Monday November 14, 2011 – Greg Scoblete
In Walter Isaacson’s widely cited biography of Steve Jobs, we learn that Jobs “never put profits ahead of products.” Such was his devotion to making an insanely great consumer experience that he was willing to shun Business 101 in his pursuit of perfection. At least, that’s the myth. In reality it sounds just a wee bit self-serving, like an artist declaring that they would never value material success at the expense of their “art” only after they’ve become a blockbuster success and no longer subsist on mac-and-cheese.
However many grains of salt you want to sprinkle on the “products before profits” ethos, it’s pretty clear that whatever’s driving the pay TV industry, it's often the inverse of Jobs' mantra. The end-user’s experience - what they can watch, where they can watch, how they watch, etc. - is not a thing of beauty. What's frustrating for many observers is that it could be.
If technology had its way, our pay TV universe would look considerably different. For instance: you wouldn't have channels. Instead, you'd have apps. No more asking yourself, in the wee hours of the night, what's on channel 7,334. Instead, you'd navigate a sleek UI to find your app of choice.
Once you're in the app, you could choose from a linear offering (particularly useful in the sports world) or from a video-on-demand catalog. The app model provides the content provider with a wealth of opportunities to integrate more interactive content, contests, games and social interaction. Content owners would naturally charge a subscription fee for an app, but consumers could pick-and-choose only the apps they wanted instead of being saddled with content they're indifferent to.
These apps could be hosted on a "smart TV" or, more likely, a wireless home gateway capable of streaming to additional thin clients attached to televisions around the home.
None of the above is terribly high-tech. With technologies like Adaptive Bit Rate Streaming making Internet-delivered video ever more enjoyable to the end-user, it could be done tomorrow. It's the business models that don't work. Profits are trumping products.
But it needn't necessarily be so. Selling bandwidth into the home can be profitable. At the recent Telco TV show, many small and rural service providers without a video offering were taking a keen look at over the top video delivered over their broadband network as an easier entre into the triple play.
Even established service providers might eventually grow weary of the retransmission battles and black-outs. The future is out there. We just need to think different.
