Francois Caron said:
Point 3 is a bit of a compromise and a protective measure. Canadians have become so cynical over Canadian television, I felt there was a true risk that an unreasonable channel dump could occur.
I dumped all my "channels" while cutting the cord because the idea of channels in the first place is a silly anachronism. People don't really want to watch
channels, they want to watch
content. And they shouldn't need to care when it is broadcast, and if they get left on a plot cliffhanger, they want to start the next episode immediately.
The vast majority of people I know who've watched a bunch of content on Netflix seem to feel that that's how all TV content should be presented. Not the "channel" system where content is distributed around the technological restrictions of the 1950s.
This kind of innovation brings value to consumers as well as investors. For instance, if you invested a dollar into Shaw 5 years ago, it's worth ~$1.40 today. If you invested a dollar into Netflix 5 years ago, it's worth ~$10 today. This is one of the key reasons people prefer watching Netflix.
Francois, while I think you did a nice job on the video I think your simsubbing conclusion is ultimately crazy. It's like talking about what sort of hitch should be used when attaching a horse to a buggy. Advertising won't work that way in the future. In the future, advertising will be highly targeted. That means different people see different advertisements - not because of where they live (US vs. Canada), or what "channel" they're watching but because of the data profile that the advertisers will have on the viewer, and what they think the most effective ad would be.
Targeted advertising is substantially more valuable than "carpet bombing" advertising in TV spots, the way it's done on broadcast TV - and the future of TV (online streaming) allows for it to happen.
It's not necessarily that tampon commercials are wasting half their money when they advertise on The Big Bang Theory (which, lets pretend has a 50% male audience), it's just that the price per viewer is worth half as much as it otherwise would be because it cannot be targeted. If the value of these ad-spots can go up by 500% (or even much higher), the content producer can make 5x as much as they do today with the same 5 minute advertising space as they could previously. Instead of showing a car advertisement to everyone, why not just show a car ad only to people who haven't recently purchased a new car, and have been doing searches about new car models recently.
Targeted advertising slots can be worth 5x-10x as much as "carpet bombing" ads for some companies. This and this reason alone is why Google is worth hundreds of billions of dollars.
Traditional BDUs are the dial-up-modem of video distribution. The world is moving on, and the prize for viewers (in the new world) is a great user interface and you watch what you want when you want. The prize for the content producers is substantially more valuable advertising space. BDUs are going to get screwed, especially if they don't have a Internet business to fall back on. They could try and become a Netflix style video distributor (and some are), but they're not really needed anymore.