Google Inc (GOOG), Comcast Corporation (CMCSA): Are Television Stations Going Away?

The Future of TV

Netflix CEO Reed Hastings recently told Bloomberg, “Our view is that over the next couple of years as Internet TV really grows, people will look back and say that this was the turning point.” He was talking about that company’s new original series House of Cards. But that isn’t the only show the company has in the works. Netflix is on track to create a large amount of exclusive content.

Amazon.com, Inc. (NASDAQ:AMZN) is heading down the same course, though with a slightly different twist. Regardless, the more these two services start looking like television stations that span the entire nation, the more trouble local television stations will have making money. Even the cable companies will find it increasingly difficult to sell customers on anything more than Internet access. Why pay $100 or more a month for content that you can get for less than $10 through Netflix?

Even Hulu, owned by a consortium of content creators, is going directly to consumers. The Internet, then, looks set to be a very bad thing for the middle men in the media space. This could make the Tribune’s efforts to sell its newspapers an exercise in shedding one struggling segment to watch the next segment crumble in a similar way.

A High Stakes Game

The media space is changing fast. There have already been clear losers, but it still isn’t obvious who the winners will be. That said, Tribune definitely has some challenges ahead. Investors should probably avoid it, even though the change it is contemplating makes business sense today.

The article Are Television Stations Going Away? originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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