Guest Commentary: Broadband Paves Way for Broader Web Media Use

May 28, 2007  •  Post A Comment

The unmistakable influence of broadband has changed the landscape of video programming for media entities across the board, from established companies wishing to exploit the power of this new medium to new participants seeing opportunities to overcome their lack of a video heritage.
With the old rules of linear video suddenly cast aside, cable and broadcast television networks face common concerns: how to capitalize on the Web media experience without cannibalizing existing television viewership and ad revenue, and how to maintain their edge over Web upstarts that are threatening to grab market share from the incumbent programmers.
It’s an interesting position, particularly for cable TV networks that originally succeeded by standing traditional broadcast television on its ear. Recall that 40 years ago, as cable wired much of the country, operators and entrepreneurs created new networks to stock MSOs’ “shelf space” and fill programming voids left by broadcast. Those same networks-now recognizable brands-face a new competitive threat in an open broadband delivery platform that creates at least three points of disruption for cable TV networks.
First, broadband is allowing established media companies (e.g., newspapers, magazines, broadcasters, etc.) to leverage their sizable audiences, well-known brand names and content development skills to branch into the video business. Second, broadband is allowing new market entrants such as independent producers and even users to create and deliver video to audiences. Finally, it is enabling new broadband-centric distributors to create value propositions based on new features and benefits, thereby rearranging the balance of power between participants in the value chain.
Identifying the emerging broadband competitors for many of today’s cable channels is a simple task. For CNN, it is no longer just Fox News, MSNBC and network news shows, but also new video producers such as NYTimes.com and Yahoo! News. CNBC now needs to cast a wary eye at new competitors such as WSJ.com, Forbes.com and TheStreet.com. For Lifetime, it’s no longer just Oxygen, but also iVillage, AlphaMom and MomMeTV.
These new programmers pose the same threat to cable TV networks as cable programmers once did to broadcast, with one important difference: There is literally no physical limitation (i.e., number of actual channels that can be carried) with broadband delivery. As a result, the traditional model of closed and scarce video distribution is giving way to an open, abundant video distribution model.
While cable networks have responded with their own Web properties, those initiatives do not ensure continued success. Will driving a viewer to his or her computer, ostensibly to engage more deeply with the network’s brand, ultimately be a successful strategy? Or does it heighten the risk that the viewer, once online, will be easily distracted and click away to other online destinations? And even if the viewer does remain engaged with the cable network brand on the PC, does this produce incremental revenue to the network’s on-air revenue, or does it simply substitute one revenue stream for another?
In the “battle for the last 10 feet” to reach the living-room TV, the answers are not clear-cut. With alternative devices for the reception of broadband-delivered, high-quality programming becoming ever more abundant, programmers and operators need to move resolutely to maintain their dominant position in the video universe. Each successful installation of Apple TV or a Vista Media Center PC reduces the value of traditional video packages by allowing viewers to pick and choose which TV programs and movies they would like to receive.
Rather than risk viewer and revenue erosion, cable networks would benefit from delivering their broadband video initiatives directly to the TV in partnership with their current cable distributors. Platforms that bring the Web media experience to television are in early deployment in the United States and abroad. Using these advances, programmers can create an immersive environment using the “pole position” of their linear channels to steer viewers to Web-driven channels and advertising showcases navigated via remote controls instead of keyboards.
In partnership with cable operators-whose own business models are under attack from “over-the-top” broadband video-programmers can drive familiar and trusted brands deeper into viewers’ lives. By leveraging operators’ existing video delivery infrastructure, programmers can ensure that their broadband channels reach the largest viewing audience, on TV, with TV quality and responsiveness.
To be sure, traditional programmers continue to maintain leadership positions in the TV landscape. Yet the current explosion of broadband video-with its open distribution model-is creating myriad new competitors to today’s cable networks. While viewership of many of these initiatives is still limited to the computer, new technologies and devices suggest that will soon change, making TV-based access easy and affordable. Programmers would be wise to work with their operator partners to bring Web media directly to the television-before history repeats itself.
Jeff Miller is president-CEO of ICTV Inc., which provides a technology and distribution network that enables delivery of broadband video and other media to the TV set.


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