Fall 2011 issue of Horizons

televisions are being built with direct internet access, so purchasers will not even need to make a conscious effort to purchase OTT video delivery. The question becomes how will satellite and cable service providers, as well as the broadcasters of the channels they carry, be affected? How can the consumer benefit from OTT video and will it become competition, rather than a complement, to traditional TV distributions? There are money-saving alternatives if you don’t mind investing in some additional hardware. For example, a subscription to Video On Demand is $10 versus $8 per month for Netflix. Put in bunny ears, buy Amazon, Hulu Plus, and Netflix for a combined price of $31, compared to a typical cable or satellite subscription of $80+. But don’t go pulling your current TV subscription just yet. Some of the weaknesses include the need for consistent, high-speed internet access in order to

watch anything in HD without having to patiently wait through long pauses as the streaming catches up. Additionally, it means sacrificing access to some premium cable TV shows and limited access to live sports and live TV. Per Nielsen, households watch an average of 35.5 hours of traditional TV each week, 18.6 of which is original programming and 4.4 hours of sports, so only 35 percent of hours are spent watching what can be watched shortened through OTT Video. providers. TV Everywhere pushes content from your TV to other devices (tablets, smartphones). And at no extra charge to the authenticated consumer, it increases the value of a pay TV subscription. Overall, there remains a place for traditional media. It’s just critical that businesses continually address how new technology affects them and how and when they can incorporate it into their business model. “TV Everywhere” is a new and primary differentiator for cable and satellite service

RubinBrown’s Media & Entertainment Services Group We serve individuals and organizations of all sizes throughout the broadcast, cable, publishing and entertainment industries.

Larry Rubin, CPA - St. Louis Partner-In-Charge Media & Entertainment Services Group larry.rubin@rubinbrown.com 314.290.3338

Greg Osborn, CPA - Denver Managing Partner, Denver Office greg.osborn@rubinbrown.com 303.952.1250

Todd Pleimann, CPA - Kansas City Managing Partner, Kansas City Office todd.pleimann@rubinbrown.com 913.499.4411

Jessica Sackman, CPA - St. Louis Manager

Media & Entertainment Services Group jessica.sackman@rubinbrown.com 314.290.3308

www.rubinbrown.com

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