Nice way to start off the New Year.
This article says FAR MORE about the future of the TV business than anything I
have read in the past year. My main takeaway is that we have reached a major
inflection point on both the distribution side and content side of the
business.
The real irony here is that we are seeing what happens when the powerful TV
oligopolies face real competition, and the results are somewhat unexpected.
For most of the past century we had three major TV (and radio) superpowers,
joined by Fox in the ‘80s. Nobody dominated - they all worked together dividing
up a massive audience. Then the audience started to fragment...
So they used their political muscle to get their partners in politics to take
control of the cable upstarts. The marriage of the broadcast congloms with
cable was a bit disruptive, but VERY profitable.
Then the Internet happened.
Like cable in the early ‘80s, the superpowers did not see the Internet as a
threat. To be honest, it wasn’t. The IP infrastructure was not designed to
deliver multiple streams of video to nearly 100 MILLION homes simultaneously,
with a high QOS.
But it did educate the world that an electronic communications infrastructure
could be open, “NEUTRAL,” and innovative, while allowing a wide range of
businesses to compete with traditional “WALLED GARDEN” services.
And innovation transformed the Internet from a messaging and file exchange
network into a replacement for virtually every existing communications
infrastructure.
I spent Christmas Day setting up my new iPhone, but could not activate the
cellular service. I soon realized that the “phone” is almost irrelevant now...
But we still send AT&T more than $200/mo to use four of them.
Which raises an interesting question. If you had to give up the “phone” or the
“data” part of your cellular service, which would YOU give up?
“Cord Cutting” can have more than one meaning...
Bert has contended for years, that “live TV” is dying, that it is being
replaced by hundreds of millions of personal video streams that may, or may not
be synchronized with a live event. Truth is most TV content has never been
live, but access to it required an appointment...
The REAL-TIME Internet changed that. My new DirecTV Now service will soon
enable on demand access to most of the “live” streams in the program guide,
within a constantly rolling three-day window. Truly live TV - like the game I
am watching now - is the last bastion of advertiser supported TV; and it no
longer requires sitting in the family room or a sports bar - you can watch it
anywhere on that “phone” thing.
For several years I told Bert that i would “cut the cord” with Cox Cable - at
least the TV cord - when I could access the TV networks I wanted. We did sign
up for Netflix and watched a few shows for a year or two; then we dropped the
service when they raised the price, because we were not using it much. The
article in this thread makes the point than many people face this situation
with multiple subscriptions they do not use frequently.
Last summer AT&T finally offered the “virtual”. bundle I was looking for. We
switched cords. A quote from the article notes that we have reached an
important inflection point now that live TV services like DirecTV Now are
available:
The extent to which current traditional pay-TV subscribers move to virtual
Net TV services in 2018 will likely dictate whether broadband TV solidifies
"a position as either the low budget-end of the pay-TV market or (as) a force
of radical change in the U.S. pay-TV industry," said Brett Sappington, senior
research director for Parks Associates, a research firm in Addison, Texas.
►Competition for content.
Look for streaming services to try to lock down rights for coveted TV series
and movies that will keep subscribers on board, with Disney planning its own
subscription video offering sometime in 2019.
It's already a crowded marketplace, with more than 200 streaming services
available to subscribers, according to Parks Associates. Netflix is the
leader — Amazon, Hulu and MLB.tv. hold the next three spots — and to maintain
its dominance it plans to ramp up content spending to as much as $8 billion
in 2018.
That will likely be needed as Disney CEO Bob Iger has said in the buildup to
launching its own service that the entertainment powerhouse plans to be
selfish in licensing its current content and well as fare it gained from the
$52.4 billion bid for much of 21st Century Fox including its TV and movie
studios.