November/December 2010
Volume 30 No. 7

January-February 2011 Cover
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My Two Cents

Television will surely change, and not because of 3D or social media, but for other reasons, like IPTV. The unique thing is that this change will not be driven by the current television industry leadership, but by an organic development.

For sure, the role of TV will change: Television will become solely an entertainment medium and the Internet (or Web) an information outlet. In turn, this information outlet will be split into multiple parts for gossip, hard news, commentary, social, political and religious activities, search engines, communications and talent scouting. These are all activities easily relegated to a computer, smart phone or iPod.

However, when people want to be entertained, they’ll still run to their large-screen TV sets. Viewers simply cannot enjoy watching a football match, a fascinating series or a great movie from a computer or from the screen of a smart phone. And the trend is clear: TV sets are becoming bigger and bigger, while hand-held devices are getting smaller and smaller, possibly anticipating what I call “The Videovision.”

Therefore, I do not agree with two statements found in the U.K.’s Royal Television Society’s official publication, Television. First, that “The traditional television broadcast model is simply not compatible with the social lifestyle preferred by the new generation.” Second, that “Quality is no longer defined by production values, but is determined by relevance.”

As mentioned above, the traditional television broadcast model will indeed change, not because of social media, but in the sense that it will depart from the current “appointment television” to “videovision on demand,” thanks to IPTV. Subsequently, the business model will expand from today’s advertising-based structure into a three-tier model that will include pay-per-view, premium viewing and advertising.

And this new business model is strictly associated with programming quality, while “relevance” will be important mainly for the social media.

In this new videovision broadcast model, viewers will be given the opportunity to preview big productions by simply subscribing to the service and viewing them without commercials. The free broadcast services window supported by advertising will follow the premium service. Finally, for those who did not subscribe to the premium service or missed the free broadcast, there will be the video-on-demand window (with commercials) at, let’s say, $1 per show. In effect, videovision stations will be able make money even after their live signals are gone.
Because of IPTV this new broadcast model is extremely easy to implement via the TV sets’ remote control and utilizing credit cards or pre-paid debit cards. Gone are re-transmission fees, since broadcast videovision will no longer need cable or satellite to retransmit its signal. The only thing this new model will need is universal broadband, in whatever form is available or desired (cable, DSL, power-lines, satellite or Wi-Fi).

The additional and interesting aspect of this evolution is that, not needing the spectrum to broadcast, videovision networks will be able to use their electromagnetic frequencies to provide Wi-Fi/Wi-Max and thus create for themselves a fourth revenue tier (if authorities will not be able to separate transport providers from content).

In effect, with the new business model, videovision stations outside the U.S. will be able to monetize all aspects of their operations, even those, like spectrum, that now are non-performing assets that cost money to maintain and by themselves don’t generate income.
But this new and inevitable videovision model has to rely completely on the high quality of its programming. The Internet/Web can be of low quality and still be amusing, videovision can only be of high quality and entertaining. We all noticed that even today’s generation –– that can program a computer and set up a smart phone without looking at the 300 or so pages of instruction manuals –– when it comes to entertainment, also wants the luxury of the big screen and the pleasure of high quality programming.

Dom Serafini