Research: Free TV Streaming Services ‘Misguided’

Streaming premium TV series on the likes of Hulu has no place in the ecosystem of television distribution, argues media analyst Michael Nathanson in a new report for Nomura Securities (via Variety).

Pay-TV operators’ fundamental business model of collecting subscription fees from consumers — while paying content companies retransmission fees — is sound, Nathanson asserts. But it’s also threatened: “Misguided attempts by owners to allow ‘free’ distribution of premium content on the Internet,” he says, “only damages this vital structure.”

An increasingly crucial revenue stream to the seven largest media companies, Nathanson points out, is selling content to one another via retransmission, affiliate, and licensing fees. For the seven-biggest companies, which include Walt Disney and Scripps Networks, such revenues are projected to exceed $40 billion this year.

Variety has other excerpts from Nathanson’s report, titled “The Only Thing to Fear Is…Stupidity Itself,” on DVR usage and consumer spending on media, including film.

Nomura hired Nathanson in April to lead its new U.S. Media and Telecom equity research team. The publication of Nathanson’s report coincides with Nomura’s opening of an equities trading floor in New York yesterday (via the Wall Street Journal).

• Latest Edition

• Featured Blogs

• 2nd Screen Blog