Alphabet Spells Cable Model

July 1, 2020

Cable company business models work. Alphabet Google faces some competitive pressure, looming regulatory handcuffs, and softness in its 20 year old “black box”magic ad matching machine.

The fix is to push aggressively and as quickly as possible to lock down clever ways to make money. The most recent example is to charge more than $700 per year to watch YouTube’s millennial cable programming.

You can get details in “YouTube TV Jumps 30% in Price Effective Immediately.” I found one passage interesting:

The news came at the end of a lengthy announcement of various new channels, which users cannot opt out of, all coming from the CBS/Viacom family of cable TV networks.

Does this bold, aggressive move mark the limit of Alphabet’s land grabbing?

No, it is one step on the path of locking down revenues in order to weather the approaching storm.

There are some flaws in Alphabet’s approach. For some YouTube quasi cable consumers, the other options have price tags too. Whatever the competitive environment offers, Alphabet will find inspiration.

What about the “cannot opt out.” That’s the new Google. Like it or leave it. Leaving may make perfect sense to the employees whose bonuses were gutted to pay for Google’s diversity aspirations.

Stephen E Arnold, July 1, 2020



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