Give Them What They Want Before Apple and Google do

Dear Rupert, Bob, Jeff Z., Jeff B., Sumner and Les,

There’s been a flurry of discussion recently about what’s ailing television and seemingly no shortage of ideas on how to improve it.  So here’s one more… give viewers exactly what they want.

In the simplest terms, viewers want all their favorite shows on-demand, anytime, anywhere.  Sure it’s obvious; but today’s “television” is a completely disjointed experience and could hardly be described as “anytime, anywhere” and that’s bad for everyone.  Viewers are already way ahead of the curve, but they’re forced to cobble together shows stored on their DVRs, downloaded over P2P networks, rented from Netflix and Amazon, shared on YouTube and Facebook, synced to their iPhones, and streamed from your own show web sites.

Rumors abound that Apple is well on its way to delivering a more coherent solution– a subscription-based, on-demand, anytime, anywhere service dubbed iTunes Replay and an actual Apple TV with DVR-like capabilities.  Coupled with the extraordinary popularity of the iPhone, Apple may once again shake up and “reinvent” an entire industry.  That would be the third time in less than a decade (see the disintermediated fragments of the music and mobile industries).

This is, of course, exactly the kind of solution your viewers are demanding, so it’s certainly within your interests to partner closely with Apple.  But it’s also clearly within your interests to ensure no one player amasses too much control over this new ecosystem.  You’ve got to equally embrace and empower other competing services to play a counterbalancing role.  In terms of paid offerings, Netflix and Amazon are in a great position to turn their limited rental services into anytime, anywhere subscription services.  If you can ensure they have more timely access to more content (next day? same day?), and if they can keep forging strong consumer electronic partnerships, you’ll have yourselves real counterweights to Apple.

But, as is the case today, not everyone is going to pay for television, and that’s why you’ve got to take a shotgun approach.  Broadly license your content to as many viable, ad-supported services as possible.  Here, YouTube, Hulu, and your own show web sites come to mind.  But just as it’s necessary to counterbalance Apple in the paid subscription space, you’ve got to counterbalance Google in the ad-supported space.  After all, when it comes to finding content, Google already controls 70% of the market and their stated ambitions regarding television are clear.  Hulu may be your best bet.  But as evidenced by the Boxee flap, the lack of ABC programming, and complications with CBS, Hulu’s obviously been encumbered by their ownership structure– perhaps a spinoff or sale [to a cable or consumer electronics company] would go furthest in strengthening their long-term viability and competitiveness.

While Apple and Google are best positioned to win in this new ecosystem, the cable companies and consumer electronics companies would appear to have the most to risk… but that’s the wrong way to look at it.  The Sonys and Samsungs of the world can easily broaden and deepen their partnerships with Netflix, Amazon, YouTube, Hulu, and others.  While far from rolling over, cable companies’ role as [content] service provider will erode; but they should be more focused on improving data services, access, and reliability as they face increased competition from mobile carriers with the coming intersection of fixed-line and wireless data [by way of LTE and other 4G technologies].  They will find plenty of revenue in upselling customers to premium broadband subscriptions to support these new television services.

Lastly, while you’ve been primarily fixated on the risk of jeopardizing existing cable programming fees and steady, but decreasing, ad revenue, the digital transformation will soon be nearing a tipping point.  The great thing is that you’re already thinking along those lines; but be careful not to cling too much to old models and ecosystems and not to underestimate the appeal and sway of today’s consumer services. It’s imperative for you to get ahead of the curve and help guide the change by giving viewers exactly what they want, embracing and empowering new competing and sufficiently counterbalanced services, and discovering a wide array of new sources of revenue that will flourish in a digital age.

Looking forward to the brave new world of television, streaming to viewers everywhere.

Warmest Regards,
Scott Barrow