It wouldn't take much to upend the measured recovery many media companies have enjoyed this year, and some industry experts say they see trouble ahead. It isn't just the recent economic indicators pointing to a more sluggish than hoped for recessionary rebound that could stretch through 2011. It isn't just the regulatory uncertainties in Washington, or the natural ebb and flow of industry consolidation. And it's not the steady stream of over-the-top technology challenging and eventually replacing the status quo. It's all of these factors combined. Although it takes years for new methods of digital distribution and creation to fully take hold, their presence in such unstable times has stymied, rather than inspired, too many media players fixed on surviving quarter to quarter. We are fast approaching the tipping point where content creation, aggregation and distribution economics will be dramatically altered, if not displaced, by Internet bypass alternatives. A team of industry analysts at Credit Suisse led by Spencer Wang is troubled enough by what they see to have downgraded the entire U.S. entertainment sector to "underweight." That's in response to a forecasted economic slowdown and increased risk from Internet-delivered video to conventional television and film. This is being driven by Netflix's expansion to stream a wide array of video to consumers wherever they are, and the competition about to explode between Apple TV (AAPL) and Google TV (GOOG). "There is a window of opportunity for Big Media to control its own destiny, as they control about 70% of TV viewing required to launch over-the-top Internet delivered video," notes Credit Suisse. But that window will close as low-cost, all-you-can-eat subscription streaming services take hold. The pace of that certain change will depend on developments involving Hulu, TV Everywhere, rumored Amazon (AMZN) and HBO subscription services, YouTube branded video rentals and
Big Media May Be Dwarfed by Internet, Streaming Options
Diane Mermigas is an award-winning business reporter, speaker and journalism professor specializing in business media, data analysis, advertising, marketing, commerce and consumer behavior-related issues and trends. After more than 35 years as a business journalist reporting on media and entertainment, Mermigas authors media-related books, and creates and teaches advanced courses at Boston's Emerson College (Business Reporting and Women in Journalism). Her distinctive thought leadership and actionable business intelligence uniquely span traditional and interactive media, Hollywood and Silicon Valley, as well as Madison Avenue and Wall Street. Ms. Mermigas leverages her extensive knowledge, skills and high-level industry contacts to provide readers, clients and students with a better command of media's interactive transformation. Ms. Mermigas has advised on digital convergence, interactive business plans and thought leadership to companies such as PricewaterhouseCoopers, Fuse Capital, Public Broadcasting, GE Capital and Akoo International. She has been a moderator and presenter at industry conferences, universities and think tanks such as World Economic Forum and the Monaco Media Forum, American University's Center for Social Media and Harvard Law School's Berkman Center for Internet & Society. She continues her ongoing rapport with leading industry executives such as long-time NBC Universal chairman and CEO Bob Wright, with whom she is co-authoring a book. Mermigas is best known for her trademark column, big picture analysis and executive interviews at The Hollywood Reporter, Advertising Age and other Crain Communications publications such as Electronic Media. She also has been a contributor to Seeking Alpha, Business Insider, BNET and Mediapost, CNBC and CNN.