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The only thing that could kill TV? TV itself.

Posted on January 3, 2013 by Jeremy Toeman

It’s fun to write about the “death of TV” (or flip flop on it, whatever).  Why it’s so fun, I’m not sure, but I have a hunch it’s because…

  1. It’s a HUGE industry ($500+B/year if not more)
  2. It’s been utterly untouched by the Internet (so far – a thing that really rankles a lot of people, mostly tech bloggers)
  3. The newspaper and music industries both got trashed, so why not TV too?
  4. It’s controlled by a very small number of extremely powerful and wealthy companies
  5. The aforementioned companies have a perception of (a) greedy profiteering, (b) being dinosaurs, and (c) restricting people from doing whatever they want with content, which also tends to rankle said tech bloggers

Arguments for the death of TV are equally fun to read and fantasize about.  They tend to fall into these categories:

  • “Those Kids Today”:
    Theory – Kids today like to watch the YouTubes and the Torrents!  Kids today don’t like to pay for content. Therefore when kids get older, they will continue to watch YouTube and not pay for content.
    Reality – To debunk comically: kids today like Play-Doh, Lego’s, Justin Bieber, and eating Mac & Cheese at every meal – none of which hold true when kids become grownups (well, maybe the mac & cheese bit).  To debunk more seriously: kids have loads and loads of time on their hands and very little money, so they can spend the time and energy hunting and pecking for free content – something most adults (30+, with kids) just don’t have.  Or, it’d be like assuming that because kids like Justin Bieber when they are teenagers they will like equally crappy music in their fifties.  Well, that might just happen I guess.
  • “Cord-Cutting/Shaving/Trimming/Slicing/Thinning/Balding/Receding”:
    Theory – everybody’s quitting cable! EVERYBODY!
    Reality – I’m not even going to bother finding the links, but bottom line is this – for every article that shows XX thousand customers quit Cable, if they don’t ALSO INCLUDE the part where XX thousand customers signed up for IPTV, FIOS, Telco’s, or Satellite, you need to utterly ignore the article.  After that, there’s not much evidence left.  This may change, but that’s just a theory, and one that’s yet to be really substantiated.
  • “The Great Unbundling/A La Carte/Go Direct to Consumers”:
    Theory – In the not-too-distant future, you’ll be able to set exactly the lineup you want, and not pay for channels you don’t watch.  Or you’ll watch *everything* a la carte, paying as you go.  Or channels like HBO will start selling direct to consumers.
    Reality – This is in utter conflict with how the TV industry actually works and makes money. And since they, you know, like making money, and since shows are, you know, expensive to make, they need to keep making the money.  So if channels were to unbundle, they’d instantly get so expensive people wouldn’t be paying for them.  Here’s some of my previous thoughts on this same topic.
  • “Newspapers/Music died!”:
    Theory – Because of the deaths of other industries, TV will die too, as it’s antiquated, etc.
    Reality – This is like arguing that because the coal and steel industries in the US shrank, so will the TV industry. Other than being ad-supported, TV and Newspapers are utterly dissimilar (and BTW, the way the ads work for both are exceptionally different).  Other than being, well, media, TV and Music are utterly dissimilar.  We might as well say the Internet will die soon because it’s just like newspapers.
  • “Startups! Technology!”:
    Theory – Some startup will come along and just utterly kill TV in every way.
    Reality – Yeah, no.

OK, Jeremy, Mr Big Talk Guy, so what could actually happen?  Here’s my theory on what could “kill” the TV industry as we know it – it’s “catch up TV”. For those unfamiliar with the term, “catch up TV” (also called “binge viewing” sometimes) is when you watch a show long after it aired, by days/weeks/months/even years.  Whether it’s via Hulu, Netflix, Amazon, iTunes, Video On Demand, or any other service, it’s the rapidly increasing trend on TV consumption.  And it’s the one thing the TV industry is massively enabling, and could massively come back to haunt them.

In a nutshell, the TV ecosystem is like a big food chain, with advertising dollars acting at the bottom of it all (yes, TV ads are the kelp of the TV world).  Should advertising falter in a notable way (which, by the way, it isn’t at present), it could bring down the whole system.  There are several exceptions to the system, such as HBO, but the numbers there ($1.2B) are literally paltry when compared to TV ads ($90B).  And catch-up TV represents a problem, as it’s not monetized the same way as live TV.  See the Live TV part is where almost all of the $90B of TV ad revenue comes from – hence why ratings declines cause shows to get cancelled, as they don’t generate the cash flow to sustain themselves.

