Can Broadband Replace Old TV, Cable & Sat TV?

14 Comments

Theoretically yes! Especially now that even Comcast and Verizon have started to talk about broadband connections that zap data back and forth at speeds in excess of 100 megabits per second. As the speeds increase, the ability to call up niche content will theoretically be faster than a blink of an eye. From Joost to YouTube — the future is full of video, says The Modesto Bee.

“We’ll move from a world of 300 channels to 3 million” predicted Michael Liebhold, a senior researcher at the Institute for the Future, a Palo Alto think tank.

While it is easy to get carried away in the euphoria offered by broadband nirvana, I would like to temper such unbridled enthusiasm. Between 300 and 3 million stand such pesky problems such as expensive infrastructure to store and serve up this video content. Of course, there is also that damn problem: can video content made for a handful of people actually make money?

Fears that consumers will abandon cable in droves to watch online videos may be overblown, said Bruce Leichtman, head of Leichtman Research Group in Durham, N.H. “Television already works pretty darn well,” he said. “The Internet will augment and complement television. To think it will replace TV is where people are getting carried away.”

I concur — maybe not 3 million, but 3000 would be more like it. After all, who wouldn’t want a dedicated channel of Monk episodes. Or, for that matter, BBC do-it-yourself shows.

14 Comments

bill

Om, here’s what your missing: Cable is canibalizing itself and alienating audiences along the way. Cable 20 years ago was born with the idea that “the whole was bigger than its parts”—that was what differentiated it from broadcast where “the parts (i.e the shows) meant more than the (whole) brands of NBC, CBS and ABC.

Brands were what what was going to differentiate cable from broadcast and for much of the late 80’s and 90’s that was true. People watched “shows” on broadcast but cable grew powerful as ad and audience vehicles because “brands” meant something and the whole was bigger than the parts. People and advertisers gravitated to MTV because it was for them (young music loving adults) not primarily for individual shows. Meanwhile, CBS and other broadcasters were only as good ad their last hit.

Now EVERYBODY is trolling for hits and cable and broadcast are chasing the same fish. Gene Simmons has a show on A & E that could be on MTV, VH-1, Bravo or a b’cast network. Last year or so Tommy Lee had a NBC reality show that could have been on MTV, Spike, VH-1, A & E (why not?), E! or other broadcast networks. Coming soon: a reality show about the “Two Corey’s (Haim and Feldman). The network? A & E (why not?) but it could be on all the usual (see above) cable suspects or b”casters.

My point: cable nets have blurred what made them different from each other AND from b’cast. Now it’s 20 networks chasing hits and the wholes (brands) ain’t important compared to the parts (shows). Individual cable networks has become what it criticized—a collection of shows that could air anywhere—and is competing with its’ fellow cable nets to catch the same fish.

So, OM, minimally by default, but also because there are creative folks that see the internet has become “the” place where you go to find branded content aimed at audiences that share an affinity because cable ain’t doing it, and broadcast never did.

Steve

The reason this is complex is because there are a series of changes happening in parallel.

First, people’s use of time is changing. An hour on facebook is an hour not spent watching TV. (People’s time is somewhat the only thing that doesn’t expand in all this).

Second, I already ‘program’ my viewing with TIVO. Channel surfing behavior was lost when my cable went into channel 200+ (how it’s over 1k).

Third, people confuse entertainment TV with a more info-centric behavior. Yes, coach potatoes still exist, but they’re not that attractive to advertisers. Mass media is great for mass products. But if I’m watching Cranky Geeks on my Tivo (i do!) or YouTube videos on my Apple TV (i do!) then I’m far more likely to be expressing a need that is targetable… think AdSense for Video.

So RSS for TV isn’t likely to replace channel surfers. But it is likely to create a whole new world of ultra-narrow targeted media opportunities.

it’s not about overwhelming choice.

it is about customer expression of interest in content that is meaningful to them.

And that’s only good.

Arno

@ David: I see your point and one of the difficulties with the Long tail is that it is actually based upon retail when it comes to monetization and not so much on content (production and/or aggregation). Making money with content especially deeper down in the long tail is diffcult, but just as it will find an audience, it will find advertisers. The more niche the content, the higher the value of the audience. So all in all it still might be good business, as long as you have the scale.

David

Arno, IMO you might be confusing distribution with content. Amazon does not produce intellectual property…It’s extremely difficult to sell intellectual property to people at a profit unless you control barriers to entry to a) prevent the emergence of new competitors and b) limit the awareness of competing products on the part of consumers. It’s Econ 101 – in a hypothetical environment in which perfect competition exists (the web isn’t that far from it–almost anyone can make an internet video, record their band, or start a blog), firms make zero economic profit.

Wagster, regular TV has reach. Targeted ad buys can obviously be very effective for marketing specific products or services to a specific group of people (esp. when based on behavior, which has much higher predictive validity than demographics), but what about generating awareness? To market products that everyone buys (e.g. toothpaste, laundry detergent, cereal) you need a mass reach vehicle – internet audiences and ad delivery formats and technologies are far too fragmented to allow for this to occur effectively in the short term IMO.

Then to Josh’s point, do you really want to spend the time searching though 10,000 “channels” on the web for something you’d like to watch for an hour or two before you go to bed? Even if video search were perfect, do you always know exactly what you want to watch before you sit down on the sofa? Further, what’s to say that–even if you did–everyone else’s idea of (God forbid) “romantic comedy video” AND “takes place in NYC” AND “has a scene in a diner” as expressed by PageRank or its equivalent among 30,000 results is really what you had in mind all along? How do you quantify an emotional experience without allowing Google to give you a continuous MRI or to put an RFID-equipped computer chip in your brain? Does this mean that we do need gatekeepers after all?

Not that the above implies I disagree w/ the notion that online video will eventually supplant regular TV FWIW, but as they say, it’s difficult to make predictions especially about the future.

Josh Bernoff

Biggest problem in this potential transition — finding what you’re looking for.

Video search still sucks.

Jamison

In the near term, broadband TV seems to be a complement of traditional TV instead of a replacement.

Wagster

Broadcast and cable TV won’t disappear entirely, but it will fade. Why? Targeted advertising will be the internet advantage. When advertising on the internet, ad-buyers will be able to buy demographic segments, age groups, even zip code with exactitude. Furthermore, integration may make it impossible to fast forward through the ads. Regular TV can’t compete with that.

Arno

“We’ll move from a world of 300 channels to 3 million” Who needs channels with such speed? A good search engine and a personal EPG will probably be enough.

“can video content made for a handful of people actually make money?” Does Amazon make money on books published for a handful of people?

I do agree that it will probably take longer than most broadband evangelists want us to believe; TV indeed works so “pretty darn well”

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