Recent reports have predicted that cable MSOs and direct satellite service providers will loose about one-eighth of their subscribers in 2010. [http://money.cnn.com/2010/04/30/technology/dropping_cable_tv/] There are many devices and services available to facilitate this transition with the promise of shedding $100+/month service bills–and most seem to work reasonably well. How long can this trend continue until the a la carte pricing for those services exceeds the MSO’s bill? Is creating a multi-source-media-masala a task that mere mortals can master? The threats to the big operators business have been widely reported, and their demise predicted. [http://theweek.com/article/index/207507/cable-tvs-impending-death-4-signs] However, I don’t buy it. These are large companies with lots or resources ready to move on new opportunities, just like other giants such as AT&T have done. Some changes in the offerings from Comcast and Direct are for sure, but what consumers really need is some type of personalized aggregations service.
Too many services/Too many transactions
How many disparate services will people pay for? At a nominal $10/month for subscription services and approximately $2 – $3/hour for other content, how many $6.74 transactions are people willing to reconcile? Plus all those small transactions take profit out of the provider’s pocket (good for Visa though!). Apple figured that out and aggregates transactions and makes extensive use of stored value cards.
Television viewing is up: [http://www.multichannel.com/article/454664-Turner_Viewers_Watching_More_TV_In_2010.php] 147 hours per month on average. So is viewing of content on other platforms. Convenience of consumption usually drives increased consumption, and not all of those 147 hours are monetizable–almost half of those hours the TV is left on with no one watching. [http://www.kff.org/entmedia/entmedia012010nr.cfm]
All this should indicate that at $100, the monthly service bill is cheap. It would be possible to pay far more for a la carte content and over the top services.
Future roll for Operators
Terrestrial based operators should have an easy time continuing to provide both base content and connectivity, whereas satellite operators may have challenges as it will be very difficult for them to provide interactive/request-based content. However, both types will continue to see a future in providing the most compelling types of content–breaking news and live events (sports). But will the live sports consumption experience be augmented above the broadcast, or will the broadcast be a component of the integrated experience?
Content awareness and promotion
When the main mode of video consumption is to watch all the episodes of “True Blood” back to back in a small number of sittings from yoaur preferred vendor, how do consumers discover new content sources? That is, when channel surfing becomes impossible and the Sunday night at 9:00 slot is no longer a “TV Appointment,” how do providers draw in new viewers and the corresponding revenue?
I think this is somewhat similar to publishing, where it is possible to consume printed matter from blogs, print magazines, newspapers, and electronic versions of all of these fluidly based on interests. Here a rich system of promotion from Oprah’s book club, to the NYT book review, Amazon recommendations and other systems have grown to make would-be readers aware of the work and attract interest. Such a system for video content needs to be developed as well.
I see a need for a service that can analyze a consumer’s likes and interests along with habits and aggregate content into a personalized feed for that consumer. A combination of Google Reader convenience and TiVo recommendation intelligence. Would viewers be willing to pay an intermediary aggregator to harvest interests from Hulu, Vudu, YouTube, HBO, etc.? Would they be willing to do so my monetizing their eyeballs to relevant advertisers? Would those services be willing to sell to aggregators and forego some subscriber revenue? Could that usher in a service pricing race to the bottom? Or, wait-a-minute, isn’t this what the MSO’s were supposed to do?
Posted by scottrfrancis 