So as we all get further and further accustomed to being able to watch shows whenever we want, we (collectively) are reinforcing the habit of “why bother watch live?”  For example, my friends all tell me to watch Homeland, but I don’t really have the time for a new show right now, so I’ve bookmarked it for later (ahem, NextGuide), and will just start watching it on Netflix.  Along with Breaking Bad, Mad Men, and lots of other shows I know are great, but just haven’t watched – yet.

What, then, happens to highly anticipated shows that launch, combined with audiences who increasingly choose to wait to view them?  They get cancelled (great thoughts on this by Andrew Wallenstein here).   Sure a startup like mine can benefit from this, and even become a fabled Billion Dollar Company (FTW!), but success beyond our wildest dreams will, in no way, replace the lost revenue the entire ecosystem would suffer.  And just as environmentalists are concerned about loss at the bottom of our food chain, if the TV ad system begins to crumble, then so do budgets for new shows, etc.  It ain’t pretty.

Now I’m not predicting the above will all happen – but at the current pace of things, it wouldn’t shock me to see much of it play out.  The TV industry is giving its content away way too cheaply to all the providers to sustain itself without the advertising, and they are effectively disincenting viewers from the live experience (not that it’s not cool to get a sticker or a badge or something, but let’s face it, people are smarter than that – hence the general “meh” of most of the social TV offerings – sorry guys, but #come #on), other than for appointment TV programming.  Further, it has a certain prisoner’s dilemma aspect to it all, as no single network can make the bold move to pull recent content from the variety of catch-up/streaming services – oftentimes their own apps! From the discussions I’ve had with TV execs, there’s a lot of awareness and a growing concern, but no solutions in sight yet.   But, at least it’s the enemy we know…

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Posted in Video/Music/Media | Tags: advertising, andrew wallenstein, catch-up tv, cord-cutting, death of tv, future tv, HBO, nextguide, social tv, TV | 3 Comments |

Introducing the Future of TV newsletter and Twitter list

Posted on August 22, 2011 by Jeremy Toeman

Now that I’m “back in the game” so to speak, I’ve spent the past few months creating a few tools to help me find industry relevant content.  A few of my peers have asked to take a glance “at my tools”, which I found shocking at first, but soon realized what they were talking about.  As such, here they are:

1 – the Future of TV newsletter

Inspired by my colleague Jason Hirschhorn‘s excellent “MediaReDEFined” newsletter, I’ve set up a newsletter that’s just me curating news in the “Future of TV” space.  Topics include Social TV, Connected TV, SmartTV, Second Screen, Four Screens, OTT (Over-the-Top), Cord Cutting and just about anything else that comes along that way.  It’s a fully manually curated production, so you should expect anywhere from 2-20 or so article per day (substantially less on the weekend).

Sample excerpt:

The Difference Between Connected TV, Social TV and Expanded TV (TribecaFilm) | Talk NYC

Posted: 19 Aug 2011 01:39 PM PDT

With television moving onto different platforms, it seems like nowadays we can watch TV everywhere. What is the ultimate future for television in a world that expects more from their

The Cable Customer’s Bill of Rights

Posted: 19 Aug 2011 01:39 PM PDT

Over the past few days, we’ve received more than 1,000 horror stories about bad cable experiences: tales of bad techs, terrible service, and troubling billing practices. We used those to build a cable customer’s bill of rights.

Hope you find this useful, click here to subscribe.  And don’t forget to tell all your friends!

2 – the Future of TV Twitter list

The best way to really *use* Twitter (other than pure self-promotion, narcissism, and stalking purposes that is), is to organize people into “lists” that tend to tweet about a given topic.  Even then, it’s an easy bet that said list will still contain it’s fair share of lunch-related discussion and reality TV show spoilers, but it’s still better than the pure noise of your regular Twitter stream.  I’ve culled a list of people who tend to be more likely than not to tweet about something having to do with the future of TV.  It’s not perfect, and it’s probably still missing some folks.  Here’s a sample:

Note that this is *not* a list of all companies or people in the Future of TV industry, and Twitter accounts from companies such as Miso and GetGlue are conspicuously absent – but this is because they aren’t really tweeting about TV, and are tweeting about TV shows themselves (not to pick on either company – and if there are Twitter accounts from them, or others, that are more germaine to this topic, I’d be happy to include them here).

I’ve also embedded this list into the sidebar of the blog, so you can follow along from here if that’s easier.   Or click here to see the whole list in action.

Hope either of these are useful tools to anyone in this very fun, very fast-moving industry.  Happy to take any feedback or suggestions as well!

