Cable by-pass also means broadcast by-pass

The big CBS announcement yesterday contains a bomb that ought to be getting a little attention the day after. The network is framing the broadband initiative as a “cable by-pass” strategy, and I think that’s terribly smart. Observers such as myself have been writing about this for years.

But here’s the deal. Any Internet strategy that by-passes cable also by-passes broadcast and, in fact, should be seen as a significant event in the evolution of the television network. If you can deliver news (video) directly to customers, why do you need a network to do it for you, and if you can deliver news (video), you can also deliver entertainment. If I was a CBS affiliate, I’d be asking my network rep some very hard questions today.

Observers are noting that, unlike its broadcast competitors, CBS doesn’t have a cable strategy, so this is being framed as an alternative. That’s true, but there are huge differences between broadband and cable. One, users pay for the connection, not the content, and even if that evolves one day, users will be able to select content à la carte. Two, everything online is on-demand. Three, distribution doesn’t require affiliation agreements. Four, CBS will control all the advertising and will — with precision — be able to create benchmarks and accurately measure growth. Five, it doesn’t require playing by any rules (at this time).

I think everything contained in the announcement is smart, smart, smart, and my hat’s off to Larry Kramer. To the television industry in general and CBS affiliates in particular, however, this is a significant stormcloud gathering on the horizon.

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