March 26, 2010

Internet TV is on its way, broadband plan or no

Last week, the FCC unveiled its National Broadband Plan and it gained a lot of support instantly — including a New York Times editorial calling for its quick adoption — but it also spawned a round of thinking ahead to the future of media.

One conclusion, nicely highlighted in an article in the Atlantic by Max Fisher, is that Internet TV is coming, regardless of what happens to the National Broadband Plan. Any digital strategies being created now must keep this in mind, or risk being obsolete as soon as that future starts taking shape.

Fisher posits in the Atlantic article that cable TV is doomed because it is built on a bad business model: consumers pay for cable access, at prices that keep climbing steeply, and still have to pay again by watching advertisements. While consumers pay for Internet access as well, the costs are lower and so many are paying it already, in addition to cable TV.

The hurdles to Internet TV have been poor video quality and a lack of programming.  But as the networks have gotten used to the idea of streaming shows, the programming supply has grown quickly and will continue to do so because networks are motivated by self-preservation. Technology is also improving video quality, which will get another boost if the National Broadband Plan kicks in and increases available bandwidth.

Sports have lagged furthest behind in the Internet streaming world because live action suffers most when video quality is poor. Eventually, though, sports will have to adapt to the changing expectations of the consumer. Part of CBS’s rationale for streaming NCAA tournament games is to placate customers who are no longer content to watch the games in network format, that is, with CBS dictating which games to show and when. People who want to watch entire games of their choosing (a very modern expectation) can now do so online.

As Fisher writes, Internet TV will eventually be a boon to networks, which will be freed from having to fill 24 hours with expensive programming. They could operate more like movie studios, producing only what they want to produce and what makes them money. It will also open up avenues for independent TV producers, broadening the choice of what to watch. Journalistic outlets that choose to could also compete with the network news offerings. You could be watching National Public Radio’s online news, or a show from the New York Times or Wall Street Journal.  

Sports properties, particularly ones that struggle to crack the big-network stranglehold, could find themselves with new opportunities to reach and grow their fan bases via Internet TV. But that will happen only if they start planning on how to exploit this brave new world. 

Cable TV is doomed {The Atlantic}

A Plan for Broadband {The New York Times}

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