UPDATE: On December 14, 2009 Broadcast & Cable reports on the significance of retransmission fee negotiations between FOX and Time Warner Cable for broadcast television. What if retransmission fees for cable opens negotiations for ISP retransmission fees for all media, including publishers, radio, etc. . .
John Temple blogs that newspaper should emulate the comcast payment model instead of putting up pay walls. The cable model addresses all the flaws I've discussed about the free/ad supported business model.
As evidence that this is a good model for paid media and a better option than Free/ad supported model, the once ad revenue focused networks are recognizing this source of revenue by going after Retransmission Consent Fees from cable operators. Here's an analysis of the increase in these fees.
I think the key hurdle is marketing. Until know publishers relied on 3rd parties to generate circulation - in other words, marketing expertise is not part of their business dna. Likewise, programmers also rely on the cable companies to market and collect the money.
But I believe the return on marketing is there. People will pay more to cherry pick the content they want than to pay a utility for access to choice. This is certainly evidenced by HBO whose subscription levels and profit margins are at all time highs. And certainly Amazon's Bezos sees this opportunity with Kindle business model - he is selling the content - the utility to connect and download is invisible to the consumer.
I know Murdoch objects to the fact that Amazon wants to keep the subscriber relationship. But he could do the marketing himself, capture the subscriber relationship, and pay Amazon a fee to fulfill and distribute.
