A follow-up on the TV/internet economy

In my earlier post "Why the internet ruins everything" I talked about the problems facing producers of mass media when it comes to the internet. Well, here is an essay about the problems with streaming content.

Here's the breakdown:
A production company is the ones producing and often financing the show. If the show is a flop, the company loses money. If the show is a success, the company makes enough money to offset the cost of all the duds. The production company doesn't show you the show, however. That's the network.

A network is a branded collection of shows, licensed from various production companies. For the Food Network, it's food-related shows. For ABC, it's shows geared for a wide appeal. For MTV, it's god-awful pieces of shit that nobody should watch but somehow people do. The network pays money to license the show. If the show is a flop, the network loses money. If the show is a success, the network makes enough money to offset the costs of all the duds.

Here's the rub: the agreement to sell to a network carries with it the rights to broadcast it online, and then, only in that specific country. Thats why some shows are available online only to US or UK or whatever audiences. Internet surfers from other countries have to go to pirating or other (pretty much) illegal sites to get their fix. Sucks for people in those countries, but it keeps the deals going in the countries with lots of viewers.

Here's how this messes with my earlier posts:
Under the old model, production companies needed networks to function - that was their distribution method. But networks can come back to screw a production company. Shows with a strong but small fan base (Veronica Mars, Firefly, Dollhouse, etc.) get cancelled, while other shows languish on as quality goes down, but production costs stay low enough to keep it profitable (Simpsons, many reality TV shows).
Now that the internet makes it easy to distribute content on a wide spectrum, production companies can bypass the networks and get content straight to us. We still get our premium content, and the production companies can try to get money from us (selling merch, sponsorship, advertising... the list goes on, with varying degrees of success). Everyone but the network wins.
The network is dying. But until someone can figure out a way to make money off online advertising, the network will continue on life support.

Still, please kill MTV. The sooner the better.