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Recently, Om Malik wrote about old media being “unbundled,” just like telecom was. In telecom, once broadband came along, phone calls became just another application, no longer requiring a specially built, just-for-phone-calls network.
With television too, just-for-TV networks (e.g. the video portion of cable systems) are becoming much less necessary. Instead, with broadband access, everybody could just stream or download whatever they want whenever they want to whatever device they want. Television everywhere.
And it’s not just unbundling the shows from the wires (or spectrum) over which they’re delivered, but unbundling the shows from tired and ineffective aggregation – the channels that carry them. As Om points out:
Today, no one cares if … Fox (s NWS) or the USA Network carries House. What matters is House. The show has been unbundled from the distribution network, which in turn has shifted the value to the show and the not the distribution platform.
House has been “unbundled from the distribution network,” but in a grudging, and confusingly inconsistent way. On Hulu Plus (paid service), there’s a five-show inventory offered on an eight-day delay from broadcast, while over on Fox.com (free), five shows are offered on one-day delay for up to 30 days. That’s just for this show, this season. Actual mileage may vary, and we couldn’t be bothered checking Amazon, (s AMZN) Apple, (s AAPL) Google (s GOOG) TV, Netflix, (s NFLX) Rovi (s ROVI) and who knows what else.
For now, linear TV is still the only way to deliver on television’s fundamental value proposition (and Hollywood’s economic foundation): mass audience reach. So networks still insist on anchoring their marquee fare squarely in prime-time “linear” exhibition, with a bit of Internet tinkering at the margins.
TV as an Application: Overcoming the Curse of Fragmentation
The barrier to media unbundling isn’t so much resistance to unbundling itself as it is figuring out how to make money if you do unbundle.
How do you find, build, and retain audiences big enough to make money while surviving the assault of ever more fragmented distribution and marketing inefficiency? If channels and genres aren’t good enough hooks for organizing content into viewer-understandable collections, what is? The 400-channel universe we already have makes this hard enough, never mind another layer of fragmentation piled on by the Internet.
But show that you have a better, cheaper way to build sizeable audiences irrespective of delivery technology, and even the most retrograde of Hollywood studios will open their doors to consider new exhibition and monetization rights (the cable industry, quite predictably, will be less than enthusiastic).
The first step towards real “unbundling” is to put the viewer at the center of audience building — not channels, shows, or their massive (and massively inefficient) audience-seeking promotional campaigns.
Some time ago, watching TV got more complicated than just watching. It’s now about the entire experience of becoming aware of what’s out there, selecting what you’re interested in, actually watching it, organizing and prioritizing what you watch, sharing it with others, and being reminded and rewarded for staying engaged. And it’s about recognizing that viewers need tools they can use to shape themselves into communities and audiences.
So the second step is to frame whatever new unbundled way of watching TV you’re offering. You might emphasize some functions more than others, you might implement them in very different ways, you might paste together these functions from several sources. But the more lopsided or incomplete your application, the less useful it is, the less sustainably it will build and retain audiences, and the fewer viewer monetization options it will create.
Here are four quick hypothetical examples which illustrate the range of possibilities:
- Video portal: Hulu — or Yahoo (s YHOO) – could be vastly upgraded to provide ways of discovering, keeping track of, sharing, and being rewarded for viewing shows that are widely-dispersed across hundreds of cable channels and web sources and, consequently, are today largely unwatched and invisible.
- Stand-alone service: A web-based service (with requisite iPhone, Android, etc. apps) could straddle all the major underlying sources of commercial video, including linear TV, but without actually delivering the programs themselves.
- Facebook TV: Social networks could provide “friend-sourced” discovery, recommendations, sharing and show-provided rewards.
- Cable plus: Instead of misbegotten DRM and authentication schemes for Internet video viewing, cable set-top boxes could leap two generations ahead of today’s DVRs to provide personalized viewing.
Imagine, too, that television is no longer about monetization through mass audience advertising alone. That each of the scenarios above provides new ways to monetize audience measurement, targeted advertising and promotion, merchandising, bypassing (or complementing) on-air commercials.
Television already is everywhere. What both viewers and Hollywood need are new ways to shape it to their mutual benefit.
Andrei Jezierski recently published “Television Everywhere: How Hollywood Can Take Back the Internet and Turn Digital Dimes Into Dollars.” He is a management consultant focusing on strategy and venture development for media and internet infrastructure companies. He was previously CEO of News Corp. JV/subsidiary Sky Latin America and a consultant at Booz-Allen & Hamilton.