Previously, I pondered what cable companies would make of Netflix's new set-top box [reviewed here], which would seem to compete with existing on-demand video services, but also drive up demand for broadband internet. Hardly was the virtual ink dry before I ran across this item: Time Warner, under pressure from shareholders, is spinning off its cable business and is now, according to one analyst, "headed toward being a pure content company."
So, at a guess, and keeping in mind that besides not being a lawyer I'm also not a financial analyst, this might make everyone happy. Time-Warner gets to distribute its content however it likes, including via Netflix if that makes sense. Netflix sells boxes and rents movies, and the cable arm should do OK as long as it can sneak any money it loses in on-demand rentals into higher prices for its broadband service -- perhaps by making sure that the "regular" broadband service doesn't carry Netflix's movies quite as well as the "premium" version.
Wednesday, May 21, 2008
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