A few years ago, I attended a conference that focused on the convergence of technology and entertainment. During one session in particular, 5 executives from various cable and broadcast networks debated the place and benefit of the Internet as a complete delivery method of their content, live and on-demand.
Everyone on that stage was largely against doing anything that might disrupt the traditional content delivery model and partnership that has been immensely profitable for decades.
Flash-forward to today…online content delivery and resources have improved dramatically for cable and satellite subscribers, yet there are key barriers facing so-called “cord cutters”.
For example, in the United States, the big three broadcast networks: ABC, CBS and NBC allow access to their content through various mediums and devices. Mobile phones, tablets, PCs, and Internet-connected devices (Apple TV, Roku, Vudu, Boxee, etc) can easily access nearly any TV episode over cellular or WIFI.
But, if you’ve cut cable completely and rely upon online streaming, you typically must wait until “tomorrow” to enjoy “tonight’s” episodes. In an era where consumers want to enjoy content, when and where they choose, this minor inconvenience inspires tech-savvy consumers to develop alternate means of accessing content.
Enter Aereo…“Watch Real, Live TV on the Internet. Finally.”
Now, I don’t want to debate the pros and cons of Aereo, but rather highlight what could become a watershed moment for the entertainment industry. I “cut the cable” two years ago, and haven’t missed a show that I’ve wanted to watch, except live local sports (ugh!).
Perhaps in the future I will be able to turn on my Internet-connected device, select the ABC (or CBS…NBC…ESPN…etc) app, and with a single click access to both live and previously recorded content. Seamlessly.
Internet-connected boxes, such as Apple TV, are beginning to see robust and sustained growth, which begs the question, is there a place for another distribution model?
- Over-the-Air (OTA)
In the U.S., there are more than 115 million paid TV households (not people), and a staggering 500 million iTunes users (with active credit cards). These are huge markets! With these total in mind, imagine if ABC (or any of the other players) offered its full catalogue on-demand, as well as their live broadcast stream for $7.99 per month (Hulu Premium’s pricing). If they secured 29 million customers, or just 6% of the active credit card users on iTunes…ABC could generate an additional $232 million per month in fees, and $2.8 billion per year.
Remember, these figures are general in nature, but nevertheless they paint an intriguing picture regarding the revenue potential of diversifying content distribution to include, full-fledged streaming.
What do you think?
P.S. Take a look at how Netflix and BYUtv are addressing this market: