Next Big Thing: The Future of Television
Today, there was a SuperSession run by CNET entitled “Next Big Thing,” in which CNET editors set out to reveal what’s coming in three key areas: automobiles, personal handhelds and television. We here at CableTechTalk were keenly interested in the third of these topics, not just because it’s a key part of our business, but because our Fearless Leader Kyle McSlarrow was appearing on the panel
There were some interesting tidbits to be heard. For example, there are GPS systems that will search for local businesses as you travel from Point A to Point B and the #1 search is for “pizza.” The audience was polled throughout the session and most people indicated that they were not prepared to ditch their PC for a handheld device that could (supposedly) do it all.
Then Molly Wood, Executive editor, CNET.com, led a discussion with Patrick Norton of Revision3 (pictured at left), NCTA President & CEO Kyle McSlarrow (center) and George Kliavkoff of NBC Universal (on the right). Norton indicated an interest, as have others on the bleeding edge, to ditch traditional delivery methods of television and get all his viewing accomplished online through streaming and downloads. McSlarrow indicated that online content is a great complement to cable, but didn’t express concern that the cable industry should feel threatened right now. A poll of the audience confirmed that the vast majority did not intend to drop their cable or satellite service in favor on online viewing. Curiously, for what one would expect would be a tech-savvy group, about a third of the audience said they didn’t watch any online video at all.
McSlarrow acknowledged how complex the evolving business model for video is, but asked for that business to be allowed to develop without regulatory intervention. He added, “It tells you something about the economics of a la carte. There is enormous value in paying 50-60 bucks a month to watch eight hours a day, selected from hundreds of channels and large VOD libraries. Is that the right model? Let the marketplace decide.”
Kliavkoff also mentioned that NBC Universal’s new video service Hulu replicates what cable and satellite have “done well,” which is to act as an aggregator. He did say that there will be an incremental approach, due to existing contracts, but predicted that contractual issues will change over time.
Norton, formerly of TechTV, took a few shots at cable over the course of the panel and closed with a pitch for a la carte. As part of his rationale for this position, he said that he got hundreds of channels that he didn’t watch, that viewers only looked at about 20 channels over the course of a year and only really watched six of those channels regularly. Of course, as with most people who make this argument, he overlooked the fact that not everyone in a household watches the same six channels and every individual household also differs in terms of their preferences.
McSlarrow noted the attractiveness of an a la carte system, but asked if it seemed as attractive in light of abundant evidence that your new smaller package of cable channels would actually cost you more.
(I refer you to this recent column by the NY Times‘ Joe Nocera which examined the issue of a la carte and stated that “When we pay for the cable bundle we are, in effect, subsidizing those channels for everybody — including ourselves.”)
Tags: a la carte, CNET, George Kliavkoff, Hulu, Kyle McSlarrow, Next Big Thing, Patrick Norton
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January 8th, 2008 at 7:37 pm
Why can’t I choose what I want to watch, be it network TV shows or internet shows! And why do the greedy cable companies say you have to pay extra if you want it your way! I’m with Patrick on this one!
January 8th, 2008 at 8:13 pm
You want to choose what you watch? In a world with hundreds of digital channels, streaming and downloadable video, VOD, and DVRs, I’d say viewers have lots of choice and control.
Oh, wait. Maybe what you mean is that you want to be able to choose the channels you receive, which is a different issue. Take a look at that Nocera column, because he lays the whole thing out. It’s a complicated issue, but the bottom line is that a bundle of offerings gives the most value.
Would it be great to get exactly what you want and pay less than you do now? You bet. Is that going to happen? No.
I believe Patrick Norton made two points. He wants all video content to be available on the Internet. Again, a laudable goal, but that is largely tied to licensing agreements and is controlled to a certain extent by rights holders.
His second point was the one about a la carte for cable. There are plenty of studies – which you can find here – which conclude that a la carte raise the cost for consumers, reduce the number of choices, and decrease the diversity that can be found today in cable programming.
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