By Andy Marken
It's interesting to watch the TV networks and cable providers brawl over who is/should get the biggest share of the entertainment payment pie. Especially when both sides are making handsome profits.
But they always seem to "work things out." Cost is simply passed along to you!
But fewer folks are tolerating the constant increases because today consumers have more options ... a lot more options.
Those that do ... its habit!
For Gen Yers who grew up always knowing the Internet was there for them, it's become their first choice for entertainment with almost limitless "TV" channel choices.
And it all happened relatively quickly:
- 1999 – Victoria's Secret fashion show "aired" online, choking the Internet
- 2000 – Samsung introduced the first cellphone with a built-in camera and people started uploading all their best stuff to the web
- 2005 – YouTube formed but online video infrastructure could barely support viewing activity
- 2010 – a team of scientists/engineers send a GoPro camera into near space (80,000 ft) and the online video has been viewed more than 3B times and copied hundreds of times
- 2012 – the 4.13 minute Gangnam Style video was posted on the web with duplicates at YouTube and Facebook. To date, there have been more than 20B GS views, 40M copies downloaded, billions of mentions/likes/links around the globe. No one said taste was a prerequisite for being on the web!
New choices keep coming every time we turn on our smart TV set, tablet or smartphone.
Smart Options – Today's smart TVs, like some of LG's units, are not only being bought by consumers, they are finally being connected to the Internet with streaming media players like the Nuvola as people begin to move beyond the standard cable/satellite bundled offerings. With the Internet, people can find and enjoy content that is of interest specifically to them, rather than the general audiences networks try to appeal to. The anything, anytime audience is also gaining the attention of marketers and advertisers.
The Times Warner Cable/CBS negotiations (and blackout) will probably help a whole bunch of people realize they do have an option to the constantly rising cable bill.
Dalton warned both sides, "I want you to be nice until it's time to not be nice."
Connection Options
Today's smart TV can be connected to TV sets with your Xbox, PS, NanoTech Nuvola or Roku to deliver a world of news, information and entertainment.
Sure, everyone would like to upgrade their screen to a smart TV; but face it...even with prices coming down they ain't cheap.
And it's hard to justify a new set when the present one is only a year or two old if the content isn't 4K quality.
Dalton calmly said, "I want you to remember that it's a job. It's nothing personal."
That's why, according to ABI Research, the global market for smart streaming devices and dongles will surpass 18 million units this year. The research firm projects the market for smart units and dongles will grow at a rate of 10.8 percent through 2018, thanks to areas like the Asia-Pacific and Latin America.
Then too, people like Netflix, Hulu, Amazon and iTunes are producing their own entertainment to compete with cable networks.
Freedom of Choice – The rising cable/satellite company monthly charges plus the younger generation that is growing up on the Internet (who never had a conventional TV connection) are helping people seek out new options for their TV time. Cable cutting is only a minor movement but it is forcing the entire entertainment industry to take a fresh, new look at its business model.
Rising monthly charges and professional alternative content are making it very easy for more and more people to cut the cord and move their viewing to the Internet.
Of course, there's always the tablet or smartphone for viewing.
If you're connecting at home, you're probably using a cable operator, cheaper but still...
The number of online video viewers this year will be about half of the 2B plus people who use the internet.
Cable Plus
But it's not always a matter of cutting the cable. There are a number of reasons people want to watch their content over the internet or add the online activity while viewing cable shows.
My TV – Consumers around the globe are adding the Internet to their TV/entertainment viewing options on all of their devices. In many instances, people blend plain-old-TV with Internet- connected device activities.
What does bother the content selling side of the cable company is the trend that is being set by the younger generations to simply do everything on the Internet.
Researchers at RVA recently found that more than 25 per cent of under-35 broadband users consistently got all of their television/movie programming through the Internet and didn't access broadcast or cable programming at all.
Life on the iNet – While cable/satellite companies continue to have good viewing numbers, they also see those numbers decreasing. They are really focused on the Gen Y and teen generation audience which has have never bothered to sign up for the rising annual TV fees but has always taken advantage of Internet-available news, information, entertainment.
About half of this group had never purchased programming from a cable or satellite television provider.
Across all age categories, a growing number of broadband consumers are now receiving all of their programming from the Internet.
Content owners think that direct relationship is a natural growth, so expect a mish-mash – pay TV and OTT coming to your smart TV or smart dongle/box.
Traffic Boom
The video/audio content over the iNet push has been surprising (thanks to the kids showing the way).
Global internet traffic has skyrocketed:
- 1992 – 100GB/day
- 1997 – 100GB/hr
- 2002 – 100GB/sec
- 2007 – 2,000GB/sec
- 2012 – 12,000GB/sec
- 2017 – 35,000GB/sec
Wade looked at all the potential entertainment coming across the wire/airwaves and said, "I'll get all the sleep I need when I'm dead."
Content suppliers are feeding an almost unquenchable demand and infrastructure folks are rushing to keep up because according to a recent study, 60 per cent of the streams suffer quality degradation leading to re-buffering, slow start up or poor picture quality.
FTTH (Fiber to the Home) folks in the Americas like to say they're going to be the ones that meet the demand but people like Cisco, Ericcssen and Alcatel take a less myopic view and look at the global demand.
Infrastructure Build-Out – Consumers have kept the leading Internet suppliers and providers very busy (and profitable) by demanding higher-quality video content. The demand for content on any device is projected to continue to increase to the point where video will be the primary consumer of Internet traffic in the near future.
All forms of IP video (Internet video, IP VoD (video on demand), video files exchanged through file sharing, video streamed gaming, and videoconferencing) will reach 86 percent of total IP traffic.
By 2015, Internet video will account for 55 percent of all consumer iNet traffic.
By 2017, global IP video traffic will be 73 percent of all iP traffic.
Internet video to TV will be 14 percent of consumer Internet video traffic by 2017 and by then, VoD will be equal to six billion DVDs/month!
But it isn't all just about mindless entertainment.
The smart TVs, boxes and dongles will deliver a lot more to the home viewer/user.
Resource Center – Almost every segment of business is finding new opportunities to deliver news, information and entertainment over the Internet. Cable and telco firms see growing sales/service opportunities, while other business segments see opportunities to get closer to their individual customers.
Over the next few years, we'll also localize and personalize our communications, messaging, shopping and music/visual entertainment.
Telcos and cable folks are also "encouraging" us to upgrade our appliances, connect them to the iNet and manage our homes from anywhere.
The healthcare industry is also focused on newer, better and more advanced/complete ways of monitoring and delivering healthcare.
All of it--not just to your lowly flat screen but also to your tablet, smartphone and, oh yeah, computer.
As Dalton said, "It'll get worse before it gets better.
Then, he looked at both sides in the contract negotiations and said, "My way... or the highway."
