In the US, video streaming company Netflix is gaining subscribers rapidly while DVD sales are falling ("A pointer to profits", Financial Times, 25 August 2010). What does the Pay-TV industry think of this? "We believe the bedrock of the Pay-TV business is exclusivity", stated HBO's co-president.
Well, you would expect him to say that. Following the first law of content licensing, all parties seek to maximise their profits. Thus, channel owners aim for exclusive rights for the content they are distributing, while content owners try to provide the content in as many channels as possible, and leave it to users to decide which channel they prefer. For content owners, it is (mercifully) irrelevant if DVD sales are declining, because there is certainly no decline in the consumption of content - it's just that users are increasingly accessing it via the Internet or by Pay-TV.
As a logical consequence of HBO's desire for exclusive deals on third-party content, it even takes the logical next step of going up the production chain to create its own premium programs, such as The Wire, for the exclusivity they bring with them.
