Business Week has this piece today on DirecTV’s bid to buy into a terrestrial broadband distribution network via a $1 billion WiMax investment. When news of the impending broadband effort by the News Corp.-owned satellite player was leaked by none other than Mr. Murdoch himself, the spin was that New Corp. is itching to break the cable-telco high-speed duopoly.
But BW’s Steven Rosenbush adds another layer of strategy on top of News Corp.’s motivation to jumpstart broadband competition: the entertainment giant, which has been aggressively pursuing web-based businesses, could use the high-speed platform as its own IP video distribution arm.
Over the longer run, the broadband network could provide a ready-made in-house platform for distributing the entertainment and news that News Corp. produces. Media companies are quickly warming up to the idea that the Web is a legitimate way to distribute TV and other content. News Corp. spent more than $1 billion last year to buy Internet properties, such as social-networking powerhouse MySpace and gaming site IGN
Of course both incentives for News Corp.’s push into terrestrial distribution are probably driving the company to mount wireless broadband competition. But with its own pipeline in hand, News Corp. would have nothing to fear from a two-tiered Internet and could even leverage its own broadband platform to cost-effectively launch a range of new IP-based offerings.
Cynthia Brumfield at 1:50 PM|Comments(0)
Blogs We Read
