Henry Blodget has a piece called “For Whom The Bell Tolls? It Tolls For TV…” that should be read.
For understandable reasons, many TV executives continue to dismiss the digital threat out of hand, pointing out that people still spend 5 hours a day in front of their boob tubes and arguing that the TV habit is so entrenched that satellite-cable-telco-network juggernauts will be able to maintain their chokehold and profits forever.
Such a viewpoint isn’t limited to the domain of some industry executives. Other executives have seen a different future and are trying to prepare for an alternate future.
At some point, just as it has with newspapers, this dwindling attention will be noticed by the folks who pay all those massive TV industry bills–advertisers and consumers.
And many of those advertisers and consumers will stop paying those bills–or at least radically reduce the amount they are paying.
At which point the TV industry as we know it will collapse.
Importantly, what I mean by this is NOT that people will stop watching TV content. They’ll keep watching it–some of it, anyway–just the way they’re still reading newspaper content. They’ll just get the TV content they watch in different ways (Netflix, iTunes, YouTube, Hulu). And, unlike today, they won’t get it in a way that supports the production of vast amounts of excess TV content (100s of channels) and steers humongous profits into the pockets of TV executives and shareholders.
For some time, I have been wondering about the transitional state.
At what point does a broadcaster cease to be a broadcaster from a regulatory perspective? If a content provider doesn’t broadcast over the air using public airwaves, what makes them a broadcaster subject to licensing?
At what point does a broadcast distribution undertaking (“BDU”) cease to be a BDU from a regulatory perspective? If a content delivery company uses standard public internet or even a VPN within a public internet access service, at what point does it cease to require a license?