Verizon Doesn't Think Cable's Subscription Model Is Safe
Even as online publishers look at ways to bring the subscription model back, media that are not quite as far along in the technological revolution are wondering how to preserve the subscription model for themselves. Or, maybe they should start worrying more, if this video featuring Verizon CMO John Stratton is any indication. Speaking at Ad Age's Digital Conference, Stratton put the onus clearly on content providers to change their ways, saying they aren't really feeling how their cost increases are felt by those further down the food chain:
"When you go out and say to your customer, 'Hey, we're going to raise your rate by five percent,' ... the reality is typically they are passing through the content cost increases that are generated upstream from them. And so the problem is the content creator maybe feels a bit immune because they are a step or two removed from the immediate, visceral reaction of the end consumer. But as the distributor, we're not, so the content providers need to get their costs under control."He also warned against the industry becoming too complacent:
"My worry here is that people fall asleep at the wheel and they become married to convention and inertia, even with undeniable evidence that surrounds them from many other mediums that describes a need for change... If the content providers don't really get going here, the business is going to just gradually slip out the back door and then they'll be scrambling to play catch up ... There are a lot of good ways to create value here, but as customers find new ways to acquire content, habits will form, and those habits will be very difficult to break if everybody kind of gets their act together late."OK, so far, we've seen the publishing and music industries near crippled by their understated efforts at change. Theoretically, as Stratton says, that should be reason to instigate change in the TV industry, but something tells me ...