Last week we wrote about the demise of the cable television industry. Sitting on aging technology and promoting an expensive and outdated business model, the cable industry is losing the loyalty of its customers (assuming it ever had it).
Increasingly, there are a number of viable alternatives for consumers, whereas a few short years ago there were few, if any.
In three years, maybe sooner, the cable industry will mainly be a group of Internet service providers (ISP) with annual revenues a third to a half of what they are today. Of course, cable companies could radically change their business models, but it may be too little, too late.
A recent court ruling declaring net neutrality to be unenforceable may give cable providers a brief reprieve, but any attempts to throttle program alternatives such as Netflix will only further alienate their customers. Verizon was recently accused of doing just that, but despite credible evidence, has vigorously denied it.
Meanwhile, those viable alternatives that exist today will continue to gain mindshare, and in our opinion, will shortly be dominating the industry. In case you’re wondering, we’re talking about Netflix, Apple, Google, and Amazon.
Which brings us to this week’s focus: our ideal television experience. Will it be those industry giants, or some upstart, that capture our imaginations, and our entertainment dollars?
What might ideal look like?
Summed up in a phrase, our view of the ideal television experience is on-demand everything with unlimited programmability. What do we mean by this?
Let’s start with a really easy way to turn on the TV: a simple voice command, such as “TV, power on.” (Of course, there will still be a remote control for you traditionalists.)
We’re then presented with a simple menu, or a group of icons, with a manageable list of options, something like:
At this point we can continue to use voice commands, or settle into our easy chair with the remote.
Once we choose our top-level category, we’re presented with another simple list of options to focus in on our selection. And search is always available if we have a good idea what we’re looking for: “Find Boardwalk Empire.”
The fundamental difference
Our television sets will undergo a fundamental change. The TV set will be a marketplace in our living rooms, and we’ll have a variety of ways to find, select, and pay for the content we watch.
For example, with first-run movies, we’ll pay more or less the same ticket price as we would going out to the movie theaters. Of course, we’ll already have established a connection to a credit source, and payment will be simple and seamless.
With streaming providers, like Netflix, we’ll have already established a membership and be charged as we are today.
With live sports, the leagues will stream all of their games and we’ll be able to choose not just games in our local area but anywhere in the world. And games will be stored and made available for later viewing. In 2013, our Red Sox won the World Series. What if we wanted to watch a replay of that ACLS game where Big Papi, David Ortiz, hit a grand slam to save the Old Towne Team from going back to Detroit down 0-2 in games? No problem, it will be easy to find, pay for, and watch.
What about programmability?
Our TVs will enable us to customize and navigate quickly to our favorite programs. And if we want to binge watch? No problem. All current and past episodes will be a click, or a voice command, away.
What about the free programming we enjoy today? News and weather, and prime time network shows. Well, they’re not really free are they? We still have to watch commercials, and unless we’re using an antenna, we still have to pay for our cable service. But even today most stations have a web presence, and this will continue to be refined and available.
There will be costs associated with the ideal television experience. No one is suggesting it should be free. But at least we’ll pay for the content we consume, not 500 channels that we don’t watch. The market will decide what content is worth.
So what’s the problem?
Why can’t we have the ideal television experience today? The technologies are already here to enable it. So it’s not technology that’s holding us back.
What is delaying the inevitable is, for lack of a better name, the Hollywood industrial complex. Because of a myriad of convoluted deals and good old fashioned greed, the HIC has fashioned a system that works well economically for just about everyone except consumers.
Why can’t we see first-run movies at home? Currently, Hollywood has very lucrative deals with the movie theaters and cinema-plexes. Why mess with success?
Premium television content is shackled by deals with the cable industry. HBO, Cinemax, Showtime, and Starz are technologically able to stream their content, but will not make it available unless you have a cable subscription.
Professional sports, even college sports, are controlled by countless contractual arrangements that make anytime viewing difficult, if not impossible.
Remember the old saying, “If you love something, set it free.” Hollywood moguls may profess to love the artistry associated with their industry, but what they truly love is money. They continue to hoard content, and over-charge for it, and are fighting tooth and nail to maintain their current revenue models.
Problem is more and more consumers are rebelling, spending less, and moving to alternatives. Movie and TV entertainment is becoming a commodity, just like digital music before it.
Why not the music model?
With music, we can go to iTunes, sample music to our heart’s content, and purchase what we like for very reasonable prices. Imagine that: a system that actually caters to consumers. In the process, the iTunes model has reduced the amount of piracy that occurs with digital music. This benefits musicians, producers, and record companies, as well.
It’s arguable that the music industry’s revenues have declined since the advent of the iTunes model, and that may be so. But it has also spawned a robust industry with increasing opportunities for music listening, including the advent of streaming services like Pandora, Spotify and Rdio.
However, for some curious reason, Hollywood loathes the iTunes model. Technologists have provided a better way, and it transformed the music industry. Why not movies and television, too?
Happiness is free choice
If you love something, set it free. Let the market decide what the content is worth, Hollywood. You may be pleasantly surprised. But, regardless, change is coming. You’re either part of the solution or you are the problem. Embrace the change, and you will have a steady stream of revenue, ample feedback to improve content, and, most importantly, happy customers.
By any measure, that’s a good thing.