NEW YORK (TheStreet) -- Henry Blodget always provides a good read. However, even if he doesn't mean to be, he's often quite "alarmist."
Last week, Blodget wrote an article for his publication, Business Insider. He opens his argument with a bad analogy.
He compares television to newspapers as society made the shift from hard-copy black and white to multimedia digital. He claims the television business blindly waffles ahead without acknowledging the same type of transformation simply because people still subscribe to cable and advertisers still spend massive amounts of money on the medium.
Blodget then runs down several reasons why what ended up happening to newspapers will happen to TV -- a sleepwalk into the future followed by a massive, sudden decline in revenue. Each point fails to give television executives the credit they deserve.
A MistakeTelevision programmers have major advantages over newspapers, and they know it. Blodget makes one of the biggest mistakes of our time when he discounts the (staying) power and (sustainable) dominance of cable and satellite companies thanks, in large part, to their relationships with content providers ranging from Time Warner (TWX) and Walt Disney (DIS) to Canada's Rogers Communications (RCI) and BCE (BCE). Unlike newspapers, these companies -- and their larger and smaller peers -- control the content we want to watch. Some even control the delivery systems. Rogers and BCE do in a major way; they are the cable and satellite companies. Newspapers never controlled the franchise new media stole from them -- information. The digital world did not have to pull a power play to render newspapers obsolete. It was right there for the taking. Newspapers face a need way more desperate than television to make wholesale changes to the business model. Just because content owners have not asked the public to kill their television sets and told cable and satellite companies to stop sending them subscriber fees each month does not mean they're clueless about a future we can safely assume is digital. In this regard, Blodget misses a crucial point -- the establishment controls the rules of engagement, not new guard streamers and platforms such as Netflix (NFLX), Apple's (AAPL) iTunes, Google's (GOOG) YouTube or even old guard-controlled Hulu.
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