It's difficult to get too excited about Time Warner's
My ho-hum reaction to the news relates largely to what, it seems to me, is the largely unfulfilled promise of VOD. Indeed, Warner's announcement could easily have been made five, or even eight, years ago, so little meaningful progress has been made on the video-on-demand front in the intervening years.
But here's where I come out on all this: First, I believe that VOD is a potentially terrific functionality, one that can meaningfully differentiate cable operators like Comcast
But neither can satellite compete head-to-head with cable's triple-play offerings of video, telephony, and high-speed data. As a result, especially during the past couple of years, the cable companies have been able to ride the triple play to achieve market supremacy over the satellite providers. In the process, they've only tinkered with VOD and, in most places, haven't turned it into a meaningful and sticky functionality for the consumer.
Interestingly, Chase Carey, DirecTV's CEO, made the point not long ago while speaking at an investor conference that his cable competitors haven't rendered in VOD an effective viewing opportunity. To do so (my assessment, not his) will require the MSOs (multisystem operators) to demonstrate marketing sophistication and even educational prowess -- areas in which they haven't had to become world class.
As to Warner's apparent efforts to feed VOD without starving DVD sales or undernourishing the Blockbusters
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Fool contributor David Lee Smith does not own shares in any of the companies mentioned. He welcomes your questions or comments. The Motley Fool does have a disclosure policy.
