Greenfield: Virtual MSO will emerge in 2012; Netflix, Amazon among possible players

A virtual cable MSO will emerge in 2012, using the Internet to distribute national cable networks to pay TV subscribers, veteran cable analyst Richard Greenfield predicted Friday.

Among the players Greenfield says could launch a virtual cable operation are Microsoft (Nasdaq: MSFT), Amazon (Nasdaq: AMZN), Apple (Nasdaq: AAPL) and Netflix (Nasdaq: NFLX), Greenfield said. Pay TV providers such as Verizon (NYSE: VZ), Dish Network (Nasdaq: DISH), AT&T (NYSE: T) and Comcast (Nasdaq: CMCSA) could also use over-the-top video to sell pay TV subscriptions nationwide, he added.

"We believe the stage is set for one or more virtual MSOs to be created in 2012," Greenfield, managing director and media analyst at BTIG, wrote in a blog post. While getting cable networks to agree to licensing deals remains one of the biggest challenges for virtual operators, Greenfield notes that telcos and DBS providers were able to overcome those obstacles.

With rising fees for retransmission consent forcing cable and satellite providers to raise the rates on basic-cable packages that offer subscribers local TV stations, Greenfield said one way a virtual MSO could compete on price would be to use over-the-air antennas to deliver local TV stations to viewers for free. "We wonder whether Roku-like boxes with built-in antennas (Boxee recently announced an HD antenna add-on) or a digital form of broadcast TV along the lines of Aereo (formerly called Bamboom) could eliminate the need for striking retransmission-consent deals," Greenfield said.

For more:
- see Greenfield's blog post (registration required)

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