Tuesday, 17 November 2009

While Broadcast & Cable Battle for $, Rome Burns

Comment posted on MediaBizBloggers to Simon Applebaum's update on the revenue battle (fee for carriage) going on in the US:

Great update on the battle, Simon, but I cannot help but feel like we are all watching dinosaurs fighting each other for a slices of a rapidly shrinking pie. Kind of like watching music industry execs committing hundreds of thousands of dollars to suing middle class individuals for file sharing while iTunes continues to drain off most of their revenue.

I've been watching a new generation, my now 14 year old nephew, spend literally his entire weekend's leisure time watching hours and hours of short format videos on YouTube, in addition to watching a movie at the cinema and another on DVD on my flat screen, plus spending about 25% of his time playing video games. And this has been the case FOR TWO YEARS. He spends only about 5-10% of his time watching teen shows or cartoons on broadcast/cable TV. He tells me this is true of all his friends/classmates.

We have already witnessed "The Death of Frequency" (a strategic revolution in advertising that only Apple and Lee Clow have picked up on thus far) and we're now seeing a gradually more rapid shift in where the masses are spending their leisure time, and it is not on watching TV. TV ad prices went up 400% in the past 20 years and continue to rise even as viewership declines.  There's a race on to wring as much as possible out of TV advertising revenue that will inevitably speed up marketers rejection of the medium as they find much more cost-effective and user-appreciated media to buy into.

It's a very strange sensation to be sitting out here watching the battles rage between Spinosaurus and Giganotosaurus while several generations of viewers are busy building a new entertainment platform over them that will sooner, rather than later, consign their dominance to history. Broadcast and cable TV will not vanish anytime soon, but it will fragment as the bulk of the revenue stream evaporates.

In a period measured in months, not years, average young people will be watching content on Bluetooth projection glasses streaming from their smartphone and on their netbook/tablets. The pipeline will be the Internet, whether there's a ad-supported business model for it or not.

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