When you’re tracking the activity in the consumer electronics market, you follow the industry in many different directions. Though variety tends to keep things interesting and fresh, sometimes it’s more instructive when you keep heading down the same path. From the tail end of 2012 to the beginning of 2013 we followed companies of every shape, size, and sector to what became a very familiar destination: television. What we’re seeing for the future of TV is a dramatic shift in the way we get our content. Here’s a look at what’s been happening lately, and what we can expect in the coming years.
Evolution or Obscurity?
In the past few years, TV has experienced a renaissance, but it took a bit of a dark age to bring it about. Once a great frontier, TV technology became stale and commonplace – the well of innovation had dried up. Sure we got sharper resolutions, larger displays and flatter screens, but the way our content was delivered seemed immutable, and the programming hierarchy that developed early on in television solidified into a sedentary status quo. There were a few power players, a couple of tried and true methods of doing business, and the industry generally operated in a formulaic, “set it and forget it” style.
In our experience, however, all technologies are subject to one of two eventualities: Evolution or obscurity. TV had been teetering between the two, but recent developments suggest that it’s finally on track for evolution, as new methods of delivery have reinvigorated the industry and enticed a host of new players to try their hands. The resulting influx of fresh ideas and free-flowing capital is intriguing to say the least, and has created a new landscape, threatening a once fixed foundation that has weathered the decades with nary a fissure to speak of.
Is the broadcast TV industry up for grabs?
This infusion of new blood has come largely in the form of deep-pocketed visitors from other industries. Microsoft: from computing and gaming; Intel: from processing and chip manufacturing; Amazon: from e-commerce; and Netflix: from movie rentals and streaming media. Many of these industries orbit or interact with broadcast television, but companies like the four we just mentioned used to stick to their section of the pool.
Lately, however, that has been changing – and changing fast. Earlier this year, we saw all four tech giants make big movies into the television space. While the news on Amazon, Netflix, and Microsoft concerned original content, Intel made its splash by telling the industry to expect its Web-TV service – complete with live TV – by year’s end. That got us pretty revved up, as live Internet TV is a bit of a holy grail, but has been protected by the industry’s sentinels for years.
So what gives with the gold rush? Why now? Jon Carvill, Intel’s director of corporate communications, provided DT with some insight:
“We believe the timing is right to take advantage of this market opportunity this year. We think broadband has finally reached a reasonable point where it can support a service like what we plan to deliver. This is of course also helped by major advances in video compression to allow HD content to be delivered at a very efficient bit rate. Most importantly in our eyes, consumer behavior has changed and we now access and consume such a large volume of content online and on-demand. We don’t think anyone has been able to blend Live TV and on demand content effectively yet which is why we believe our timing is good to participate in this growing market.”
In other words: TV is a different animal now – and one that has yet to be tamed. You have traditional broadcast powers on one side, trying to charm it with the same tune that’s worked for half a century, and the upstarts on the other, trying to put a saddle on it.
Out of the bag
For us, the most important element of what Carvill said was the bit about a shift in consumer behavior. The ubiquity of DVRs and streaming media services has provided the customer with a taste – albeit watered down – of what on-demand, a la carte cable could look like, and boy is it difficult to put that kind of cat back in the bag.
But the networks are still trying, suing up a storm and targeting anyone who even slightly upsets the applecart. But still others are trying to supplant those networks, and rather than railing against change, they’re hoping to capitalize on it.
Last one in’s a rotten egg
Take Netflix as an example: The company recently released the hit series House of Cards, a drama series that it’s offering all at once, rather than timed release. There’s no waiting a week for the next episode to be broadcast, no effort to build tension through water cooler talk, just pick up & play, whenever, and wherever you want (assuming of course that you’re a subscriber).
That business model is one that’s shared by Microsoft, as is the year’s end time table laid out by Intel. The Bill Gates brainchild is expected to begin building a catalogue of original content before the dawn of 2014. In Microsoft’s case, the content will be available to Xbox users and will keep on coming, as the company looks to establish “a very robust content production schedule.”
Amazon, on the other hand, has a slightly different approach to creating original content. It is planning to produce pilots for six original comedy series, and will move forward with one based on viewer feedback. Lest you think that plan sounds like a gimmicky way to generate buzz for lackluster content (as we did when we first heard about it) consider that one of the shows (Alpha House) stars John Goodman and is written by Academy-Award-nominated, Pulitzer-Prize-winning scribe Garry Trudeau. It appears Amazon is taking its funny business very seriously.
Don’t forget about Hulu either, which is also relying on original content to distinguish it from competitors. After a spate of original series last year, the service won’t be slowing down in Summer 2013. It plans to debut three exclusives before fall.
It used to be that when we heard that a non-network would be creating original content, we were surprised and intrigued, but nowadays we have a different response: Who isn’t?
Over the last decade or so, many entities have tried to break into the TV industry, but most have done so by pursuing content partnerships and paying other companies (often astronomical fees) for their content. For decades, aspiring media providers have been frustrated by butting up against the un-crackable foundation we mentioned earlier, but many are starting to try a different approach and are doing some building of their own.
Channeling the competitive, entrepreneurial spirit of this country, companies are finally looking at television and saying: “we can do it better.” That’s a reality that should drive progress, and should result in a better product for you: the consumer.
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