have a confession to make.
Late last month, I walked into the Time Warner Cable store on East 23rd Street in Manhattan and sat down with a saleswoman. I left a few minutes later with a bright orange shopping bag, a new Scientific Atlanta digital cable box, and $80+ monthly digital cable subscription.
Okay, that's not too out-of-the-ordinary. Time Warner Cable added 56,000 new digital TV subscribers last quarter, finishing the year with almost 9 million subs. I wasn't alone.
But by buying cable, I was a failure. I was admitting defeat. I was caving in to The Man.
Why? Because I'm the guy who, almost two years ago, returned my Time Warner Cable set-top box to that same store on 23rd Street. I proudly vowed to get all of my TV content from the Internet forever -- becoming a "Hulu household," as I called it.
Showing posts with label Hulu. Show all posts
Showing posts with label Hulu. Show all posts
Monday, July 5, 2010
Sorry, There's No Way To Save The TV Business
The traditional TV industry--cable companies, networks, and broadcasters--is where the newspaper industry was about five years ago:
In denial.
There are murmurings on the edges about how longstanding business models will come under pressure as Internet distribution takes over. But, so far, the revenue and profits are hanging in there, so the big TV companies don't really care.
Specifically, the TV industry's attitude is the same as the newspaper industry's attitude was circa 2002-2003: Stop calling us dinosaurs: We get digital; We're growing our digital businesses; We're investing in digital platforms; People still recall ads even when they fast-forward through them on DVRs; There's no substitute for TV ads. And traditional TV isn't going away: Just look at our revenue and profits!
After saying all this same stuff for years, the newspaper industry figured out the hard way that, eventually, reality intrudes, that you can't stuff the genie back in the bottle. And over the next 5-10 years, the TV industry will figure this out, too.
Here's the problem in a nutshell:
As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today's incumbent cable, broadcast, and satellite distribution models do. As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.
Specifically, TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundation:
In denial.
There are murmurings on the edges about how longstanding business models will come under pressure as Internet distribution takes over. But, so far, the revenue and profits are hanging in there, so the big TV companies don't really care.
Specifically, the TV industry's attitude is the same as the newspaper industry's attitude was circa 2002-2003: Stop calling us dinosaurs: We get digital; We're growing our digital businesses; We're investing in digital platforms; People still recall ads even when they fast-forward through them on DVRs; There's no substitute for TV ads. And traditional TV isn't going away: Just look at our revenue and profits!
After saying all this same stuff for years, the newspaper industry figured out the hard way that, eventually, reality intrudes, that you can't stuff the genie back in the bottle. And over the next 5-10 years, the TV industry will figure this out, too.
Here's the problem in a nutshell:
As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today's incumbent cable, broadcast, and satellite distribution models do. As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.
Specifically, TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundation:
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