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Sorting Out the TV Chaos - A TV Portal
Monday, March 30th, 2009 at 4:38 PM - by John Martellaro
First there was the TV studio fascination with the Internet. Then there was confusion about how to run ads. Then there was technical obtuseness about how to deliver near HD quality streaming TV to multiple OSes. Finally, there is utter chaos as the cable and satellite providers are terrified that the chaotic mess and myriad of choices the TV studios have created will result in a loss of subscribers to the Internet. What we need is vision and solutions, not more technology.
Unfettered technology simply produces too many choices. When people are confronted with too many choices, they freeze up and select none. That's not good for the TV studios.
Apple, the master at reducing a myriad of choices to focused solutions, has the Apple TV. In fact, the satellite and cable providers are now worried that Apple TV and similar devices, like the Netflix/Roku box will lead people down the path of canceling their conventional subscriptions. Their solution? Set up a system such that only conventional subscribers to certain content can also access it on the Internet.
That may be the only realistic financial solution to stem the tide, but in the long run, it's devoid of vision and as a result, customers aren't going to like the process of sorting out what they can watch and what's blocked.
Worse, solutions that help customers through this maze of choices don't help the studios, so there's no incentive to develop one. Here's what I'd like to see some entrepreneurs do.
The Three Essential Elements
1. A TV single portal that allows the viewer to make a list of favorite shows. The portal figures out where the shows are, advises the customer what services are needed, and once running, queues them up for viewing when the customer is ready. The portal may have to run on a box connected to several services.
2. A budget manager. Given that one has a list of favorite shows, some of which are preferred in HD, some of which are preferred without commercials, what is the least expensive way, in monthly charges, to watch all those shows? For example, a combination of DIRECTV and Internet/Hulu may allow me to see Legend of the Seeker, NCIS, Numb3rs, Dollhouse, House, and Saving Grace for the least amount of money. For your list, it might be Comcast Cable combined with Apple TV. Because the right answer doesn't lock the user into any one service, it'll take a third party initiative to provide this service. Think of it as an Excel spreadsheet for TV that allows cost and selection optimization.
One problem I see is that, over time, shows come and go and the customer's choice of favorite shows, as a set, may entail changing services. That's not practical with satellite and conventional cable TV business models, and that consideration alone may doom them as lasting, viable businesses when compared to the Internet.
3. An integrated billing service. Right now, when some shows don't get sufficient ratings, they're summarily axed. That happened to Eli Stone, Pushing Daisies, and Moonlight, all very fine shows.
If subscribers had a way to budget their TV watching, they could commit to certain shows, as they do now by buying a season pass on iTunes. If enough people purchased season passes, the TV studios wouldn't be forced to cancel a show when advertisers don't like the ratings. The infancy portal device, currently called, ahem, an Apple TV, could bring a lot more focus to the world of TV watching.
The TV Meta Layer
Right now, each company in the industry is throwing everything possible at the wall to see what sticks. The eventual winner will be an entity that brings coherence to the TV watching experience in 2010. Apple is good at this kind of thing, but so far, their approach has been to watch and wait, hoping to emerge stronger after all the bizarre experiments fail.
I think it's possible, with the right kind of software, to put a meta-layer in front of the viewer so that all this change and experimenting behind the scenes is invisible to the customer. Boxee and ZeeVee aren't going to do that.
Who will? The challenge is to convince the TV studios that they're all better off working together, maybe at the expense of the satellite providers, than trying to strong arm their way into a competitive position that destroys customer confidence and leads to their demise as viewers expect everything on Internet TV to be free. This is a classic example of game theory, the (John) Nash equilibrium.
Unfortunately, executives are trained that marketing alone can solve their problems. Occasionally strategic partnerships become obvious when it benefits both. However, right now, it seems to me, given the chaos of TV offerings, the TV studios should all be consulting game theory experts to figure out how to give people a focused choice that they'll pay for rather than infinite choice, confusion and paralysis. In essence, that's the Macintosh way.
Unfortunately, each studio fears such a TV portal right now because of Apple's success and power derived from iTunes. So they stumble along, hoping something good will happen by accident.
The Tipping Point and Fortunes Lost
The tipping point comes when the average broadband speed into the average household meets the requirements for high definition (18 Mbps) audio and video. Because the cable companies have planned ahead and provide both TV and broadband, the first to fall will be DISH/Echostar then DIRECTV. They will fail for the same reason that the iPod and Internet killed satellite radio.
The next thing to fall will be any Internet TV watching apparatus that requires a full featured OS, a Web browser, a keyboard and a mouse.
If the cable industry's research arm, Cable Labs, is wondering what to work on next, after DOCSIS 3, an integrated Internet TV portal would be a worthy endeavor. If only they had the expertise Apple has.
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