Image via WikipediaMuch has been made of the changing entertainment habits of people in the age of the internet, but most of it focused on the effect of internet distribution on the people who create the content and the people who program it. I've been thinking a lot lately of the effect it's going to have on the companies that provide the last leg of the journey to the consumer: The Cable Company.
I work for a cable company (or MSO (Multi Service Operator) as they refer to themselves) in the Engineering department and I focus on software engineering for tools that measure the health of our HFC (Hybrid Fiber Cable) network. Every new service we deploy and every product we launch for our customers affects our tools development. Every tool that's used by customer care, field ops, engineering, planning, strategy, marketing etc... has to get data from my tools.
I read the CTAM (Cable Television Association of America) news digests every day. I see the headlines about Time Warner reporting this trend in customer behavior or Comcast reporting this change in their product lineup to battle AT+T or Verizon in certain markets. In short, I believe I have a good feel for what's going on, but I'm not in the board meetings so I don't have any privileged information that I shouldn't be sharing...
I was thinking the other day about how different the TV experience is for my kids then it was for me growing up. They are growing up on Tivo. They are used to selecting a program from a list and pressing play. It drives them crazy to watch TV at their grandparents because you can't pause or rewind it. When I was a kid, we didn't even have cable. We had the rabbit-ear antenna and we got about 4 stations on a good day. Which programs were on and when they aired was the people at the TV network decided they would be on and they couldn't care less what I had to say about it.
That got me thinking about what "TV" is going to be like for kids born 10 years from now, or even 20. The world of content production and delivery is changing so quickly and so completely that I don't doubt it will be almost un-recognizable. To them, the concept of waiting until 8PM to watch a show will be as ridiculous a concept as houses with no indoor plumbing seem to us now. Indeed, only being able to watch the content that some faceless group of marketing / programming droids has deemed worthy of your attention will also be a ridiculous, outdated notion. (And come to think of it, even having a large box that dominates a whole room in your house is kinda silly too, eh?)
So where does that leave the MSO? People won't need hardware on top of their TV that can tune into to predetermined frequencies to decode digital signals for 357 channels anymore... because there will be 357,783 channels (approximately) to choose from. People won't need the Discovery Channel to produce and distribute content anymore because all those people that Discovery is hiring to produce shows will be producing shows for themselves and delivering them straight to the consumer - without Discovery Channel or the MSO. In fact, add the concept of the Cable Channel to the pile of concepts that will be completely discarded in the next 20 years.
So how will you find content? If it's not laid out in a nice grid in the Sunday paper (remember those days?) or on the Tivo on screen display then how will you find new shows that pique your interest? How will the tens of thousands of independant producers find an audience for their work?
The answer, it seems, is working itself out already. Just as the major record labels are slowly wilting under the heatlamps of social media and the internet age and have ceded your ears, so too will the major TV networks cede control over your eyeballs. You'll find content by seeing what your friends and other people like you are watching. You'll engage the producers of the content directly and have a collaborative role in its direction.
Another dimension of this is explored here by Bijan Sabet in a post about how much the MSO should be paying to the content provider. I think he's spot on. There's no reason my MSO should pay higher and higher fees to ESPN or NBC for content that people increasingly access in other means and is also increasingly sublimated* by other means of production.
But again, what of the MSO? Is it a relic of a soon to be bygone era in communication? With the move of telephony and now video services to an IP backbone (i.e. The Internet) what services will MSOs offer consumers?
1. I believe the majority of the effort the MSOs are going to need to put forth is towards delivering high speed data to the residential premises. All the future "converged" services they are planning depend on the ability to move bits in and out of the home in a dependable way.
2. At some point, one of the larger MSOs is finally going to have the numbers and the will to stand up to the major content providers and demand much lower wholesale prices.
3. Corollary to #1: I think that the MSOs will be in a position to co-host a lot of streaming content from major providers in order to limit their off-network bandwidth costs. Think of it like a CDN internal to the MSOs backbone. I know that ESPN360.com works in much the same way already (which is why not everyone can get to it).
Anyway, I have lots of thoughts on this issue and I'm really looking forward to trying to start a conversation about this both within my MSO and in the community at large. Feel free to comment below (using Disqus) or contact me through my Google Profile or on Twitter.
* I'm not sure that's a valid use of the word "sublimated" but it sounds cool and reminds me of chemistry class... Maybe Zemanta should have a thesaurus built into it :)