every important program or episode.
A
Bluetooth-like signal on my cell phone triggers the logon for
my media center system. When ready to watch TV, I am greeted with a
mosaic screen with tiles of favorite TV channels, suggested
programs from the last 24 hours, season’s passes and tailored on
demand choices.
My home network offers different on demand pricing
packages, dependent on the number of times I plan to
watch, copy or download – and whether the content is a preview.
When not skipping through, I am more amused than ever by
advertising, particularly since it is tailored for me and comes
with relevant links, add-ons and a variety of purchase options
within the commercial itself.
...”
The above is an excerpt from a newly published
research report from IBM entitled: '
The
end of TV as we know it: A future industry perspective'.
IBM conducted more than 65 one-hour interviews with “C-level” and
senior industry executives, Wall Street analysts, economists and
technology visionaries inside and outside IBM with the goal of
analyzing and distilling a report focusing on future television
fruition scenarios as our marketplaces may have developed by 2012.
Further, IBM commissioned primary research by the
Economist Intelligence Unit (EIU). The
EIU surveyed 108 industry executives from three
constituencies:
1)
cable, broadcast and Pay TV networks,
2)
multiple system operators (MSO) and direct
broadcast satellite (DBS) providers, and
3)
new entrant video telecommunications
companies.
Respondents were evenly split among three geographical regions:
Europe, Asia and North America.
Here is the original summary from this
27-pages-long IBM Value Study report:
Television has an inspiring past, ripe with
innovation and popular culture influence. Since its coming of age
mid-20th century, generations of TV viewers happily embraced their
broadcast experience. For the industry, making a connection with
consumers was a pretty straightforward, one-to-many
experience...until recently.
Today, audiences are becoming increasingly fragmented, splicing
their time among myriad media choices, channels and
platforms.
For the last few decades, consumers have migrated
to more specialized, niche content via cable and multichannel
offerings. Now, with the growing availability of on-demand,
self-programming and search features, some experiencers are moving
beyond niche to individualized viewing.
With increasing competition from convergence players in TV,
telecommunications and the Internet, the industry is confronting
unparalleled complexity, dynamic change and pressure to
innovate.
To hone our point-of-view of the mid-term future circa 2012, from
both a demand and supply perspective, IBM conducted extensive
industry interviews across the value chain and commissioned
Economist Intelligence Unit (EIU)
primary research in the U.S., Europe and Asia.
Our analysis indicates that market evolution hinges on two
key market drivers:
a)
openness of access channels and
b)
levels of consumer involvement with
media.
For the next 5-7 years, there will be change on
both fronts – but not uniformly. The industry instead will be
stamped
by consumer bimodality, a coexistence of
two types of users with disparate channel requirements. While one
consumer segment remains passive in the living room, the other will
force radical change in business models in a search for anytime,
anywhere content through multiple channels.
The tech- and fashion-forward consumer segment will lead us to a
world of platform-agnostic content, fluid mobility of media
experiences, individualized pricing schemes and an end to the
traditional concept of release windows.
Figure 1 illustrates the behavioral differences that will lead to
the 'Generational Chasm' between the passive mass audience
('Massive Passives') and leading-edge users (divided into two
sub-groups: 'Gadgetiers' and 'Kool Kids').
Given the influence of both segments in the 2012
forecast period, strategists must today work amid fragmentation,
divergence and opposition in the market: to optimize across nascent
and long-standing business models; across new and traditional
release windows; with old and new content programmers; and with
both IP and traditional supply chains.
This is the beginning of 'the end of television as we
know it' and the future will only favor those who
prepare today.
IBM offers six executive recommendations to get
started:
- Segment: Invest in divergent strategies and
supply chains for bimodal consumer types. Identify, develop and
continually refine data-driven user profiles in order to optimize
product and service development, distribution, marketing messaging,
and service migration. Tailor content, advertising, pricing and
reach dynamically.
- Innovate: Innovate business and pricing models
by creating – not resisting – wider consumer choice with windows,
bundles, pricing and distribution. Take risks today to avoid losing
position long-term.
- Experiment: Develop, trial, refine, roll-out.
Repeat. Conduct ongoing market experiments alone and with partners
to study 'real life' consumer preferences. Invest in new
measurement systems and metrics for the on demand world of
tomorrow.
- Mobilize: Create seamless content mobility for
users that require on-the-go experiences. Ensure easy
synchronization across devices and without user intervention.
- Open: Drive open content delivery platforms to
optimize content and revenue exploitation, and to create optimum
business flexibility and network cost-efficiency. Position open
capabilities to bolster digital content protection with consumer
flexibility, and for plug-and-play business upgrades necessary in
the fast-changing marketplace.
- Re-organize: Assess business assets against
future requirements. Identify core competencies needed for future
competitive advantage. Isolate non-core business components for
outsourcing or partnership. From an external perspective,
reconfigure business to exploit market and financial levers to buy,
build or team to future competitiveness.
Read the full research report (PDF - 341 KB / 27
pages)
