Friday, November 09, 2012

The TV Outlook

I've mentioned this before: getting into TV now is a losing proposition. Here's why.

Cablecos had it easy. They went from TV to ISP to Voice, each move created more profit and stickiness. The MSO already had the content problem kind of solved. By kind of, I mean that they already had contracts for content and were the traditional TV distribution channel. MSO's had already had to negotiate with Fox, ESPN, etc.

VZ, ATT and C-Link went to TelcoTV, spending billions to upgrade the network infrastructure to handle TV. But they already had the high profit stuff - Internet and Voice. They spent billions to get low margin stuff. Even THEY realize that was dumb; hence, VZ CFO claiming FiOS was a bust, even with finally reaching 4 million subscribers.

This list of Top 25 MSO in 2009 doesn't contain DirecTV or DISH or ATT or VZ, but the 2012 list does. Comcast lost about 2M and TWC lost less than a 1M. BHN lost less than 300K, but that represents 11% of TV.

Meanwhile, cable pushed into consumers to steal broadband then voice. Now, cable is pushing into SMB stealing T1 and PRI business from the CLEC's and ILEC. Who do you think won that battle?

Now this article discusses on cord-shaving and cord-cutting on pay-TV may accelerate and really hurt the cablecos. He thinks more folks will switch to LTE over terrestrial broadband, which is what VZ is now betting on with its new market plan.

Gary Kim is betting that mobile TV will be where breakage happens. I tend to think it will be many factors, not just one. So many changes happening at once that no company can plug all the holes in the dyke fast enough - or in a way that customers will be happy with. The fact that it happened to newspapers and music - and the movie and TV industry didn't try to come up with an answer for this already is astounding. Well, really it is a glaring testament to a fundamental problem with America: we hate change, even when it is required. We are steadfast in our belief system to the point of not even listening to any other opinion and discounting all other opinions as idiots.

Competition in the telecom industry is over. It's like the Duopoly got together and said: here you get small biz, consumer broadband, we get cellular and enterprise.

I think that watching live TV is almost over. Most folks watch downloaded or DVR TV. This changes the way TV is distributed and watched. This changes the ball game, whether the establishment wants to admit it or not.

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