The NTL / ITV deal seems quite strange on the face of it and has confused a lot of analysts over the past week who have struggled to see the value in the deal.
Why would NTL, with debts of around £6bn already, want to take on a channel whose advertising revenues seem to be in terminal decline?
The answer seems to be Coronation Street and Emmerdale - namely the content production arm of ITV and the rights it owns.
It came as a bit of a surprise to me that ITV makes 65% of its own content and it is this that NTL wants to exploit, most likely through lucrative IPTV and video on demand services.
Having access to content such as all of the Coronation Street back catalogue will be valuable if it can be exploited properly and it will also possibly drive uptake of cable services, which are in decline at present as Sky’s dominance of the pay TV market continues.
The fact that a major broadcaster such as ITV can be the subject of takeover talk merely on the back of its content production, rather than its advertising model and revenues, is a clear indication of where NTL sees the value in the future.
Content was king once before in the dot com boom and with video becoming ever more visible online, it is set to be crowned again.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment