Funeral to the business model of Television channels and Broadcasting companies.

With the increasing popularity of online video, broadcasting companies and television channels seem to be based on an outdated business model. The delivery of the videos by the broadcasting companies with a fixed time and schedule for the programs gave advent to the DVRs and Tivo. These companies were fretting about the lost revenues and copyright issues when DVRs were introduced. Well, they are still fretting about it when the customers are moving away from DVRs to online streaming. Videos on demand, whenever and wherever you need is the new model and it would be the future. Televisions will no more be used in the same sense as it used to be but they would become an intelligent display(more like a computer  monitor with a TV tuner card, wifi chip and an application processor inbuilt)

The basic change in the customer behaviour - to watch whatever you want, whenever you want and wherever you want - has come forth with rapidly growing mobile devices, 3G-4G infrastructure and user generated content. The web exclusive minisodes are webisodes have become very popular. A 5 minute clip gets a 2 minute ad - not just ads but interactive ads - that is more economically efficient - allows more revenue for content provider and better understanding of customers for advertisers. No more software - "Apps"(applications) - a word mostly popularized by Apple mainly through iphone is the new "word". Loaded with Netflix, Hulu, Youtube, Crackle, Vudu and other video Apps right in your television, only two new business models can work in the future - 1) subscription based model followed by Netflix and Hulu. - this is not that different from the current subscription for TV channels except you can watch the video that you want when you want 2) Pay per Video aka the "Itunes" model - this is the model followed by Youtube.

This is a major threat to the broadcasting companies - as the new media companies like Netflix,
and Hulu are getting prominent and might displace the broadcasting companies. The studios can
directly sell their content to these new High tech media companies. Broadcasting companies and
cable companies might soon become obsolete. It is difficult to say how long it would take for them
to go obsolete but soon it would happen for sure.

The industry paradigm would be totally changed. The only industry players would be
1) Studios - content providers
2) Data Center providers for content - Think Amazon
3) Video service providers - Netflix - Youtube- Crackle
4) Internet service providers
5) Ad delivery service providers

There is also an interesting factor - the vertical integration
Data center provider becoming video service provider - Amazon being a data center provider
launched its own on demand video service.
Internet service provider becoming video service provider - Comcast is trying out its on demand service.
Content providers becoming video service provider - Sony owns crackle.

Comcast can strangle other players as it controls the ultimate delivery of content and that is exactly
why net neutrality is important and why the other players are making a huge noise about it.

Netflix might seem like an unrivaled player but it uses Amazon's data centers and Amazon is already a
competitor. Netflix's strategy to increase its presence in the sheer number of devices has been working
out well. But it won't be soon when other players catchup.

Given this new paradigm, you could also see why Netflix, Hulu, Youtube and Crackle are trying come up
with original content. Crackle has access to older content - movies from Sony that owns it and it is
ahead of others in original content. One mentionable player is Blip.tv that is only concentrating on
original content and no user generated content.

The broadcasting company and the network will soon become a relic surviving on royalties from older content.

The video entertainment industry is going through a phenomenal change with new business models,
delivery models and changing user behavior.