Let's start with share of viewership. Mr. Bewkes asserts that with this subscriber model, 85% of households would essentially be getting this access for free. But let's consider a likely scenario, which is that viewers will more often opt for a web-only or broadband service in lieu of a cable package. When you look at services like Hulu, and preference-based platforms like Slingbox, the numbers don't lie -- Hulu is now the 4th largest video service on the web. You also have to consider that video networks probably represent a larger captive base that most of the prime cable networks combined. There are rumblings that this is certainly the case with YouTube.
Now let's look at the value of the content itself. There's a reason why people have been paying for premium channels, HDTV and on-demand services: because there is a greater demand for hi-fi content when the marketplace is saturated with mediocre channels and mediocre content. However, as the Tail extends and more concentrated pockets or niches of quality programming emerge, it seems that there will be less of a "direct" demand for hi-fi content simply because it will be readily available to you. Watch any show on VH1 or The Food Network, and you not only have great programming options, but plenty of options for interacting with that content beyond your TV.
Now we can consider the ramifications for an ad model and the demand on inventory. TV advertising is flat. Why? Because viewership is transitioning to a more "holistic" experience. This means that while people are watching more content on multimedia devices, they're also activated to watch more in their living room - recent ratings analyses support this correlation. In essence, the interactive hand is feeding the traditional hand and vice versa. This is a true form of convergence. So, there still seems to be a loyalty of sorts to ad-supported content, and it seems that the demand on inventory will continue to be, in many ways, dictated by the experience more so than the placement of content itself.
Which brings us to video advertising. Remember that adoption rate in households? Let's assume that the percentage of web-only services, per Mr. Bewkes's assumptions, trumps the 15% mark to something far more substantial - say 25% or 30%. This scenario begs a few questions, the main one being that if browsers are optimized to stream better and more interactive video content (Google Chrome, for example, is optimized for video streaming), then why charge for access to that content? Don't forget that people are willing to deal with ads if they are entertained. And as video platforms get better at delivering ads, and more importantly, integrating branded content, the ad dollar opportunities seem more and more promising.
So is Mr. Bewkes cannabalizing his own future for the need to control the access to content that is already readily available? Perhaps this may be the case. But there also may be some value to his thinking, which is that it will give the cable nets a chance to finally vet out their revenue models, as well as provide more viable options, within a media landscape that seems to be changing daily, if not hourly.