Tuesday, September 11, 2007

Video Distribution Wars Heat Up

Great article from MediaPost's Online Video Insider! Worth reading.

The bottom line - many different distribution strategies aimed to reach the user. Is it a zero sum game or can multiple approaches work. Which one does the user embrace and which don't achieve their full potential. The one thing for sure, digital distribution seems to allow for a lower barrier to entry. Own the content and you can decide which distribution plan to embrace!

The Convergence of Devices and Content

Gary Shapiro, the President of the Consumer Electronics Association, spoke recently at the International Broadcast Conference, assuring the broadcasting industry that they are far from dead. As he notes, change is inevitable and the convergence of viewing devices and content, along with the shift in viewing toward more mobility, brings greater opportunity. He points to devices like the iPhone as examples of this convergence, and also to more viewing choices such as wireless phones, computers, and PDAs.

His most interesting note is to proclaim that the broadcaster has the best direct line to the end user and that they "own the highest value spectrum there is," better than cable, satellite, wireless, and web. Interesting, since most customers that still take their broadcast signal over rabbit ears will have to buy a digital antenna, and perhaps also a new TV set that takes the digital signal. Also, broadcast has not come up with a direct to home device for hi-speed web, relying on phone lines or cable. I argue that this FCC digital transition may lead these remaining non-cable, non-satellite customers to in fact take one of these products and force the broadcaster to rely even more on their relationships with cable and satellite.

Recent ads by cable tout that competition is good and that by them entering the phone business they are bringing healthy competition to the user and thus better pricing options. The triple play by cable companies have in fact been an ideal way to lower churn and retain customer loyalty. They also have the pipeline to interactive content, like VOD, and the convergence of data and video.

At the same time, the FCC transition may also be helpful to competition. Along with a digital antenna and superior signal, comes HD programming directly to the set, without a converter. Niche programmers with an inability to get prime channel line-up space on cable or satellite might consider offering a digital signal and become a broadcaster of their own channel. As Shapiro says, "A single touch of one button and the consumer is instantly dialed in." Still, how the broadcasting industry answers the issue of interaction will have to wait for another day.