Television Could Be Headed In The Same Direction As Newspapers

    June 16, 2009

We have chronicled the slow death of the newspaper industry for a while now. First, there was the thought that maybe the Internet could displace newspapers with the delivery of content in a more timely and personalized manner. Newspapers decided that they were doing just fine and that they were moving into the digital world in a way that could help them maintain their content delivery fiefdom with no problems. Now, we see a landscape of wreckage where some of the most venerable names in newspaper including the Boston Globe are losing value both monetarily and in reputation. It’s been painful to watch but now there is even more carnage predicted as a result of the Internet age.

Henry Blodget penned a column over at Ad Age that can be summed up neatly in its headline “Sorry, There’s No Way to Save the TV Business; It Should Take Its Cues From What Happened to Newspapers”.

The traditional TV industry — cable companies, networks and broadcasters — is where the newspaper industry was about five years ago: in denial.

If this is even half true the folks on the TV side of the ledger better wake up and smell the erosion. The erosion of their leverage, profits and influence is taking place but it is believed that the arrogance that led to the dismantling of the newspaper industry is just as active in the TV world.

Specifically, the TV industry’s attitude is the same as the newspaper industry’s attitude was circa 2002 to 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!

Blodget posits that the Internet still represents such a small percentage of profits and revenue of TV today but as it continues to grow the tide will quickly turn. As a result, the traditional broadcast industry will buckle and eventually crumble under the weight of its own in cost structure. Sounds painful.

So why is TV still successful? The old model may still have some legs but it is certainly aging out fast. Less and less people are dependent on TV of their information and entertainment. A quick comparison shows the following:

Television Depends On

  1. Few options at home other than TV
  2. No way to get video content other than TV
  3. Only broadcast, cable and satellite options to get TV content
  4. Choke points for delivery give inordinate control to those who own the access points

Reality Is

  1. More and more simple fun options including games, Internet, social media etc.
  2. New ways to get traditional TV content like Hulu, YouTube, iTunes etc.
  3. More options for video content including telcos and cable companies providing broadband
  4. The Internet is everywhere. You can connect more easily, more often than ever and that will only get better

So how has the TV industry responded?

Thus far, the TV industry has reacted to these changes the way most people would: by trying to port its existing model to the new world and maintain its hold on power and money. This is why we’re getting so many ridiculous, consumer-unfriendly TV solutions

These solutions include, but are not exclusive to, market-based control over what can or can’t be watched, single episode downloads that expire after 24 hours and time shifting of popular shows.

So Blodget’s conclusion is as you may have guessed; TV is headed for the gallows and a slow death from their own ignorance and arrogance.

You won’t have five channels, or 50 channels, or 500 channels. You’ll have millions of channels. You’ll be able to watch anything you want, live or taped. You’ll be able to watch it wherever you want — TV, computer, mobile device. You won’t have to sorry about “slinging” video content around or programming your DVR. You’ll just plug a pipe (internet) into a box (device) and watch.

So all of folks in TV land better take heed. The same day that you reach for your morning paper that no longer exists at your desk in the corporate office could be the same day that your control is handed over your viewers and they leave you for greener pastures. Then what?