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Sunday, October 16, 2005

The 300 Billion USD Plus TV Industry - Audience Shift & Chaos Scenario

Jeremy Allaire writes that a range of macro forces helping to force a collision between the Internet and the world of video and television distribution. We earlier covered in the blog, the consumer electronics industry is experiencing a "profound change" as fast internet connectivity increasingly allows previously packaged content to be delivered on a subscription or service basis. The consumer market is entering a period of rapid transformation as it moves away from the models which have historically dominated the personal enjoyment of audiovisual media. Jeremy views that the coming transformation promises to reconfigure the video industry in the image of the Internet. The Internet’s forces of openness, global reach, consumer control and participation, and Long Tail economies of scale will create a multimedia universe that no one can fully comprehend. One of its next major frontiers is the realm of video and television production and distribution, promising to radically amplify the already significant fragmentation that digital technology has wrought on the TV food chain.
In the first phase of adoption (e.g., within closed and proprietary distribution systems such as digital cable and satellite, or controlled retail distribution of DVD products) the impact of digital technology has been dramatic and mostly positive. Bill Gates perspective fits in very well here - "TV started as analog, went to digital broadcast, but now is making the evolution to IPTV [Internet protocol TV, which uses Web technology to deliver programming]. And when you go to that generation, you can do something dramatic. Software can improve the TV experience".
Digital technology has ushered in all-digital linear broadcast networks, with an expanding spectrum that can support hundreds of broadcast channels, and now potentially thousands of video-on-demand (VOD) offers. It has brought forth significant reductions in the costs of producing video, and even lowering the costs required to achieve good production values (CGI, broadcast graphics, etc.). This in turn has spawned many new production companies and programming efforts, mirroring the growing range of options offered by cable, satellite and telephone companies. While the choices are stronger than ever for consumers, and the opportunities for distribution for producers and programmers are immense, this wave of digital technology is also forcing fragmentation in the underlying economics of video and television distribution. As we wrote earlier,since the Internet is
open to any digital content
, the television will merge with other activities allowing users to multitask among TV facilities. TV programs can reach the mass audience without going through a gatekeeper, be it a telecom, cable provider or satellite service. Video would be served directly, like everything else on the Web. "Most flat-panel TV sets will have Internet connections in their future". Part II Shall follow.

Category :Future Television ,

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"All views expressed are my personal views are not related in any way to my employer"