Business models that need to change include wine and cable
February 27, 2009 — Abigail Hamilton
Mark Cuban makes a good case for paid cable subscriptions creeping online in place of free content online:
This past week several outlets wrote that onine video sites are discussing a new approach that would require anyone who wanted to watch their favorite TV show online to first be a cable or satellite TV subscriber. While the “internet should be free” folks will hate this for obvious reasons, it makes perfect sense. Subscriber fees from cable and satellite to content creators pay the bills. Period end of story. It makes every bit of common sense to provide cable and satellite subscribers, the people who really pay the bills, with unlimited access, on any platform to the content they are already paying for. Right ? Of course right.
But, I disagree. I think the cable companies have made themselves incredibly distrusted by and unpopular with people because many have been greedy, double-dipping fees from subscribers and content providers alike. People are simply unhappy about paying for content they will never watch. I think the business model needs to change, and am totally open to all and any ideas people smarter than I come up with.
The only thing is: the winning solution will respect consumer choice and the consumer wallet.
Wine distribution is another industry that is in need of shaking up, because it’s become very consumer unfriendly. My husband used to work for a California wine club, and it was amazing the pressure that wine distributors exerted upon retailers: “You have to take my junk wine alongside the in-demand labels. Or I will send the in-demand stuff to someone else.” Ugh. And all those magic-marker box cards extolling the virtues of every wine? No, they are no written by the wine shop staff. Most often they are the “authentic” creations of wine marketers and salespeople.
Another less-than-lovely aspect of the current distributor structure for wine is the intersection of customer choice, regional protectivist quotas, and the BATF. People who order wines of their choice directly from the producer in many states are breaking the law. They don’t have adequate choice through local retail outlets because states like Washington regulate shelf-space allocations to favor Northwest-produced wines. California Life blog (“Where Wine Life & Social Media Converge”) gave me hope by covering an effort to make the wine industry work for consumers as well as producers and distributors:
Yesterday the annual Free the Grapes Direct to Consumer Symposium was hosted at the Meritage Resort in Napa. For our 50 state union, there are few, if any substances as regulated in this country as alcohol. In their words, “Free the Grapes! is a national, grassroots coalition of consumers, wineries and retailers who seek to remove restrictions on wine direct shipping. Our goal is to augment, not replace, the three-tier system with limited, regulated wine shipments from wineries and retailers to consumers.” Indeed their work is essential for our industry.
The conference offered some interesting insights on hospitality and customer relationship management from beyond our own industry as well as insights from a few successful wine industry executives describing their own best practices making the difference in their business.
In any industry, Internet TV or wine distribution or anything else: the winning solution will respect consumer choice and the consumer wallet.