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Posted in Convergence | Tags: Connected TV, cord-cutting, Four Screens, future of tv, jason hirschhorn, media redefined, mediaredef, newsletter, OTT, over the top, Second Screen, smart tv, smarttv, social tv, twitter | Leave a comment |

Quick Thoughts: buying a new TV, cord-cutting, smart TVs, delicious shutdown, online privacy

Posted on December 16, 2010 by Jeremy Toeman

I'm on a Truck. With a TV.

Buying a new TV:  I came to the realization that my manroom, while great, was inadequately equipped with a mere 50″ screen.  So I decided to go big (then go home).  Spent a long while researching options, ended up with the Samsung PN63C590, Samsung PN63C8000, and the LG 60PK950 as my top three choices.  Two of these three had 3D and Internet connectivity, the other was just a big honking 63″ screen.  I went with the big honking screen and skipped on the frills.  I realized I don’t much like the current 3D experience in theaters or homes (makes me a little nauseous), and the likelihood that I’d want to frequently watch 3D at home was pretty low.  Regarding Internet apps, I’m not really impressed with most of the available apps, and I’m not very convinced that the current platforms won’t be obsolete within 12-18 months (looks like I’m not the only one who feels that way on both topics).

In a nutshell – the TV is awesome, manroom now operating at near-100% efficiency.

Cord-Cutting: So my new TV is great, and also huge.  And there’s an interesting downside to it being huge – the gaffes of lower quality video are worse than ever.  As soon as everything was hooked up, I turned on the NHL HD channel (sports channels seem to be at the top of the quality spectrum in the HD channel lineup).  All I could see were the jaggies and other terrible aftereffects of the highly compressed video Comcast delivers to my house.  So how did I make my TV look good?  I turned on my Xbox!  I think this “faux” HD experience is something that actually could cause cord-cutting in 2011 – far more than Smart TVs will.  More on this over on the Stage Two blog.

Smart TVs:  Speaking about Smart TVs (the continuity in this post would astound my high school English teacher), I read an article on “What Smart TVs need to Succeed” with the highlights being: Unlimited Content Access, Extensive Use of Apps, and Immersive Experience.  I think I understand that perspective, but I also think it is missing the boat.  People tend to compare Smart TVs to Smart Phones.  If you recall, the first several *years* of smart phones were some truly terrible products.  But when it comes to phones, that’s “ok” because they are low cost (relative to TVs) and owners expected to replace them in fairly short cycles.  TVs, on the other hand, are expensive and consumers tend to replace infrequently (unless of course they have awesome manrooms that warrant the upgrade).  A generation of underwhelming Smart TVs will likely put a damper on the entire industry.  What Smart TVs really need to succeed is great, intuitive, television-like user experiences.  And I will be blunt by saying none of them do it right now.  And I don’t see this changing for at least the first half of 2011.  Which is why we’ve got a new thing cooking in Stage Two’s labs, all about making a really good TV user experience.  Will show ya next year.

Del.icio.us shutdown:  Just like everyone else in the Web 2.0 era,  I used Delicious for about 45 minutes back in the mid 2000’s, then stopped.  I know there’s still a solid fan base, and a lot more people found it a lot more useful than I did, but Yahoo’s let it languish since about 6 months after purchase.  Other than buying a better domain for it, it doesn’t seem like the company cared about it one bit.  And now they are shutting it down.  I think this is pretty terrible, and as I tweeted… “irony of delicious shut-down? bartz could’ve made only $46.2M last year and still had a full-time TEAM on *improving* the product…”  Shame on them.  I’m sure there’s some great spreadsheet somewhere that shows why its the smart business decision, but the audacity of the entire Yahoo situation is just plain infuriating.  Highly recommended reading: Thomas Hawk’s letter to Carol Bartz.

Online privacy:  The entire concept of privacy is up for grabs these days.  Some feel it’s dead, some feel it must be protected at all costs.  I sit closer to the “protect my privacy” camp, and as a result am encouraged to see the government taking some form of action.  Unfortunately, I don’t know how much actual good it will do, but since the industry isn’t self-regulating, I have to assume it can’t make things too much worse.  I remain convinced that the mega-millionaires who run the companies who effectively control our online privacy have the incorrect moral incentives in place, especially considering they can pay their way out of the issues the rest of us face.

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Posted in General | Tags: 10 foot UI, 3dtv, carol bartz, comcast, compression, Connected TV, cord-cutting, del.icio.us, delicious, internet tv, jaggies, LG 60PK950, mancave, manroom, online privacy, Samsung PN63C590, Samsung PN63C8000, smart tv, smartphone, TV, UI/UX, xbox, yahoo | 3 Comments |

My cord-cut TV set-up

Posted on December 8, 2010 by Ron Piovesan

Following my last post, I thought I would explain my personal cord-cut situation and highlight what is working for me (and what isn’t) as I try to enjoy TV without cable.

