thinking inside the box pt. 1 - the set top box: the future of broadcasters

July 2, 2009 ·

i was in the midst of writing a post about new models for tv broadcasters when it dawned on me - it's not about them anymore, they're not in control. not for the tv anyway. you're saying, 'duh, tell me something new.' i'm not necessarily talking about consumers being in control, but the cable companies.

the blog post was supposed to be on how broadcasters could reboot their model to address the digital future and changing consumer behaviors. it had its points, but something just seemed to be missing, though i couldn't pinpoint it (hence why i didn't post last week). then i just realized, what i'm proposing is outside of their capability in a meaningful way.

where i got hung-up was the ever-expanding on-demand side of the media consumption world. save for the online world, they had no presence. you may say: 'but everything is moving online anyway.' yes, it's all going to be available online, but the point is more that it is going digital, which allows it to be online. you see, tv isn't going anywhere. it is still an unparalleled experience that will still be a centerpoint of homes. it will converge with online and all things digital, but as a content consumption platform, it is here to stay.

step into the past
broadcasters became media entities simply because they had their bandwidth (the signal) and controlled the product in all ways. they made the shows, cut them up, they sold the ads, inserted those ads in between, then produced the signal with which it was all carried, straight to the home. what they put out is how it was received start to end.

the shift that started before the digital revolution is in the delivery system. it went from being a signal through the air to being piped in through copper or fiber-optic cable. the cable companies disintermediated without ever altering the signal. this hasn't been an issue because the internet along with other on-demand and personalization technologies haven't posed the significant challenges to the system until now. that and the increasingly savvy, fickle and ignoring youth that have emerged.

what's impending is a massive power struggle for consumer attention between the broadcasters and cable companies. and it's a battle that the cable companies should win, both for us marketers and the consumers. here's why.

the signal is fading
the old way of broadcasters operating, that of one signal, sent out through the air,is dead. it just doesn't make sense anymore. even if it is a digital signal that they're implementing in the usa. there are no opportunities left for a sophisticated marketers or consumers by this means.

the airwaves don't provide an efficient system of delivery, nor the ability to implement anything but singular content and messages. it's all going to the set top boxes where technology is able to segment, personalize, target and be responsive.

no one broadcaster will do
this is the data level, the semantic level. the web 3.0 of tv. there is only one entity that will be able to take the vast quantities of data that we'll soon be able to collect about audiences; their demographics, behaviors, consumption patterns, and lifestyle and make it usable. it can't be a broadcaster because they are only one of many players and as any good company does, they only look out for their interests. no, it has to be a 3rd party and who better than the delivery system.

the cable companies are the ones who can aggregate all that data and package it into something that marketers can use. it's the sum of our activity, across all networks, stations, and programs that define us and make us valuable targets, not what we do on each of those in isolation to the rest. and because they generally also are the pipeline for the internet, it's even more interconnectedness.

targets of one, not targets of all
we're not a homogeneous herd anymore and we have to stop treating consumers that way. it just doesn't apply anymore. as consumers tune out more and more to mass messages, targeting becomes the savior. in order for content to be properly monetized the ads within need to be relevant to the audience to have any impact and show roi to the investment of buying time in said content.

the technology will be so it doesn't assume a potential audience of which you buy the whole of it against a very broadly defined segment of it. rather, it will be where you buy just those that you want. that's not possible over the airwaves. the cable companies can distribute the content, not as a uniform signal from the broadcaster, but as the content interspersed with their own data generated advertising.

the on-demand environment
the broadcasters never played here in controlling the experience. that is except for limiting what was available. i have seen limited monetization happening by the broadcasters as each program that was on-demanded had some kind of ad in it as it was basically a broadcasted stream. per the points above, that's not going to continue working.

where's it all going
so what arises out of this? let's leave that until tomorrow, i've already written enough words for one post (as i often do). i'll hypothesize about where both networks and cable companies will play and how the industry will shake out.




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