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Huh? What was that about Internet TV?

March 23, 2010 Leave a comment

Hey, people are reading my blog. And not understanding it… oh great. One reader asked if I could explain the MIT Enterprise Forum discussion in plain English.

Sure… at least I can try. A lot of television content is going to be available on the internet (a lot already is). Companies that make money today by showing TV programs are predicting they won’t be able to keep making money when that happens. So every company that makes TV content, or that shows TV content, is trying to figure out what to do to save their business. At the same time, new companies (like Google) that don’t have traditional TV businesses are also trying to figure out how to make money showing TV content to people on the internet. And finally, viewers are starting to realize they don’t have to rely on broadcast TV or cable or satellite TV to see their favorite shows. The loss of viewers for traditional TV is reducing cable/satellite TV subscriber revenue, and is also causing advertisers to spend less on TV ads, and they aren’t shifting that money to internet sites showing TV programs. So the session was designed to highlight new ways companies can make money on internet TV.

And those new ways boil down to three basic strategies: 1) keep subscriber revenue coming in by allowing cable/satellite subscribers (and no one else) to also see programs on demand on a website; 2) create the same size audience for each program that used to watch it when it was broadcast or shown on cable, by making it available on lots of websites and charging advertisers for all the viewers no matter where/when they saw it; and 3) making it possible for anyone to pay directly for each show they want to watch. The future of TV will be a combination or coexistence of all three strategies.

And no one knows which of today’s companies will make the transition successfully to this new TV land. They’re all trying to navigate a treacherous path.

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