First off, the main source of video entertainment (both TV and movies) is Netflix accessed via a Roku box.  Yes, we don’t get the latest content and yes, the selection is somewhat restricted, but there is enough there that keeps our interest.

I’m also a huge fan of webTV, which I access on Roku or online from my computer (my wife thinks I’m nuts, for a bunch of reasons of course, but my webTV hobby is one of them.)

The big gap here is sports. I get around this because I’m simply not a sports fan, so even if I had cable I wouldn’t watch a lot (or any) sports. (Full disclosure: I saw, and loved, the Vancouver Olympics on cable before I cut it)

I did get an MLB.com account (and jump on the bandwagon) to watch the SF Giants in the World Series. I loved the experimentation of it all and found the experience to be good.

The one sport I do enjoy (and miss dearly) is Formula 1 racing. Right now, I have no good way to follow my favorite fast cars. I read some of the updates online but that is a very sad alternative to watching a thrilling race live.

Also, HBO… That is another huge gap in my viewing pleasure that I miss. We get a lot of the shows on DVD via Netflix but it would be beyond fantastic to have a streaming solution.

As far as news and current events, I get that online, in magazines (I love magazines) and increasingly via electronic magazine purchases on my iPad.

My next moves? Well, I’ll be getting an HD antenna soon to watch over-the-air TV. This will let us watch some interesting shows and hopefully some big events, like the Oscars. I was considering Hulu Plus on Roku but it sounds like that offering isn’t as complete as it could be, so I may wait it out.

Two other disclosures:

1) I’m actually skeptical that this whole cord-cutter thing is a really huge trend. I think people will come back to cable once the economy improves and once cable companies up their PPV game. Cord-cutting will increasingly be a viable option, but it won’t have huge adoption in the mainstream.

2) For the record, I’m not a cord-cutter out of some religous hatred for cable companies. They aren’t my favorite companies in the world but they’re better than oil companies. I’m a cord-cutter for fun. I think it is fun to fiddle with gadgets and find ways to watch TV on my own terms.

Plus I’m super-cheap and I love saving the $60 a month. (If you cancel Comcast Xfinity triple play and get Internet and a landline separate, the savings is about $70… not a lot but I’ll take it.) Factor in the $10/month for Netflix and you walk away with $60 in your pocket and a chance to play with all the inputs on the back of your HDTV.

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Posted in Gadgets, Web/Internet | Tags: cord-cutting, Netflix, roku, webTV | 4 Comments |

Is cord-cutting real?

Posted on December 7, 2010 by Ron Piovesan

We’ve all heard about the recent declines in cable subscriptions as of late and the digerati are breathlessly declaring this to be the ear of “cord-cutting”. The real test of the cord-cutting phenomena will be once (or if) the economy ever picks up. As stated:

Neil Smit, president of Comcast Cable, acknowledged in a recent call with investors that some customers had dropped cable for free signals. Company executives also said they expected business to rebound with the economy.

That may very well happen.

Thus far, despite all the brou-hah-hah, the relative number of cord-cutters has been small and it has mostly been low-margin customers, the type of customers cable companies don’t want anyway.

You could reasonably assign those customer losses to the crappy economy and anticipate customer increases once things get better. If that happens, then “cord-cutting” has been a fad. But if the downward trend in customer subs (or the upward trend in cord-cutting) continues when (or again… if) housing and/or employment picks up, then the cable industry is in trouble.

I’m a fan of the cord-cutting movement (as a cord-cutter myself), but I’m skeptical about how real this trend is in the mainstream.

There are a number of wild-cards out there besides just the economy. For example, high-profile channels like HBO start making their own moves could nudge cord-cutting from fad to trend:

(Time Warner Inc. Chief Executive Jeff) Bewkes has suggested recently that HBO could be sold directly to consumers on the Web.

HBO going online is a big WOW.

Also, the big question is of course sports, and how/if you’ll be able to access outside of a cable subscription.

The question ultimately comes down to money. Yes, Netflix may have almost 17 million subscribers, but under its current deal Starz, a key supplier of content  to Netflix, makes only 15 cents a subscriber, compared to the $2/subscriber it makes off of cable companies.

Until content owners and distributers start making that kind of coin, marquee content will remain elusive on cord-cut TVs, which may squash the cord-cutting revolution.

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Posted in Video/Music/Media, Web/Internet | Tags: comcast, cord-cutting, internet tv, Netflix | 2 Comments |

About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

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