BroadbandTV will deliver the a la carte programming nirvana that consumer’s desire, and it will do so at the subscription pay TV model’s peril. That’s according to this recent BusinessWeek article, Winning the Broadband TV Game. The authors postulate several theories which suggest that consumers will adopt broadbandTV to gain access to the content model of “give-me-what-I-want-when-I-want-it,” and reject the current model of “take-what-we-offer-you.” They also suggest that 40% of U.S. consumers will have some way of connecting their TV displays directly or indirectly to the Internet within 3 years. By five years, that number will grow to 70% and represent a true mass market. The tipping point is well on its way because televisions are now shipping with Ethernet ports and broadbandTV enabled gaming consoles will be in one third of all U.S. TV households by 2010. The implications suggest that cable, DBS, and telcoTV providers are in trouble. “The barriers that have long inhibited Internet-based TV are beginning to crumble. The TV manufacturers will win; the gaming companies will win; the best new platforms blending personalized and branded content will win; Hollywood will win; and consumers will win. And, unless they find ways to adapt very quickly, telecoms and cable companies will lose.”
To be fair, the BusinessWeek article is authored by Herve Utheza and Gary Morgenthaler, both of whom are heavily invested in the broadbandTV space. But they bring up some interesting issues. The reality of broadbandTV today is it’s simply too complicated for average consumers to install, find, and watch content consistently. Should those barriers be lowered through things like broadbandTV enabled set-top-boxes, game consoles, and even the televisions themselves, the story could change. If broadbandTV does truly become plug and play, we may very well see some Utheza and Morganthaler broadbandTV predictions come true. Cable and telcoTV providers may be challenged to adapt their business and revenue models to ensure they don’t concede their subscription TV business to the burgeoning broadbandTV ecosystem. DBS may feel the broadbandTV pinch more, because they don’t have broadband connections to the home, making a broadbandTV strategy somewhat more complicated for them.