have gone free on-line, where CPM's, and ARPV (avg revenue per viewer) have plummeted. Cable and broadcasters are under assault by the combination of WiFi and cheap storage/bandwidth that enables folk to disintermediate the set top box. Publishers are staring down the Kindle, Sony Reader and iPhone that will slash their existing business models and, perhaps be a step towards self-publishing going mainstream.

Traditional media is getting that Old and in the Way look.

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