JamieG Analysis

Continuing on with my IPTV discussion.

I want to now look at a few headlines we have seen over the last few Years.

The main one of interest is “TV is DEAD”.

All I can see in such a headline is media sensationalism. However, it does show deep anticipation in consumers and traditional media companies.

But realistically what does this all mean.

Lets look at the options.

• Traditional TV
• Cable TV
• Satellite TV
• IPTV – Streaming.
• IPTV – Download DRM/Free (itunes)

None of these markets will go away completely. We are simply seeing fragmentation of these markets and rationalization of them. Ie, the big companies cannot expect to rape the consumers like they have in the past.

So really TV is not dead, it just has more options.

Still, we should have a look at the effects of this change on our current viewing technologies.

Traditional TV.

Of course this will not go away. If only for the best way to stream content such as News and Sport. This alone will keep Terrestrial TV alive and well. Still, the current infrastructure model used by incumbent players will have to change dramatically as revenue will not support the older mentality of how to run there organizations. This is a complex issue, but a quick way to put it into perspective is to compare a TV station on a remote island with a single transmitter and a TV-station in a Box server, compared to a TV station in a big city with 100 of millions of dollars worth of equipment and people running around making sure the old school (Complex as hell) equipment is all working and has redundant systems on redundant systems running like clockwork.

The cost difference between these two TV station systems is worlds apart, but to the viewer.. not so much.

Still, the solution must be some place in the middle, but I am sure it’s a long way from where the current TV stations are prepared to go.

Cable TV/Satellite TV.

Well really, once IPTV starts to really fly, Cable TV is likely to disappear once the current equipment is at end of life. Satellite due to its regional and remote access will likely stay.

IPTV-Streaming.

This is where Cable and Satellite will loose most of its market to. Mainly as current ISP’s try for the Triple play (Voice Internet and Video). Most ISP’s see this as a way to take on the cable companies, and become as profitable and high profile as them.

IPTV-Download.

This is, to me, the future. People will program a box in their TV to fetch all the TV shows they love as they become available. Then give them the option to watch them at there leisure with NO COMMERCIALS. Yes, once you tried it, it is hard to go back. If you can get TV without commercials and it is not very inconvenient. The consumers will.

This is at the same time, one of the biggest threats to production. Torrents, and the ease of downloading video is becoming more and more main stream every day.

An example of this is in my country, Australia, the price of broadband has gone up generally across the board. Unheard of. You would expect it to be going down. But really the reason for this is that consumers are using every byte they are allocated on a monthly quota. Breaking the traditional statistical safe margins of the ISPs.

So what does this mean? More end more consumers are downloading huge amounts of data. Now, what are they downloading??? You would have to be pretty ignorant (Or have political rose coloured glasses on) to miss what is happening here.

As such, this is going to eat into Terrestrial TV and Cable TV (soon to be IPTV streaming) in a big way. And as users get more and more use to this type of transition, the direct marketing of content is going to take of.

I feel consumers will be happy to pay for content they like, without commercials, or with very limited commercials. Still, this price point is still way below current expectations. I would guess $1 per 45min (3 day window to watch) episode is about the right price point. Otherwise, they will keep to the torrents. It is all about convenience, and if they end up spending $40 per month purchasing something they can spend 30 mins a month by clicking on the torrent files… Not convenient enough.

All we need now is new companies who specialize in marketing for direct Producers. I can see new social portals appearing to fill this new gap in our digital media future.