The cord cutting movement has often been compared to what happened in the music industry after Napster came along. But there are some major differences this time.
The music model was broken when Napster so influenced the market, that it led to individual songs being downloaded – legally. No longer did we need to buy the whole album. The content however stayed largely the same.
In video entertainment, the same “disintermediation of the internet” is occurring but through a very different evolution. There is no Napster. The broadcasters have a tight enough grip on content to prevent that from happening on any large scale. For video, it is original content from competing sources that is emerging as the next big game changer.
Just recently Amazon joined the content game with an unusual crowd sourcing model. Anyone can submit an original idea to Amazon studios and win a $10,000 prize if Amazon chooses to proceed.
Netflix recently rolled out their second original series. And remember Netflix already has millions of subscribers.
Of course Hulu is offering originals as well. But Hulu being owned by major broadcasters represents an effort by the old guard to hold on to control, not break the model.
Now imagine what would happen if some compelling new show on Netflix or Amazon starts cutting into prime-time of the networks? Whoops, there goes the advertiser/broadcaster model. And if Amazon can launch creative new series over the internet at low cost, what’s to stop any company with a large web presence from doing the same?
We could see the emergence of many more original content players. Apple hasn’t announced anything – yet. And Yahoo, fumbling around for it’s next strategy might jump in.
In any case, multiple sources of good original content will lead to fragmentation, more choices, and price competition. All good things for us cord cutters.