Back to the Future… for Broadcast TV

13 thoughts on “Back to the Future… for Broadcast TV”

  1. Interesting. Good points, but long predicted. As with VoIP, this will take 5 years longer than anyone thinks. Control of the pipes & politicians still matters. VoIP has yet to take down any RBOCs, but they howl at times when it comes close to protected revenue streams.

    Net neutrality is the debate over what that control means in a non-regulated world. Neither of the upstarts have any political swag, but obviously can attract silicon valley attention & money b/c its the “next thing.” As to sinking ships, where’s the numbers? Nothing I see shows hulls soon to be overwhelmed by tides of innovation.

  2. This is why ‘net neutrality’ is so bad- if this comes to pass, how are you going to watch those internet only channels- on your computer? No, on your tv, through the phone lines. If the internet tv providers can’t cut deals with the rbocs to get prioritized and into the rbocs set top boxes, they will not make it.

  3. Sorry “me” but I have to disagree. Where will consumers watch this content? On whatever display device they choose, whichever they deem is most appropriate to the content they’re consuming.

    I don’t know how long the traditional television hardware we’ve all grown up with will survive as a viable product. First adopters out there are already adapted to switching between watching video from the Internet or video from their cable/satellite or video from their DVR or video from their game system. I believe we’re entering the age of the generalized HD display, switched to whichever video source the end user wants, and the generalized portable display, similarly switched, or loaded for on-the-go viewing.

    The lack of net neutrality would have very interesting effects on the landscape, given the propensity of the ‘net to route around whatever is viewed as an obstacle. I posit that pricing differentials brought about by different deals between content providers and pipe owners (fictitious example: $.99 iTunes downloads for Cox subscribers, $1.05 for Comcast subs because Comcast has a relationship with Rhapsody) would prompt sophisticated end users to route whomever owns the pipe coming into their home, in an attempt to get the best price per gig of content. They will not keep their techniques to themselves.

    I can’t see this squaring with any interpretation of the DMCA.

  4. More to Robert Young’s point (because my previous post was focused on answering “me” instead of focusing on the original blog post) as those marginal cable channels are pressured, I believe that they will turn to the source of their demise, online distributors like Veoh, Brightcove, Akimbo and others.

    Wouldn’t it be interesting if, say, Current, shut down its cable tv operations, focused on being an online video source, and saw its revenues jump?

  5. What you fail to take into account is that the changing architecture will also bring about a fundamental shift in the cost to broadcast programming. When it is 10,000 times cheaper to multicast an SDTV source on the Internet compared to the current ways, the break-even point of these small cable channels becomes comparitively low. Broadcast becomes a much more economically viable alternative to on-demand, and so the emergence of broadcast companies that specialize in distributing indepedently created content will thrive.

    This change in economic factors could easily flip the situation posed by Robert Young upside down, and you could see hundreds of thousands of niche broadcasters, with each subscriber building their own channel list based on their interests.

    Granted, transmission is not usually the biggest expense for a broadcaster, but for the smaller broadcaster it is undoubtably a bigger percentage. With the playing field leveled on tranmission, the cost of creating the content and marketing it will probably be the main expense. As a result, we might see some decoupling of the content creators from the distributors/broadcasters.

  6. “me” has a good, if completely backwards, point. Without Net Neutrality, what’s to stop the Comcasts of the world from throttling down the service of Internet based VOD services so that they cannot effectively compete with the cablecos’ own offerings? Net Neutrality must not be ignored in this discussion.

  7. Jesse, they can’t compete already, because as a practical matter, you can’t watch internet vod on your tv as a comcast subscriber. So where comcast may go the route of locking your choices down (as they have always done), the rbocs may go the opposite way and open your choices up, and allow you to watch internet vod on your tv. Net neutrality prevents that from happening.

    To Marlin, I think the vast majority of consumers are going to be watching their content on their tvs for a long time to come. You and I may watch shows on our phones or pdas or ipods, but most people just want to sit down on their couch and watch a show.

  8. The article is rather obvious and not a little conservative. If you had said that on-demand would account for more than 50% of all viewing within 5 years, then that would still have been a fairly conservative viewpoint (at least within this corner of the blogosphere). Perhaps it’s just how you categorise it, is viewing on a TiVo/Slingbox considered on-demand?
    I think that within a fairly short period of time every major station will be offering a ‘build your own schedule’ package, or perhaps the channel to market will change to be through Yahoo , iTunes or similar.
    The challenge for the major broadcasters is how to make the transition while still retaining some of the advertising revenue. IPTV (i.e. streamed) is not an effective way to distribute content (do I need to spell it out?) and the public have already shown their preference for the torrent approach.

  9. I would assume the smaller content channels that are being pressured today are quite aware of this industry shift and would invest most aggressively in new distribution and business models. Many of these niche focused content sources are probably going to be better off in the Internet world given the ease of distribution and ability to better target their micro customer segments. Marketing and branding will become much more important as leveraging social networks around niche content becomes critical for survival and growth.

    End of day, content will always be king. Linear / on-demand viewing is a big shift in the way content will be viewed, but it is still just a change in content distribution. Location, device and time shifting will make relevant, strong content more appealing in more places with more devices.

    The bigger question is where will the revenue models be going. Subscription vs. pay per vs. advertising vs. mix. And how does that model differ if you are talking a major vs. micro network. Traditional commercial driven networks are taking a hit in ad $s …

  10. Pretty bold. But highly unlikely, not just because of the time frame.

    Cable is not broadcast. If you look at the balance sheets of those tiny cable channels, it really depends on when they did launch. As a rule of thumb: the older the network, the higher it’s share from the subscriber fees. Which means: real viewership is important. But not that important. As ad revenues are dwarfed by the fees you get from the program packages the MSOs are selling …

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  11. Well seems to me that people don’t have facts and figures always handy to provide when they predict how one or the other of the several choices being put forth in terms of content distribution is being discussed.
    One should note that the major costs for Cable companies was setting up the pipes initially. The Comcasts and the Time Warners of the world did not become large from the get go but were cobbled together to become what they are. As a result they carry legacy pipes that use different technologies deployed at different times and as with any business, they are trying to maximize profits at all costs.
    It should also be noted that offering VOD/MOD is a marginal cost to the existing cable behemoths and when you look at the financial statements, the revenue they generate account for less than 4% of their total revenue.
    TV over the Internet in the US is if not 10 years away probably several years away and for the average viewer, watching shows on the Computer is still not going to be the apt choice.
    The hype sorrounding Digital Homes ( Intel’s mantra) etc shall contineu to remain hype and or just a niche. For the average Joe, watching a Denver Broncos or a Yankees game or the next American Idol or HBO’s award winning shows will most likely remain on the newly bought 40 plus inch HDTV. If and when Internet streaming is reliable, fast, and effortless for use we may see a marginal shift happening.
    Until the various open ended technology questions are answered along with a true desire amongst the incumbents to provide choice to the consumers, we shall see niche markets for everything that is being thrown out there.
    With cheap money available the hope is one or a few of these will stick to the wall.

  12. “Jesse, they can’t compete already, because as a practical matter, you can’t watch internet vod on your tv as a comcast subscriber.”

    What are you talking about? I’ve watched streaming Internet video over my Comcast account. It was of comparable quality to non-Internet VOD straight from Comcast. Yes, it was on my computer and not on my TV, but that is the fault of Comcast’s feature-poor implementation of the Motorola STB and has nothing to do with Net Neutrality. The idea that packet prioritization is required to do quality video is a lie.

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