Today’s Wall Street Journal has a report (paid subscription may be required to view it) headlined “Hotel-Room TV Tries to Freshen Itself Up”. The article is not about the TV itself as much as it is about the content providers – LodgeNet and On-Command – the industry’s virtual duopoly when it comes to guest choices for in-room entertainment. In an apparent response to the threat posed to the two companies by travelers carrying their own entertainment with them in their i-Pods, DVDs and laptops, the companies chose to merge by Lodgenet acquiring the owner of On-Command, Ascent Entertainment Group.
According to the report “The deal will expand LodgeNet’s footprint to more than 1.8 million hotel rooms from about one million, mostly in the U.S. and Canada. LodgeNet, which says their combined revenue for 2006 totaled $550 million, boasts clients including Hilton Hotels Corp”. On the face of it the deal appears to make sound economic sense with all the attendant benefits that flow from consolidation. But the consolidation arguably masks a decline in the capacity of providers to grow what was once a captive audience of guests and hoteliers. While Lodgenet hopes to negotiate better deals for its programming on account of its larger footprint and revenue base, it is not clear that, like in-room telephone use, this item on the hotel folio is not in danger of diminishing to irrelevance. As the Journal article notes it is not merely i-Pods and laptops that constitute a threat but also new devices such as “the Slingbox from Sling Media Inc., for example, lets owners remotely watch content of their home TVs from anywhere using computers or mobile devices”.
Unfortunately, there is one well that LodgeNet can always draw water from – so called “adult” movies. The behavior patterns of (male) hotel guests away from the confines of their homes remains astonishingly anti-family and, ergo, will continue to be a revenue source for in-room “entertainment”.