I Want My TiVO! Cutting the Cable on Cable Cutting

Tech industry investment money has generated what it wanted – a perception within the TV biz that “old TV” is dying as people cut the cable. And they’ve titled this trend “cable cutting”. (Statistics show it’s still a relatively limited trend so far.)

And with all this hype over the past decade I’ve been bothered by a fundamental logical flaw:

  • Enormous amounts of money are required to develop programming people want to watch (there are a few exceptions – but they don’t translate into a reliable low cost approach).
  • Yet the enthusiasts for cable cutting have made it all about low cost (usually nearly free) subsistence viewing.
  • If no one can afford to develop the programming to satisfy consumers, consumers won’t be satisfied.

In streaming we now see financial reality rear it’s ugly head.

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Cursed by Checkbox Video

You know the videos I mean – the ones made so the agency can check the box “Cool video complete”. (Of course, many of them aren’t very cool – at least to consumers. But we’ll hold off on that discussion.)

Checkbox work has always been a curse. Before it was video (back in the dark ages of the 1970s and 1980s) it was the checkbox slide show. When I was a client shopping for supercomputers in the 1980s aerospace business, if the salesman brought the slide show or video I’d skip the meeting. My team had learned that these checkbox presentations never communicated what mattered as we evaluated computers.

That was then and this is now. And what used to be merely dull and boring has exploded in that way only the web can make things explode… (It’s amazing how fast bad marketing choices replicate across the web.)
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Challenge the Myths of Internet TV with Reality

There’s huge money to be made, apparently, for consultants who project radical future change. In TV, that means suggesting TV becomes a variant of online video. (Really? We need better produced cat videos?)

But the rest of us have to earn our money based on reality. And lately there have been some interesting truths to help anchor TVs future in reality.

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Setting Reasonable Expectations for Online Video Power

New media has found one more shiny new bauble – this time it’s online video. Let the exaggerations and over-statement begin! (Oh, wait, they have…)

Don’t get me wrong – I’m a video enthusiast. And our work ranges from TV spots for Kobalt brand tools from Lowe’s to 1/2 hour infomercials, web videos, in-store videos, and video send by direct mail.

But I think that gives me a reasonable position to suggest we shouldn’t sell online video services by dramatically exaggerating their potential impact. Read more of this post

Cable Cutting & Self Righteous Attacks on TV

I get pretty miffed when the “cable cutter” enthusiasts try to argue that online video will drag society out of the depths of depravity found in TV programming.

After all, what are most teens watching online? You can bet it’s NOT Masterpiece Theater or Nature. More likely they’re watching video’s of guys becoming eunuch’s when skateboard tricks land them on handrails.

This attack in TV is nothing new. I remember making it a few times in youthful enthusiasm while in college. Still, proponents of new media too often sound like sci-fi books — promising a “glorious future” where the internet changes mankind. (They are, of course, merely the latest to claim to remake humanity in thousands of years of such movements.) Read more of this post

iPad 14 – Electronic Magazines Prove (once again) That Content Trumps Bells & Whistles

Here’s an important tech axiom: Developers have far more interest in applying application bells and whistles than people have in using them.

I learned this lesson on my first project out of college. In that project I designed a network of Apple 2’s to display wire wrap harness instructions for avionics assembly at General Dynamics. (Back then I was a software engineer with a couple of degrees in mathematics.) Read more of this post

GoogleTV: “More Returns than Sales” (Logitech)

I was skeptical of GoogleTV. It seemed Google fell prey to corporate hubris – believing they could build anything and make the marketplace think it’s valuable.

And from the start Google revealed they had no coherent strategy to deliver value to consumers. Instead, announcements made it clear they were in a desperate ploy to steal ad revenue away from traditional TV. Read more of this post

More Confirmation of Traditional TV’s Advertising Strength

The “radicals” who envision an internet take-over of the entire advertising world have been telling us for years that TV was dying. But not only won’t it die — it just keeps getting better.

The radicals loved the idea of TiVo killing off all TV advertising. So we heard about it – endlessly. As a result, advertising agencies exerted tremendous angst re-structuring their lives without TV. And then, after more than a decade, it turns out TiVo has made TV advertising even more effective. (Link here.) Read more of this post

Larry King. A TV Endorsement Sell Out?

Watching TV last week, my family was surprised to see an ad come up with Larry King in what looks like an interview format with an 800# underneath. Surprise turned to gasps of horror as it became clear he was hawking BreathGemz. Sadly neither King nor BreathGemz come out winners.

The problem for Larry isn’t that he took money to endorse a product – there’s a thousand ways he could succeed in a endorsement that would leverage his credibility without hurting it – even in direct response television (DRTV). But here he sold his credibility in a hack execution of the spot – complete with microphone so we don’t forget who he is and his young wife sitting limply beside him. (I only identified his wife later because it wasn’t the least bit clear in a real world experience watching the spot.) Read more of this post

Research Proves Netflix is the Internet Hawg. What Will the Angry Birds Do?

A recent report looks at all Internet bandwidth (upstream and downstream) and concludes that Netflix is now the single biggest consumer of bandwidth. (Report here.)

And so it begins.

What begins? That’s the big question. Fundamentally, the Internet universe we have come to know and love is threatened by the onslaught of movies online.

For example, in my neighborhood we can tell when our neighbors start watching movies – because our bandwidth slows down dramatically. And, talking with folks, it’s a pretty universal experience to lose Internet speed on Friday afternoon/evenings as well as weekend evenings.

Does this mean an apocalyptic Internet disaster? Probably not. But it looks like Netflix has stolen the internet eggs that we’d like to use for other things. And, from what I can see, the consumer, the movie business and the Internet business are all unprepared for the havoc Netflix is wreaking.

Netflix’s Loophole. I’m told that Netflix dominance is made possible in large part by a short term loophole. Right now, high speed Internet relies heavily on past investment in infrastructure that contributed to the dot com crash, then was bought for a song and expanded in the past decade. My guess is that this means that the current equation (you get all the movies you want to watch for under $10) isn’t likely to last.

So Netflix is using a type of bait and switch tactic: hook us with low prices and it sure looks like they’ll have to switch to high fees later. All this made possible because they don’t have to pay for the bandwidth they’re using today. The result will be that we end up paying more for Internet delivered entertainment than we ever have for cable.

There is an alternative outcome. Comcast (and other cable operators) seem to be the Timex watches of the entertainment business. Nothing exciting. Nothing particularly motivating. But they take a licking and keep on ticking. So in truth, Comcast may dominate and Netflix could be forced out of the picture.

I never believe companies who claim they have suspended fundamental economic truths. And Netflix’s statements about bandwidth lack economic truth. Fortunately we were reminded recently that economic laws can’t be broken when Blippy had to return to a sane business model.

So let’s hope that sanity comes back to the discussion of TV over Internet. Because right now it’s stuck in an imaginary economic universe where bandwidth performance is free.

And lets hope some of those angry birds get their eggs back so we don’t move back in time and end up with the neighborhood equivalent of dial-up because the Hawg stole the bandwidth.

Copyright 2011 – Doug Garnett – All Rights Reserved