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First the AP, now TV networks are directly competing with their own members. ABC invades affiliates’ syndication business. 9/7/07

Posted by Steve Boriss in Uncategorized.
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It has become clear in the last week that the Internet is rewiring all the existing news and entertainment relationships, jolting local media with future shock. In the old days, there were clear and accepted supply chains connecting news/entertainment content producers and consumers. These chains included indispensable middlemen who distributed material in exchange for a piece of the action. For example, since households could not own the electronic equipment needed to receive news programming directly from remote sources, local newspapers and TV stations sprouted-up throughout the fruited plain to bridge that “last 50 miles” between news outlets and every household in their metro areas.

But now that the Internet covers that last 50 miles, all the way into individual households, news originators like the AP and the TV networks are short-circuiting their long-standing supply chains and cutting out the local middlemen to get a profit boost. Last week, the AP struck a deal with Google News to deliver their news directly to consumers online, cutting-out their members from revenue opportunities. This week, according to LostRemote, ABC is not only making some of its current programming available online, but also its old programming, cutting into the incredibly profitable syndication business of its local affiliates. If the networks continue to use the Internet to leverage their power, and the Internet ultimately becomes the primary medium for the distribution of news and entertainment, local broadcast TV outlets will need to find alternative sources that generate income or it will be “lights out.”

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