The Rule of Thumb on Disrupting Digital Businesses aka Why The internet is not disrupting TV. There is a widespread misconception that the common thread to industries that the Internet has disrupted is that the disrupted industries were or remain analog and the digital nature of the internet made it impossible for them to keep up.
Put another way, there are those that believe that any business that is doing business like they always have will inevitably be disrupted by the internet. Change or die. Right ? Wrong If my memory serves me right, the common thread among those industries that were disrupted is that they all sold their products ala carte. Music – By the CD Newspapers – Single Newspaper (Dallas Morning News) sold by copy or subscription Magazine – Single Magazine (Newsweek) sold by copy or subscription DVDs – Single copy.
Blockbuster – Rent each DVD In each of the above examples, the primary revenue stream from the product came from ala carte sales – the purchase of a single product. What Google TV and Apple TV Should Do. Just because it seems like much of the internet wants television to be delivered outside traditional platforms doesn’t mean that it’s a good business to pursue.
As anyone who reads this blog knows, I think the future of TV is TV. But what is the future of entertainment on your TV ? Entertainment on your TV and TV (video programming) on your TV are not the same thing. The first question to ask is “Why is TV so popular ?”. Why do so many millions spend so many billions in order to watch the shows, movies and events that TV serves up ? TV is the best cure for boredom. TV is the path of least resistance alternative to doing nothing.
Now ask yourself what you do when you are bored to tears and you don’t have a TV available. Once we are done with those mundane tasks and a TV is still not available, we turn back to our PC/Phone/device and we play games. Why do you think social games like Farmville, Mafia Wars, etc are so popular ? How Google TV Could Hand Netflix the entire streaming universe. I personally can’t think of anything stupider for the big broadcast networks to do than give their shows to Google for free.
Why ? Because they are finally getting BILLIONS of dollars in retransmission fees from their distributors. This is new money. It is found money. It is money they are fighting for. The idea that they would take and fight for money from their distributors, who generally are the same ISPs that Google TV delivers content over, and then offer the exact same shows for free through Google TV, or any aggregator that expects that content for free is probably one of the dumbest concepts ever. Now if Google were to go to those networks and offer them money per month for every buyer of a Google enabled device or TV, that would be different. So giving the same content they not only charge their distributors for, but also charge their local affiliates for to Google for nothing or for a share of revenue ?
If this is true. So riddle me this batman. Netflix is smart as shit. The Value of Your Time and How it Impacts the Internet Video vs Traditional TV battle ? blog maverick. The argument is pervasive. Kids don’t want or need cable. They have the internet for content. Why would they pay all that money when they can find most, if not all the entertainment they want and need for free ? Put another way “kids today”, the twentysomethings, dont follow the same entertainment consumption paths that their parents and elders do. The new mantra is “Never trust the media consumption habits of anyone over 30“ Well no shit Sherlock. I’m going to let you in on a secret. I’m going to let you in on another secret. Which in turn leads to the next truism. So what does this have to do with Internet, Internet Video and Traditional TV ?
If you read my blog posts you know that a recurring theme is that businesses must offer the path of least resistance to their customers. So to state the obvious: 20 somethings dont value their time as much as 30 somethings who don’t value their time as much as 40 somethings, etc, etc.