TV Everywhere, Anywhere, Somewhere…

Programmers and cable operators, other than CBS of course, tout it as the savior, putting the proverbial “genie back in the bottle”. But the $64,000 question is if the TV industry is already too late to the game and if this plan is what can save them?

One key concept from Chris Anderson’s “The Long Tail” is how technology has democratized the tools of production, reducing the barriers of entry to previously capital-intensive businesses such as television. This raises a few fundamental questions about the TV Everywhere plan. What prevents someone from recording a show on DVD (or a networked DVR for that matter) and putting it on the Internet through a pirated video site? Legal authorities can do only so much to prevent illegal sites, but like it or not they exist. One only needs to look at the frustration over NBC’s tape-delayed Wimbledon coverage. Disappointed users had no problem finding a live feed on the Internet.

Technology evolves faster than corporations can react. Even if the TV Everywhere concept comes up with a successful authentication plan and finds a way to address pirating, how long before someone figures out a way to beat the system. Shedding light on Cablevision’s recent court victory allowing it to deploy remote DVR, it may actually help the industry in the end. A DVR is yet another Internet-capable device in the possession of users that consumers can use to put unlicensed content online. Removing these boxes from cable homes can help prevent this. It may sound farfetched, but its not outside the capabilities of the increasing tech-savvy world.

Putting the genie back in the bottle is tougher than it sounds. It’s like telling kids not to smoke. They know about it, they have seen it, telling them smoking is bad only makes them want to do it more. Giving the customers free content, then taking it away from them, will only inspire them to want to find ways to get it free.

Bringing up another Chris Anderson concept, one I don’t agree with, free does not work. It killed music, its killing broadcast television, its ruining newspapers, and it will destroy everything in its path. iTunes did not save music. 99 cents is not sustainable revenue. Kindle is about to ruin the book industry with its low-cost business model. Offering services free drives user numbers, not businesses. The key is to find ways for the product to drive usage and squeeze as much revenue out of the situation as possible – something Apple has done well for the most part, in selling premium products.

TV Everywhere is necessary. Content providers will not remain sustainable in the long run if they can’t charge for content. TV Everywhere is the effort to save big programmers. If it fails, and users begin an attrition from cable to online, revenues will start to shrink, programmers will be unable to afford content development, and users will be left with a smattering of UGC and You Tube videos to watch.

Obviously, its an exaggeration, but it’s the path the industry is heading towards. Leno at 10PM is the first step, a major network unable to afford traditional programming due to shrinking revenue. It may take years to manifest itself, but successfully charging for online content and maintaining current revenue levels with reasonable growth is necessary for the industry to avoid disaster.

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