Will the iPad Become The Game Changer TV Portal?

| Editorial

The world of broadcast, cable and Internet TV is in an extreme state of chaos. While it seemed like a good idea to provide many avenues for consumers to obtain TV content, those many channels have also led to money squabbles and abrupt changes in programming. For example, Viacom, on March 9, will pull The Daily Show and The Colbert Report from Hulu. Is there a way out of the chaos?

It turns out that Viacom and Hulu are squabbling about the ad revenue split. Hulu put some nice spin on the situation, saying, "After a series of discussions with the team at Comedy Central, though, we ultimately were unable to secure the rights to extend these shows for a much longer period of time." However, Wayne Friedman of MediaPost Publications added some details: "It seems Viacom wants a bigger split of advertising revenue -- supposedly more than the 50% to 70% it already got from Hulu." Hulu apparently declined that deal.

Hulu

Hulu

This is just another chapter in the long, sorry history of the splintering of of the TV world. Last year, I fantasized about a TV Portal service that would provide a single lookup for any TV show. Then depending on the makeup of your equipment, Cable, Apple TV, Hulu, for example, you'd know how and where and when to get a particular TV show -- or whole series.

That hasn't happend, so far as I know, because very few people would, I surmise, pay for such a service. It would require a massive amount of work to build such a database and maintain its ever changing structure.

On Thursday, David Morgan, also with MediaPost Publications, suggested that TV programming needs to move closer to a point of sale service -- as opposed to a traditional broadcast. After all, the commercials in broadcast TV are of interest to only a small percent of the viewers. The rest of us (well, about 50% of Americans), as proven by DVR habits, pre-record our favorite shows, watch at our leisure, and hit that 30 second skip button to fast forward through commercials.

Of course, we can't forget that millions of Americans simply connect their TV to the cable box, look up the night's viewing in the TV Guide, and glide through the night. Even so, I don't believe the future of TV rests on maintaining that old-time scenario. Increasingly, advertisers want to know who they're reaching and what the ROI on their investment is. That means that, eventually, TV delivery needs to become a one-to-one proposition, not a one-to-many, as Mr. Morgan noted.

Today, however, as proven by the Viacom-Hulu squabble, people who want to settle on a single, simple delivery mode can't do it. If you killed your cable to switch to Hulu, and you're a big Stephen Colbert fan, you're screwed after March 9. Currently, it requires a mix of equipment and services to cover your bases -- and even then there are holes. A notable example is when DIRECTV dropped Versus (owned by Comcast) thanks to exorbitant fees. (Leaving DIRECTV's ice hockey fans furious.)

It occurs to me that a TV portal isn't really the solution. In fact, one can and should expect that a new technology will come along that changes the game so completely that it automatically brings at least a partial solution to the problem.

That technical innovation would well be the Apple iPad.

The iPad doesn't require a lot of complicated cabling. It's portable. It's battery life is such that it's almost always immediately available. If content providers were excited about delivering video to smartphones, then they should be out of their minds crazy for the iPad. That's all assuming that Apple doesn't do something stupid and try to make the iPad an iTunes only device. After all, Apple's revenues from iTunes are small compared to hardware sales. It would behoove Apple to make sure that a Hulu app and other apps allow content providers to create that special one-to-one relationship with iPad customers such that any iPad user can get whatever he/she wants whenever desired.

The picture is still unfolding. Even so, I have a gut feeling that the way out of the TV market disintegration is via universal hardware. If Apple choses to promote that, there may come a day when stand-alone TVs, except for exotic home theaters with 3D, are the exception. Instead, our TV experience resides in our backpack or briefcase. At that point, everything changes in the TV market.

The question is basically whether network executives will have the vision to take advantage of a technological game changer or whether they'll cower, cover their bets, and grind themselves and customers into yet deeper despair of TV disintegration.

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Comments

Nemo

Technology is not the problem.  Today, we have the technology to offer a single portal that could connect to all devices.  Neither hardware, software, online media store, codecs and other formats, or payment systems are the problem.  Apple or Google or Microsoft, et al. could within six months create an excellent portal that would contain all media and the could work on any device. 

