By Hudson Millar | 28 November 2012
Supporting Articles:
Summary: Three brochures from Research Markets
Summary: “The Video Stream Rises”
Summary: “For Sony, an end to the idiot box”
Opposing Articles:
Summary: “Online TV: Competitor or Complement to Traditional TV?”
Summary: “Online Defeats TV!”
Summary: “Cutting the cable: pay TV subscribers turn to Internet”
Radio broadcast television, both terrestrial and satellite transmission, suffers one unalterable flaw, this being that it is unidirectional. The effect of this flaw is that radio broadcast television is now and forever determined into scheduled programming. This means that for the viewership it is necessary for them to schedule their own lives in order to watch what they want, rather than to obtain this media on-demand at their leisure. Another important negative side effect of unidirectional broadcast, is that collecting data on the habits of television audiences is difficult, and not a particularly accurate process. In comparison, Internet media is bidirectional, making both on-demand programming and audience profiling easy and possible. It is because of these two factors that this hypothesis has been proposed, which states that, “radio broadcast television will eventually be replaced by Internet Streaming Media”.
Even though television has been handicapped because of its unidirectional flow of information, to compensate, multiple non internet solutions have been deployed. The video cassette recorder (VCR) and more recently the digital video recorder are used to provide the user freedom from a linear time schedule, allowing them to watch a scheduled programme at a later time. Both types of recorders suffer from the limitation of recording only one programme at a time and both require the viewer to be organised in pre programming and providing the storage media. Another burden on the user is in finding and playing recorded material. The digital video recorder has fixed this problem to some degree, by automatically naming programmes and providing a menu for direct play. Even so if the user is not organised or made an error setting up the recorder, there is no recovery and the programme is not able to be watched.
Solutions for identifying and monitoring audiences is also somewhat lacking. Gone are the days in New Zealand when television license debt collectors combed the streets looking for TV aerials on the roofs of non paying citizens; this license is now paid through tax money. Sky Television solved this problem by encrypting the television signal and providing keys only to paying audiences. One method deployed for monitoring audience habits is through the use of People Meters. Since there is a limited distribution of these they only provide a small sample of the audience response. In the end of the day, advertisers work with this small sample set and blindly blast advertising out to the entire audience, in the hope of finding potential customers.
To form this hypothesis, it was necessary to first identify through this previous discussion, the best solutions offered in dealing with the limitation of unidirectional broadcast. If these solutions were sufficient in meeting these two limitations, radio broadcast would likely remain. By not being meet this creates two forces that will bring about change, the audience who decides what to watch and the advertiser who pays for the media.
From the data collected by Research Markets, the audience is directing change. From their online reports they are saying that “45.3 million individuals will pay to access OTT internet television programing in 2012”. They are also forecasting that, “by 2016 the number of individuals who pay to access OTT internet TV programming will have increased to 352.4 million” (Generator Research Limited, Aug. 2012, p.310). Further to this report they also forecast that by 2016 there will be “480 million Smart TVs deployed across the globe, all of which connected to the internet - plus around 100 million more that will be connected by other devices, such as games consoles, Blu-ray players and dedicated boxes” (Generator Research Limited, Feb. 2012, p.290). On a third report they concluded that the audience were, “not aware of or interested in how their content is delivered [...] We are now entering the Internet era of TV whereby users can expect an increasingly on-demand and personal viewing experience” (Scripp Business Insights, Aug 2011, p.207).
From the trade journal Searcher (Oppenheim, Oct 2012) the audience are also having their say in regards to physical media. There is a trend away from this to online media. From an IHS report that Oppenheim cited, this year in the U.S.A. “it estimates that 3.4 billion movies will be watched online compared with 2.4 billion watched on physical media” (Cryan, 2012). Oppenheim's report also cited a Gartner Press Release that reported Consumers will spend $2.1 trillion worldwide on digital information and entertainment products and services in 2012 (Stamford, Jul 2012). This report by Oppenheim suggests the audience has a desire for instant gratification desire in regards to media, and they are willing to pay to satisfy this desire.
Another indication of a shift in the audience's habits can be identified in the products that they purchase. An article by Navneet Alang in Canadian Business Network reported on Sony's failure in television manufacturing. Alang stated that “Netflix and other content services threaten to turn the TV into simply one screen among many” and he also said that, “television has to be the linchpin that arranges those errant strands into a coherent universe of hardware, software and content” (Alang, Dec 2011). Alang predicts that viewing audiences will increasingly want an interactive experience of media.
Stephanie Sutton, reporting in Business Wire, is not so convinced that the Internet will be the demise of traditional television, as the data shows people still watch TV. She suggests that television audiences are “looking for a broader mix of options to consume television content”. This broader mix she describes as “catching up on missed episodes and being able to watch whenever, whatever” (Sutton, Nov 2011). This belief is supported only in that; people are still getting by with existing television, there is still an older traditional television audience, not everyone has the Internet, the Internet is still bandwidth impaired and the technology of online television is still in its infancy. James Poniewozik, in a Time article on comparing TV with online streaming, describes TV as having a clearer image without “buffering, pixelation, freezing or crashing” (Poniewozik, Aug 2012). In time all these shortcomings will disappear, but what will not change are the limitations brought about by unidirectional transmission.
Mark Friedman, writing in Arkansas Business, suggests that this trend towards online services is driven by the comparative cost of cable TV. In quoting Bill Fisher, “people come back to the utility for cable because of the price, which can be as low as $14.30 a month for the basic package of 24 channels, and its service.” Even with this trend the cost of online services are still cheaper, for example the Hulu Plus plan over the Internet is US$7.99 a month. (Friedman, Jul 2012). Friedman also sees a trend towards television on mobile devices, something the pay TV providers are addressing through their own new hardware devices, (Friedman, Jul 2012). This move by Pay TV providers reinforces this idea that the audience want this mobile convenience.
The Internet is going to continue to shape the way the world interacts with media. In some ways it is not unlike TV in that its media is largely funded through advertising, but unlike TV, the internet being a two way connection, makes it easy for advertisers to track users and create advertisements to suit. The internet satisfies an audience who desire instant media gratification on whatever device they choose, and they can get this without the need to programme video recorders. Even if they like scheduled TV programming, this will still exist in the way of live streaming. The hypothesis as to whether television will go online seems inevitable, but in what way this will happen and when is not so certain.
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