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TV, TV Everywhere

Capsule:  TV Everywhere is the cable-led armada trying to colonize the internet by navigating subscription TV's dual-revenue stream.  It's here now because its cable royalty parents--Time Warner and Comcast--are ready to move forward with a-mostly-agreed-upon first-use model for QoS-and-DRM-supported broadband video.  While Time Warner's HBO Go is beginning to share its internet look-and-feel, TV Everywhere isn't TV, yet.  TV will be Everywhere when either the cable industry or the new cloud media giants turn their vision for internet viewing into a product, like HBO turned movies and sports from broadcast into cable TV over 30 years ago.  The biggest challenge: putting content and distribution back together again.

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"TV Everywhere" is the new black.  It's racing "fiber-rich," "high definition" and "Triple Play" to the top of the multichannel search list hall-of-fame.  It's "what you want when you want it;" it's "always on;" it's "lightning fast;" and, it will be every other term cable marketers have used to sell digital TV and broadband for the last 15 years. 

It's not TV.  It's TV Everywhere.  And it can save or destroy the distribution side of the cable and satellite industries.

The current TV Everywhere plan is to authenticate the billable identity of a cable, satellite or telco TV customer by giving him an internet "identity card" that will transcend borders when that customer watches TV over his broadband connection.  Of course, border control costs money and permits taxes, fees and surcharges to follow customer migration--making it likely to receive government support. But the most important aspect of TV Everywhere's authentication process is that it can help content and distribution companies know more about who watched what, when and where as well as how to increase revenue based on that knowledge.

The TV Everywhere business strategy is to use authentication to safeguard digital rights and digital revenue.  Of course, authentication alone won't lead to profitable growth without new product and pricing strategies.  Ultimately, TV and broadband subscription customers are going to drive these new product strategies by preferring to watch some of their favorite TV shows and movies online, with searchable navigation, which alone will change the nature of TV viewing, making the PC screen arguably superior to that cool fire in the living room.

Unfortunately, the negative of searchable navigation is its powerful pull towards a la carte and away from cable networks and their retentive brands.  Searchable navigation favors individual TV shows and movies, just like internet music favors singles.  In order to off-set a la carte cannibalization, TV distribution is likely to end up charging more for broadband TV as a service--both to increase profits on its most valuable tier in the home and to slow down the movement of its customers toward the siren song of internet TV. 

A broadband "navigation surcharge" may be a useful way to think about driving higher broadband rates, as long as it can be tied to a real cable broadband navigation product.  It's better than imposing a "bandwidth utilization" or "bandwidth metering" charge when considered against today's vibrant regulatory landscape.  It's more distribution-friendly than a "broadband content fee" since surcharges on internet TV content will have to be shared with the content companies. 

No matter how lucrative increased broadband navigation charges might become, they're unlikely to power a new collection of cable content and distribution products on their own.  Cable pricing will lose its elasticity when stretched over an increasingly expensive Triple Play including immobile TV and deteriorating voice values. For cable, a new generation of mobility products is a better solution to making TV Everywhere more than a zero sum game.

Mobility can drive profitable growth for the cable, satellite and telco industries provided distribution embraces a new media math--one that looks at spectrum utilization differently and is prepared to invest more capital into plant, equipment, software, devices and business development partnerships.  The new mobility math will reward distribution companies for network expansion, maintenance, billing, customer service and new authentication features, like personalized navigation.  It's also likely to favor content and device partners with what may seem like a disproportionate revenue share just for showing up.

The addition of mobility to the cable product line can also bring substantial omnibus benefits, including improved pricing elasticity; new combined wired-and-wireless spectrum for niche and VOD content; a new syndication quick-stop on the DRM food-chain; and, new market access to a younger demographic that might be inclined to buy broadband-only or, worse, to buy wireless broadband only from a wireless provider.  If cable can carve out a claim to a wireless footprint with a handful of wireless products, it can also promote its healthy economics, including the dual advertising-and-subscription revenue stream that floats all boats in the wired world.  And, it can leverage the cable industry's greatest strength: its fixed connectivity and ongoing billing/credit relationship with the home that supports a complete understanding of who its customers are and what they're doing.

The cable industry hasn't yet tapped into these strategic benefits beyond managing receivables with remarkable diligence--no small feat considering the credit storm not yet past.  Cable's most strategic use of its omniscience on where we live and what we buy has been to reduce service and maintenance costs by speeding up the diagnostics process for service technicians.  By properly taking location-based and polling benefits into account, cable distributors can use authentication to move TV from screen-to-screen in the home.  And if catch and capture video can be perfected in the home, mobile TV can't be far behind.

Potential new B-2-C and B-2-B products that TV Everywhere can hasten--for cable, for wireless companies or for the cloud-based internet advertising and retail giants, including Apple, Google, Amazon, Microsoft and, lately, Facebook--include: new TV networks (Google does own YouTube after all) that can place singles or series onto every screen (including the mobile ones) with a single purchase; expanded bandwidth-as-a-service that customers can buy like expanded storage, serving up a new version of the network DVR and combining wired and wireless spectrum to support new niche products like the iPhone supports new "apps;" and, powerful targeted advertising and marketing "avails" that can reach customers with relevant marketing messages on every screen.  

Authentication's theme will be a complete 360-degree-customer-lifestyle-view that can make whoever brings it modern and pervasive (think Apple.)  New interoperable navigation products may jump across screens along with content; and, new bundled voice products can package free calling along with low-priced videoconferencing and pre-programmed podcasts storable on any cable-served customer's fixed or mobile device, including in-car audio systems.

Looked at in terms of its ability to bridge wired and wireless products and content, TV Everywhere can become a new design for a reinvented media sector.  For cable, the limiting factor may be the challenge of imagination.  Big distribution may fail to imagine a future bigger than the Triple Play.  It may exhaust its potential, wringing every cent out of traditional programming-and-distribution arrangements, ending up parched with a museum of STB hardware around its neck and too little exclusive TV content. 

If cable content can't imagine a future where it avoids a la carte value deterioration--a certain outcome if it partners too closely with the new cloud media--it will be similarly beached.  We've seen what happened to publishing and advertising by failing to read the maps correctly. Cable networks may not make the same mistakes.  They may reinvent themselves by thinking of the TV form in a new seamless format that can appear anywhere and everywhere.  Or,  we all may end up watching TV as shorts on YouTube, Apple and Facebook, saving our quality time for online reading and research--if there's enough of quality left to read.