Crazy Dreams: The Future of TV
A year or two ago I read this case study about the music industry and the opening synopsis still resonates with me.
Imagine working in an industry that makes large profits with existing technology; an industry facing unprecedented change driven by shifting consumer demand facilitated by technological innovation. Instead of embracing change, your first strategy is to try banning the new technology. Your next strategy is to eliminate new competitors attempting to satisfy shifting consumer demand, using litigation to put them out of business. Your third strategy is to lobby for new laws restricting consumers from consuming your product in new ways. Your fourth strategy is to use technology to destroy your customers personal belongings and generally aggravate their lives. Finally, your coup de gras is to treat your customers as criminals and sue them for damages; a multi-billion industry settling for thousands of dollars in damages. This is an apt description of actions taken by the music recording industry and its trade association, Record Industry Association of America. Seeking to stave off innovation and squeeze as much profit from an out-moded production and distribution system, the music industry turned its collective back on their customers. They decided that they would rather “fight than switch!”
As a HUGE sports fan I’m starting to see alarming parallels between the behavior of sporting rights owners and record companies. This article - written by Ruslan Kogan, raises some interesting points and really got me thinking.
It's no secret that Internet based media is rapidly gaining in popularity and is beginning to offer some extremely exciting opportunities for advertisers. IP TV’s, tablet computers, and services such as Neetflix, Hulu and Apple TV are all fairing very well with consumers and are driving more and more people into this environment.
In my eyes this continuing growth is placing telecommunications companies in a very unique position. I foresee a shift where they morph away from being merely ICT providers and become content providers as well.
I spent 4 years working in the telco industry, and above all the “triple play” (Phone, Internet and TV) was coveted. TelstraClear has the T-Box in Christchurch and Wellington, Vodafone has its partnership with Sky, and Telecom has/had Tivo.
Rather than investing in traditional broadcast TV I would love to see someone in this space commit to an IP based TV model in partnership with some great programming creators.
Here’s what I would LOVE to see:
Completely customizable content:
Why would you continue to pay for a Sky TV, a model that serves you HEAPS of programming of which you only want to watch a small percentage?
With an IPTV model, programming could be completely stripped down and productized. You would only have to pay for the exact content you wanted. For sports fans this would be amazing and would open the door for international competitions that receive very limited coverage here.
For example your Monthly Internet Bill could look like this:
Phone-line
High speed Internet, 40GB data
12 Movies and 30 reruns of any TV program on a Netflix/Quickflix type service
Sons of Anarchy (new series pass)
Two and a Half Men (new series pass)
all of the Super 15 games (season pass)
all of the NRL games (season pass)
all of the Green Bay Packers NFL games (team pass)
all of the LA Lakers Basketball games (team pass)
all of the Manchester United football games (team pass)
all of the Tennis Grand Slams (tournament package).
The sports packages could be amortized over the months that the season takes place – ie would be broken down to a per-week or per-game cost. This would be the same for a “New Series” of TV where the cost for the season would be broken down into “per-month” payments on your bill. For TV series this would place the power back in the hands of the content creators and the audience - something that needs to happen. See Cougar Town.
Everything on-demad:
PVR’s - MySky, Tivo etc – have drastically changed consumer attitudes towards programming. Why organize your life around TV broadcasting times when you can watch what you want when you want it? With this IPTV model all content would be on-demand. You would have the option of tuning in and streaming it live, or you could log-in whenever and watch it at a time that suits you. Because it is all stored on a server and streamed to your TV you wouldn’t need to worry about hard-drive space either.
Cheap data:
Because this programming is coming to you as products from your ISP it would be unmetered and not count towards your monthly data cap. ISP’s could cache all of this content on their own local servers meaning that they would incur very little/if any costs for distributing it locally. This would solve the current issue with online sports subscriptions where you essentially pay for it twice – the monthly charge for the content and the data cost when you watch it (which can be 1-4GBs for some games).
Targeted Advertising:
Because the ISPs would be serving up this content via their own hardware they could sell highly targeted and highly interactive advertising space. They would know exactly what content you watched (subscribed to) and could therefore send customized ads to your set during the ad-breaks of programming. This could be customized to the point of different ads for different devices – eg if you were watching on your iPad adverts could be interactive games. Not only would this result in you seeing adverts that you are legitimately interested in, but would be a great revenue stream that would help drive down the cost of programming.
This is all a crazy dream at this point in time, but the technology exists for it to be a reality. At the end of the day “what is not sustainable cannot be sustained” and the sooner the big wigs start looking for ways to embrace changing consumer behavior instead of fighting back with lawsuits the sooner models like this will be a reality.