Donald Koeleman reports from the Dutch national cable congress
“People come to me with their roll of cookies, for me to put up on my shelves, but then ask me to first finance their cookie factory. That’s something I don’t see Albert Heijn [Holland’s leading supermarket chain] do either”, UPC Netherlands CEO Diederik Karsten told the Dutch national cable congress, Kabel in de 21e eeuw, as he formally announced the launch of the cable operator’s Video-on-Demand service. Adding, “we have serious doubts about the minimum guarantee model”.
This call to end the traditional model of minimum guarantees represents a clear shift in the balance of power between content suppliers and distributors. A shift similar has taken place in the supermarket arena. Here top brands that used to tell stores how much shelf space to reserve for their product lines, and how much to spend on promoting the top brand, are now being replaced with store brands and forced to lower wholesale prices by the supermarket chains.
In the late ’90s major distribution companies trampled each other to get to the content providers first, spending billions to acquire content providers to fill their pipes with stuff to lure customers to their (broadband) services. This was followed by the years of drought, restructuring, in which there was no money to develop new services. Services are now beginning to bloom again.
“Indeed, we now are that big. Large enough for anybody to be interested to work with us on the basis of a revenue share”, added Manuel Kohnstamm VP of public and regulatory affairs at UPC’s parent Liberty Global International.
In the past the cable operator has had some less than fortunate experiences with minimum guarantees, paying the suite of Sony/Disney owned premium movie channels Cinenova for a penetration rate that exceeded its digital penetration as UPC had halted its mass digital roll-out as part of its (financial) restructuring.