I learnt a long time ago that one of the biggest factors in pricing something, especially in the high tech industry, is convenience. For someone who was always a do-it-yourself-er the notion was pretty foreign to me, I mean why would I spend the extra dollars to have something done for me when I was equally capable of doing it myself? Of course the second I switched from being a salaried employee to a contractor who’s time is billed in hours my equations for determinting something’s value changed drastically and I begun to appreciate being able to pay to get something done rather than having to spend my precious time on it myself.
The convenience factor is what has driven me to try and find some kind of TV solution akin to those that are available in the USA. Unfortunately the only thing that comes close are the less than legal alternatives which is a right shame as I would gladly pay the going rate to get the same service here in Australia. I’m not alone in this regard either as many Australians turn to alternative methods in order to get their fix of their favorite shows. What this says to me is that teh future of TV is definitely moving towards being a more on demand service like those provided by Netflix and Hulu and less like traditional TV channels.
Some industry executives would disagree with me on that point, to the point of saying that watching TV on the Internet is nothing short of a fad that will eventually pass. There’s been a couple clarifications to that post since it first went live but the sentiment remains that they believe people who abandon their cable subscriptions, “cable cutters” as it were, are in the minority and once economic conditions improve they’ll be back again. I can understand the reasoning behind a cable exec taking this kind of position, but it’s woefully misguided.
For starters Netflix alone counts for around a third of peak bandwidth usage in the USA. To put this in perspective that’s double all BitTorrent traffic and triple YouTube, both considered to be hives of piracy among the cable cartels. This is in conjunction with the fact that people are using their Xboxs to watch movies and listen to music more than they’re using them to play games, usually through online services. Taking all of this into consideration you’d be mad to think that the future is still in traditional pay TV services as there’s a very clear trend towards on-demand media, provided through your local Internet connection, is what customers are looking for.
There’s two reasons to explain why cable companies are thinking this way. The first, and least likely, is that they’re simply unaware of the current trends in the media market space. This is not entirely impossible as there have been a few examples in recent times (BlockBuster being the first that comes to mind) who simply failed to recognise where the market was moving and paid the ultimate price for it in the end. The far more likely reason is simple bravado as the cable companies can’t really take the stand and say that they’re aware of the changing market demands but will do nothing about it. No for them its best, at least in the short term, to write off the phenomena completely. In the long term of course this tactic won’t work, but I get the feeling none of them are playing a particularly long game at this point.
As I’ve said many times before media companies and rights holders have fought tooth and nail against every technological advancement for the past century and the only constant in every one of them is that in the end the technology won out. Eventually these companies will have to wake up to the reality that their outdated business models don’t fit into the current market and they’ll either have to adapt or die.