Lots of stuff recently about the demise of TV, with half the commentary saying TV will suffer because of new sets with internet access, thereby offering global channel choice with no subscription, and the other half saying how Murdoch and co will start to charge for news sites, and make it much harder to get content for free.
I think Murdoch overestimates his influence on today's market. He certainly knows how to earn money from traditional markets, and is no dinosaur, but was very slow indeed to capitalise on the net, and I really don't think he understands it. His venture into social networking was poorly implemented for example. His papers offer free sites, and the loss of sales of his papers cause him to think he should now charge for his sites. He can try, but people will not pay. I won't pay. I buy some of his papers most days, but I will not pay for his web content. If I stop reading his papers and get everything on-line, I still won't pay for it. There is simply far too much competition online, far too many of us willing to give stuff for free, and much of the free stuff compares well with professional stuff. The analysts have blogs, and I'll go direct.
However, many news-pros are very good, and they will stay good. The business model might have to change, but I won't pay directly for on-line content. Advertising revenue is supposedly limited, but there are lots of ways to skin a cat, and empires can crumble as fast as they can be built, so I expect some re-organisation and re-distribution of net-based wealth. Re-invention of business models will happen, and there will be winners and losers. I think Murdoch and the rest of the current content industry moguls will lose out, and new players will take a lot of the money available.
But it is not as simple as some analysts seem to think. Youtube and other amateur content sites can't offer the same quality as professionally manufactured material. No-one wants to watch or listen only to amateur content. We need professional content manufacture, both for music and video, much more so for video I think. There are loads of good bands out there that can produce music in styles I want, and will be content to do so for free as a loss leader, expecting ticket and merchandise sales at their concerts to provide income. So maybe the music industry can go largely in that direction. For video, even though cameras are cheap and powerful, and editing software is getting better every month, there is far more to making a compelling programme than owning a camera. Professional quality material is hard to make, and I think it will stay professional. I don't know what the business models will be, but at least most of us will still pay for video, even if lots of people get it for free. Video distribution can be controlled, and there is less potential for substitution than with other media.
I suspect that advertising will pay a lot of the costs. Product placement, interactivity, embedded marketing, convergence with games and shopping, virtuality and overlaying, all these can be used to extract full potential. As to how much of each and the details, I'll leave that to entrepreneurs to find out, not my field.
I also think there is still a healthy market for braodcast TV. At the end of a busy day, many of us just want to veg out on the sofa with a beer and relax. I don't want to spend all evening thinking about what I want to watch, I am happy to pay to outsource that to a bunch of broadcast channel editors. This is further evidence that Murdoch doesn't really get it. I pay for Sky, but I value it far less overall than the four original channels, because they do the channel editing well, and Sky doesn't. Simple as that. All the hundreds of satellite channels provide less than half my viewing time. So I don't mind paying a license fee and fast forwarding over the ITV ads, it is still better and cheaper than Sky.
So, winners and losers? Broadcast TV will survive, but I think Sky will be affected much more by global choice via the internet, because it doesn't have the quality anchorage of the original four UK channels. I think the big music companies will suffer because bands can go to customer direct, but the bands will still stay in business. The music industry will thrive, but many of the existing big players will die.
Labels: future TV and music