What if all Video were on the Internet?

who was the last of the three original Intel leaders to leave, liked to encourage employees to ask “What if?” questions. He felt they could lead to new discoveries about future change. Thus, we ponder, “What if all video were on the Internet instead of Cable TV?”

Consider the impact on three constituencies, (1) Consumers, (2) Sponsors, and (3) Copyright Holders.

Consumers will benefit in four ways. First, all programs will be available on demand. Broadcast schedules will be irrelevant and there will be no need to remember to TiVo anything. Second, shows will be viewable on any screen from mobile phone to TV. Third, content will be searchable. You’ll find what you want to watch by Googling it. Fourth, the Long-Tail will stretch to near infinity.

Sponsors gain a number of advantages. First, viewership will be measurable. Second, commercials can be held accountable. Sponsors might be able to choose to pay for only those that actually get watched. Third, ads can be interactive thereby generating sales nearly instantaneously from the viewers. Fourth, ads can be addressable in a variety of ways including demographic, geographic, and behavioral targeting.

Copyright Holders also stand to benefit. First, Internet distribution provides a Global market. Second, revenue opportunities for Long-Tail content become viable because there is no need for a minimum economic production run as would apply for DVDs. Hollywood studios will be able to sell downloads from their back catalog that are seldom available in the form of physical DVDs. Third, consumers will be able to make impulse purchases since the Internet is constantly available 24/7. Fourth, the Net provides opportunities for multiple revenue streams. Among them are (1) rentals, (2) downloads, (3) subscriptions, and (4) advertising.

Inevitability. For the past 30 years we’ve been gradually attaching an increasing number of appliances to our TVs. In the first half of that period the devices were not Internet-connected and included items like Cable Set-Top boxes, Video Tape Players, and Video Game Consoles. However, during the last 15 years most such appliances are Internet-connected. Examples are laptop computers, Apple TV, (modern) Video Game Consoles, and even the iPhone and iPod.

As a result, the TV is being transformed into a dual function device. In one context it remains a TV as we have always known it, but in a second it is becoming a giant window into the Internet Cloud. Thus, the question is not “What if all video were on the Internet?” but instead is “When will all video migrate to the Net.”

To learn more about how your business can exploit or adapt to such changes, feel welcome to contact us. You may also want to consider buying our research reports Third Generation Television and Future Developments in Video Advertising.

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