Are we getting near an industry breakpoint for the broadcast media and television industry? Macro forces are forcing a collision between the Internet and the world of video and television content distribution. This transformation may last for a few good years until the industry fully reconfigure itself.
The Internet’s forces of openness, global reach, social nature, consumer participation and control, and long tail economies of scale will change this industry forever. Digital technology has ushered in all-digital linear broadcast networks, with an expanding spectrum that can support hundreds of broadcast channels, and now potentially thousands of video-on-demand offers. It has lower the costs of producing video, and even lowering the costs required to achieve good production values. This in turn has spawned many new production companies and programing efforts, mirroring the growing range of options offered by cable, satellite and telcos. So any one can produce, edit and broadcast.
BBC decided to offer a large part of its television content free of charge on its website. And earlier, ABC announced it would stream some of its primetime shows in HD online for free. As networks begin to put more and more of their content online — either on their websites or through services like iTunes — both advertisers and viewers win. But is the future of TV-watching online? Is the big box we’ve grown up which just turned slimmer and slimmer will become obsolete soon? I don't think so. There are strong signs that people enjoy learning back as well as leaning forward, they are simply different experiences.
What about the unskippable ads? What is the experience like? Do we feel captive watching them? Or should it be “less skippable” instead. Let's say Disney continues to sell episodes of Lost and Desperate Housewives through the iTunes, the consumer will be able to choose whether to buy an episode that is ad-free (for $1.99) or watch ad-full. Is that a fair approach? The big concern is cannibalization as people will not need to sit in front of the TV and can simply click search and play. Or these multiple streams are offering additional revenue opportunities for content owners? Viewers will be segmented by channel choice and many will use multiple platform. Is this the future of broadcast?
Think about the world of Nike. They sell their shoes through 12 to 15 channels. From Nike Town to Sports Chain to Online Stores to Outlet Stores. This is not a world of one business model. The world is multiple and we will need to work its complexity for our advantage as well as value add for the consumer. The future of TV broadest is a multiplicity model.
Sony is toying with the idea and will launch its new show "Angel of Death" on the Web, but it is using an approach that it hopes will drive sales of DVDs and boost other distribution avenues down the road. The series will be released online eight minutes at a time, over 10 weeks, on various Sony-affiliated Web sites. After the Internet run, Sony will release a traditional DVD of the series, adding scenes to tie the pieces together in a movie-like way. Expect to see more of this.
