TV is being disrupted, too — stay tuned

Back when I was working on the Newspaper Next project, around 2006, I had one of my infrequent exchanges with Ava Ehrlich, a former J-school classmate at Northwestern. She’s been working in TV for years in St. Louis.

When I described the work I was doing in the N2 project, there was a note of condolence in her response. Newspapers were becoming obsolete, she said, and she was so glad she was working in an industry that was a “rocket ship” with a bright future.

I told her I didn’t think she should be so sure — that television would eventually experience the same kind of disruption from digital competitors that was rocking the newspaper industry. It seemed obvious from the Clayton Christensen disruption theories on which Newspaper Next was based; the only question was when.

The why became clearer to me last year, when I was working on the “infinite pipe” theory I explained in an earlier post. As we go from a tiny information pipe to an infinite pipe, the mass media business model — print and broadcast alike — is certain to be severely eroded. But available bandwidth will determine how fast it happens.

The reason newspapers and yellow pages got hit first, when bandwidth was limited, was that it didn’t take a lot of bits to replicate print content — articles, photos, advertising, listings. For years, most households have had more than enough Internet speed to handle everything a newspaper or phone book could contain.

Radio (audio) takes more bandwidth, and television (video) much more, so their disruptions have been relatively mild so far.

But household connection speeds continue to rise steadily. Akamai reports that more than 80 percent of U.S. households now have at least nominal broadband connections, with speeds across the country now averaging in excess of 6 mbps. The top 10 states are now reaching average speeds near or above 10 mbps, with YOY increases ranging from 9.2 percent to 54 percent.

So there’s now plenty of bandwidth available in many U.S. households to deliver video at an acceptable quality level. And the effects are now discernible in a number of metrics.

This week, Henry Blodgett at BusinessInsider.com published a blog titled “For Whom the Bell Tolls? It Tolls for TV…” that does an awesome job of describing the current state of play. It is replete with charts and graphs showing what very well could be the measurable beginning of the TV disruption.

He concludes it with this summary.

The bottom line is this:

  1. Traditional TV viewership is changing.
  2. None of the changes are good for the traditional TV industry.
  3. Someday, if attention keeps shifting, the money will follow.

Blodgett cites many disruption factors that are already measurably at work, including web-sourced alternative programming, time-shifting via DVRs and websites like Hulu.com, and the large number of young people whose TV sets are not connected to cable.  (My two sons, both in their 20s, have no cable connections; their TVs are strictly for gaming and Internet-sourced content.)

But large-scale disruption of the television business model is likely to come only as more and more TV sets are connected to the Internet. When the full range of Web content is available on the big screen, at good levels of resolution and with easy-to-use interfaces, the disruption will rise from a buzz to a roar.

However, I’ve been amazed at how long this is taking. Five years ago, I was sure that most households would have their TVs seamlessly connected to the Web by now; I thought it would be a functionality available in most TV sets. But most of us still don’t have sets like that, including me.

Most people who connect their sets to the Internet these days are using interface devices like the Apple TV, D-Link Boxee Box, Logitech Revue , and Roku. And the numbers don’t seem to be great enough yet to power a massive disruption of the television business model. Advertisers keep pouring dollars into the medium, despite the fact that the audiences are splintering more and more across a wide range of devices and alternative sources.

So the big disruption isn’t here yet, but it’s building. Believe me, Ava, it’s just a matter of time.

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Posted on October 21, 2012, in Uncategorized. Bookmark the permalink. Leave a comment.

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