Broadband video is here, and it’s going to take a growing share from the TV incumbents, cable and satellite. The real question is how and when – what are the specific catalysts that are going to force cable’s hand?
There are a bunch of structural conditions like people getting used to on demand through PCs and PVRs. And online video streams rising, partially spurred on, ironically, by initiatives from the very people who have the most to lose, like TV Anywhere and Hulu.
But what I’m trying to pinpoint are the individual ruptures – serious seismic events – that will make everyone take this seriously or abandon their current way of working entirely.
- Bandwidth ceases to be an issue for most, and MSO’s value-add of QOS and bundling is much less attractive (2+yrs)
- Cord cutting actually starts to be an issue (2-3yrs)
- Bandwidth prices soar as MSOs try to inoculate losses (2-3yrs), but flatten out over time (3+yrs) because it is a commodity and competition forces prices down (wasn’t google buying fiber? Will gov’ts step in here?)
- Online video actually starts to make money – advertisers seek out targeted buys and pay higher CPMs to get qualified customers (3+yrs)
- Studios/rights holders begin to realize that they can make 100% by going direct (4+yrs)
- Studios/rights holders narrow (or even eliminate) release windows for a proportion of their catalogue that makes sense (5+yrs)
Another phenonmenon to watch is the growth of cool content available only online. Above I’m talking about premium content but I see video as becoming a major method of human communication (e.g. a blackberry videoconf – because text is very limited). And as it does, the pressure from ISPs to monetize the delivery of this (and YouTube’s UGC) will be an increasing problem.