Thursday, March 31, 2005

E-Commerce News: Trends: Web Sites' Sideline: TV-Type Shows

E-Commerce News: Trends: Web Sites' Sideline: TV-Type Shows

Free markets find the way to the lowest price. Even semi-free markets are often successful in finding the lowest price. The latest Forbes Magazine reported that some companies have set up divisions in the low tax state of Nevada. Divisions in other states pay the divisions in Nevada for services, such as the use of logos. The earnings are reduced in the high tax states and increased in the low tax state.

The latest "web TV station" shows that the free market is going to gradually work its way around cable TV oligopolies. My family owns both CMCSA and TWX. We appreciate that these firms generate large cash flows because of virtual locks on large customer bases. As consumers, my family wants the freedom to watch the shows we want to watch without being forced to buy the "whole cable package". Internet TV is a serious competitive risk for the cable companies. TIVO and others have the potential to organize internet TV content and to distribute it to the public. CMCSA has entered an agreement with TIVO. No doubt CMCSA is trying to insure that TIVO and CMCSA will both "win" by supporting the "package deal" concept.

The "Web TV show" in the article is all about weddings. Other "Web TV shows" will be produced. The shows will likely be niche shows until someone does something special. Then all bets are off. Free markets are famous for delivering "creative destruction". In a free market, if you build a better mouse trap, the world will beat a path to your door. My family will continue to hold TWX and CMCSA but we will keep our eyes open for good viewing opportunities.