The biggest loser, though, would be internet TV companies like Netflix, Inc. (NASDAQ:NFLX). Much of the draw to Netflix, Inc. (NASDAQ:NFLX) is that customers can receive a low cost “cable” subscription and have access to thousands of streaming movies and TV shows. For those who subscribe to Netflix, Inc. (NASDAQ:NFLX) for only one or two shows, a la carte cable would effectively displace the draw for Netflix, Inc. (NASDAQ:NFLX).
In contrast, a la carte cable could be a boon for Amazon.com, Inc. (NASDAQ:AMZN), which sells individual episodes of very popular shows online. Rather than pay each and every month for a full channel just to access a single show on a network, Amazon.com, Inc. (NASDAQ:AMZN)’s instant, no-advertising, pay per view model looks much more attractive.
Media isn’t going anywhere
I’ve identified several content creators that are trading cheaply, and investing significantly in their own stock. Content creators are leading a buyback binge, purchasing their own stock at multiples lower than the broad market.
Content creators will continue to hold economic power regardless of the subscription method. Premium operators like Time Warner Inc (NYSE:TWX) and The Walt Disney Commpany (NYSE:DIS) would likely have more to gain than to lose from an a la carte cable model.
The power is in the hands of the high-quality cable operators. McCain’s legislation would be a boon, not a bust, for the biggest cable companies.
The article McCain’s A La Carte Cable Will Make Content Creators Richer originally appeared on Fool.com and is written by Jordan Wathen.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.