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May 26, 2010
The standard account of the effect of the shift to digital media is that newspapers are having a hard time adjusting to declining revenues and circulation, reduced profits, shrinking resources and people moving from the printed page to networked screen. The iPad will not to save the newspapers by offseting the revenue decline of their print businesses.
Yet this is only part of the media story. The next turbulence is not switching off of all the old analogue broadcast signals; nor the existence of a catch up facility along side a broadcast service. It is the emergence of IPTV or Internet Protocol Television. IPTV enables programming to be delivered over a fast Internet connection (courtesy of the national broadband network) to a set-top box plugged into a digital television screen in the living room.
Broadband providers (eg., Internode, Telstra and iiNet) are beginning to move with increasing speed toward installing the IPTV equipment to ensure they are the comprehensive communications provider for each home they serve. Their aim is to provide video, audio, Internet and telephone service to every home with a single fat pipe – and for a single fat monthly bill.
This is disruptive technology because it offers an alternative to Pay-TV of Foxtel and it furthers the segmentation of the mass market into niches. Even though niche content appeals only to a limited subset of an audience (the long tail content), market fragmentation deprives national broadcasters of the mass market that enabled the high ad rates and the fat profits. This undermines traditional broadcast model of the commercial free-to-air media as it depends on assembling large audiences to view regularly scheduled programs.
The scenario is similar to the one newspapers have faced: as revenues recede and profit margins decline so most local broadcasters will reduce the resources they devote to covering local news. There will be a contraction in local news and the content of local TV news will become even thinner than it is today.
The Australian TV landscape is going to change. Sure IPTV today is not viewed as a successful model, the content is not there, and the market is still waiting for it to develop its business model. At the moment we have video content on the personal computer not the television whilst the internet connectivity behind the TV is rare. The big probem for IPTV providers is to create a critical mass of content which challenges that available on the open internet because ‘I don’t pay for it on my PC so why should I pay on my TV?
I suspect that there will the emergence of IPTV Freeview from the ABC with its main stream content; initially in the form of an Electronic Program Guide (EPG) that displays broadcast content schedule two weeks ahead and catch-up content one week behind for all the ABC channels.
Movie content then becomes available with film aggregators like Quickflix, and as our viewing habits change from broadcast to on-demand, we consumers demand the open browser tools (one that handles all video formats and display technologies) to discover the choice of internet-based video content themselves without gate keeping or a walled garden.
The upshot is that the broadcast ‘viewer’ model no longer cuts it in this time-poor, choice-rich world that we live in.
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our household is happy with just a free-to-air broadcast service with a catch-up facility (Iview) alongside.
I see that the ABC is also offering interactive internet drama with Bluebird