The problems are business and legal problems that fall into two broad categories.  One categories, involves the fight among the leading device makers for dominance, each with its own proprietary file formats, codecs, DRM, and different hardware that has different capabilities.  Since the file formats, codecs, DRM, and hardware are proprietary and are crucial to dominance in the markets for devices and for online app/media stores, no device maker, whether it be Apple, Microsoft, or Google, is ready to relent on its control of its proprietary IP and hardware.  That means their isn’t and can’t be one app store, one DRM, one codec, and/or one file format that will work with all devices.

However, there may be a workable approach to universality of one app store for one device.  Apple is leading.  It will, as it now does, offer iTunes for other devices, at least through the browser to all devices.  And Apple will open its devices to anything that uses open standards or standards that can be licensed on affordable and perpetual terms, such as MPEG4.  All devices makers (Google, Microsoft, et al.) will do likewise, for it only makes sense to do so:  Put you own proprietary standard on every device, at least through the web, while opening your devices to all open and/or practically licensable standards, thus, making your device as close to ubiquitous as possible by opening it to as much content as possible, without sacrificing one’s proprietary IP.  It is not Mr. Martellaro’s universal portal for all devices, but it is as close as we are likely to get.  But it is, unfortunately, not enough, for we must still deal with our other category of problems.

This next category comes under the rubric of money and rights.  Each copyright holder will only license their copyright, if they get an acceptable deal on how to distribute content and divide the stream of revenue from distributing content.  This a whopper that is made tremendously more difficult by business models and technology for online distribution of media being nascent and unsettled. 

Even when we arrive at an equilibrium in our first category of problems, supra (a mixture of proprietary, open, and licensable standards and technology), we still must negotiate a money deal that the various copyright holders will accept.  While Apple is better positioned than many to get to a deal with movie studios, TV networks, et al., because it can and does run iTunes close to break even, which it can afford to do because it has multiple revenue streams, principally from its devices but also from software and iTunes and App Stores, it still a daunting tasks to negotiate a deal where the parties agree on the methods of distributing content; pricing models for the content; the DRM scheme; how the privacy, control, and access to customer’s personal information will be managed, and how revenues will be split.  These are immensely difficult negotiations. 

Google is also well positioned, because it has an alternative stream of revenue from advertising; Microsoft less so, because it doesn’t have a successful device business and because its business model of licensing its proprietary OS appears to be not viable and obsolete for modern mobile devices.

So our problems are not technical but involve two categories of problems of business and legal problems.  One category centers on the device makers desire to dominate with their devices and online app/media stores, and their desire, particularly in Apple’s case, to control the whole process so that its ability to innovate is not limited by others’ agendas and technology.  The other category has to with the content owners need to get the financial deal that they want, protection against illicit copying, and get customers’ personal information that they can leverage for advertising and other marketing and, particularly, for having a direct relationship with the customer.  These two categories of problems are what prevents one portal for all devices.  The technology for universality, while sophisticated, is available today and is trivial.

BWilcox

“...there may come a day when stand-alone TVs, except for exotic home theaters with 3D, are the exception. Instead, our TV experience resides in our backpack or briefcase. At that point, everything changes in the TV market.”

I’m not giving up my 42” 1080p for a 9.7” screen anytime soon…and neither is anybody that I know. Matter of fact I’ll probably let the kids have it for their Wii by this Nov. and pick up a new 50” on Black Friday smile

iJack

”..very few people would, I surmise, pay for such a service.”

And yet, here I sit watching Showtime’s “The Tudors” from beginning to end, on my Mac, via my Netflex account.  It’s not that I ever objected to the $14.95 per month for two DVDs at a time, but that the ability to watch a blockbuster on DVD, then later, a fine old French film on my Mac, is value added, a must I believe for content retailers.

Comcast may be able to pull it off eventually, since they can provide voice and internet access, an maybe Verizon FiOS is already doing it with the right balance of price and service, but I don’t know, since I don’t have it.

Robbo

For a long while now, I’ve been thinking that Apple is testing the water for the living-room TV market. Imagine a 42” TV, as thin as an iPad…. Contained inside is the iPad OS vers.3, good connectivity, HDMI, Ethernet, WiFi etc. Then, once proven and established, Apple simply licenses out the technology and TV will never be the same again.

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