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Television anywhere, anytime…

Discussion in 'More News from Your Google TV News Team' started by Rickaren, Jul 3, 2011.

  1. Rickaren

    Rickaren New Member Staff Member

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    Television anywhere, anytime…


    July 3, 2011:


    What is the future of television? How is the structure of television programming going to change? Will people be watching TV rather than Internet TV? How will TV-on-demand affect the industry?


    Listing a series of such questions, Bill Roedy, the former head of MTV Networks International, confesses that he does not know the answer to these common posers. He hastens to caution that if anyone tells you they know, you should not believe them. “Nobody knows for sure. The architecture of the business is changing and every media company is grappling with it. This kind of earthquake can destroy great companies but it also provides tremendous opportunities. There are huge shifts in the wind and the goal is to catch that wind and go with it,” writes Roedy in ‘What Makes Business Rock: Building the world's largest global networks' .


    Delivery systems have changed

    Looking back, the author notes that the basic concept behind all of the media world has not changed – viz. the ability to send pictures and sound through the air so countless people can see and hear them at precisely the same time. However, what has changed, and is continuing to change, are the delivery systems, the way content is distributed and the ability of a viewer to choose what and when they want to see, he adds.

    An apt quote cited in the book is of Judy McGrath, the former MTV CEO, that everybody who is making TV content now is thinking about Twitter, Facebook, and some sort of social media connection. The biggest question, according to her, is what kind of content would be successful on the widest variety of platforms. And the answer, as she sees it, is to either aim for the stars or aim for the cool, influential fringe. “The big things are getting bigger, the small things need to be cool and influential, and the middle, the average programming, that's over.”

    The world in your pocket

    Going forward the buzzword is mobile, avers Roedy. Reminding that the television industry used to brag that it could bring the world into your living room, which by itself was quite extraordinary, he says that now the industry can put the world in your pocket, by delivering content to a BlackBerry, iPod, iPad, and eventually every mobile device, sticking to the pervasive theme of television anywhere, anytime.

    An example mentioned in the book is smart TV, that is, a television capable of accessing the Internet. “In the past TVs were sold as cable-ready, but in 2010, 21 per cent of the TVs sold to consumers were Internet-enabled. The technology is evolving and there are still difficulties to be resolved like ease of navigation and eliminating the keyboard, but in the past technology has been able to overcome every hurdle.”

    Foreseeing that gradually all TVs will evolve into a combination of television and computer, Roedy explains that in such a scenario Internet services and websites like Twitter, Netflix, Google TV, Apple TV, and Amazon's streaming service are all going to be available on the living room television, as well as on smartphones and tablets.


    Insatiable need for content

    On the challenge of distribution faced by content providers, the author observes that the traditional business model of providing content to the cable system operators and the direct-to-home operators has become complicated owing to the proliferation of distribution platforms, the only thing common being the insatiable need for content. Reminisces Roedy that only a few years ago many people were writing off content, believing that the ability of people to upload material to the Internet would result in a world of user-generated content. “That was the original appeal of YouTube. User-generated content is available now and some of it is very good.”

    Suggesting, for instance, that if you would like to find someone who sings like a young Beyoncé or a newer Beyoncé, there are sites that will lead you to her, the author underlines that the vast majority of the audience wants Beyoncé – not a younger or newer version, but the real thing. The lesson that he draws is that professionally produced storytelling remains by far the most popular programming across the entire spectrum of platforms, from cable TV to mobile phones. “The most-often viewed videos on YouTube, for example, are highly produced materials that either are pirated or licensed, a trend that I believe will continue.”


    Choice of viewing windows

    In the author's opinion, the most serious challenge facing content providers is figuring out which distribution services in what form produce the best revenue stream. “The equation is what screens among all the possible distribution methods to license with how much content, and under what terms and conditions. On top of all that, you have to determine what kind of viewing windows will allow you to best protect the basic product, the channel.”

    Instructive is the example given in the book of the 2011 deal between Viacom and Hulu, a website that runs TV content for free to viewers after it has aired and profits from advertising, and Hulu Plus, which offers a greater variety of programming and charges subscription fees. “A key point in that deal was a 21-day window. Unique in that agreement was the provision that Hulu Plus would wait 21 days after Viacom's most popular shows, Jersey Shore for example, are initially broadcast before making them available online. Nobody yet knows if 21 days is the correct model, but it's just another step in this evolutionary process.”

    With too many unknowns in the uncharted territory of newer platforms, mistakes can happen by moving forward too quickly or by waiting too long, warns Roedy. A case he cites is of Starz, a collection of pay TV channels, which licensed its programming to Netflix in 2008 for three years for a total of $25 million, essentially giving it away. “In contrast, in 2010 the Viacom-led partnership with MGM and Lionsgate, Epix, licensed its 3,000-plus movie titles to Netflix for five years for almost a billion dollars.”


    Sustainability of subscriber base

    What can be ominous to the cable TV industry is the threat posed by alternative delivery systems to the sustainability of subscriber base. The industry loses business when the consumer cancels his/her cable subscription to receive content through the Internet. Called ‘cord cutting,' the impact of this phenomenon is evident from these numbers, from the US market: “It's not unusual for an American to be paying as much as $150 a month to the cable company for the media triple play, cable TV, a broadband connection, and a phone service. But by subscribing to Netflix for less than $10 monthly, paying separately for broadband for less than $50, and using an Internet phone operator, that same consumer can cut his or her costs by about half.”

    Estimates given in the book speak of 14 per cent of televisions connected to the Internet in 2010; and of the percentage rising to 38 by 2014. “In the second quarter of 2010 the cable industry lost 216,000 subscribers. They just went away. In the third quarter an additional 120,000 left.”

    It may be heartening to the cable industry that the price advantage enjoyed by the competition may eventually erode. “For example, Netflix' $25 million deal with Starz expires in 2012 – and renewing it will be very expensive, so Netflix' cost of content is going to rise rapidly, costs it will have to pass along to its customers. It's possible that Netflix one day will be as expensive as cable TV… But certainly, with advertising and subscription revenues of $150 billion the cable TV industry will do everything possible to protect its revenue stream.”

    Three priorities

    And the cable industry has not been complacent, one learns, what with the series of capability upgrades that have happened in the mature geographies, in the form of HD, TVR, wireless, and VoD. “In addition, cable operators are increasingly broadband connection providers: by the beginning of 2011, 54 per cent of Internet connections were provided by those companies.”
    The book has a snatch of insight from Mike Fries, the president and CEO of John Malone's Liberty Global, the largest cable company outside the US, that 99 per cent of all television is still viewed on the living room TV set and that half the revenue of the industry today comes from IP services that did not exist a decade ago.

    To take the pace of innovations to the next level, and to keep subscribers from cutting the cord, Fries prescribes three things: “Connect our content to other devices, including PCs, tablets, and smartphones; bring third-party online content and apps to the TV; and revolutionise the user interface and experience.”


    Educative read that can add whole new perspectives to your otherwise routine TV viewing.


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