Commentary

Fix TV Now -- Or Say Goodbye

by Joe Marchese , January 13, 2009

The forced, painful user experience that is watching TV though a cable set-top box is no different from the recording industry circa 1999. We all know how much better the experience could be, we have watched television content using TiVo, Hulu and downloaded content (legally and illegally) -- and yet, to say innovation in cable viewing is lacking would be a mammoth understatement.

I know the argument: There is way too much money in television advertising, even with decreasing effectiveness, to make any radical changes to the viewing experience. That's all fine and good, but people are changing the way they consume media content. People are finding ways to get at the content they want, when they want it and without significant interruption. Really, it has been a decade since Seth Godin introduced the concept of permission marketing -- and I still have to look at a banner advertisement on my television when I'm checking out the program guide through my cable box. The fact that I even need a program guide today is a testament to the lack of innovative thinking. Bottom line is this: If cable doesn't get its act together in 2009, it will simply be replaced.

I had high hopes a year ago that the Federal Communications Commission would force cable companies to stop bundling set-top boxes and cable service. This would have forced an immediate and radical improvement in TV viewing, as we would have seen real competition from companies all trying to offer the best viewing experience regardless of the pipe the content was coming through. But that hasn't happened; when I choose my cable provider, I have to factor in how bad the UI is on the set-top box (and DVR) they force on me.

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Of course I can get a TiVo, but even that has its limitations. So I will turn to Hulu, which I have done time and again. And I won't be going to Hulu just to catch a 20-minute piece of content, I will make Hulu my second TV in the bedroom. Then I'll get the rest of the stuff I want from Apple on its iTunes platform. Of course, none of this makes me happy. I'd rather just use the really nice television I spent a considerable amount of money on (not to mention what I spend on cable every month). I'd be happy to view and interact with advertising in this far more visually stunning environment, but the experience is just so bad.

Given the amount of content that is consumed through the home television, the industry's lack of innovation is inexcusable. There is so much potential to provide a better user experience -- and in doing so, to discover new sources of revenue. At the very least, making improvements to the viewing experience offers the potential to maintain and possibly grow a subscription base of those who, today, are increasingly turning to satellite and online content destinations.

Still not convinced consumers will win the fight for content distribution on their terms, despite what happened with the recording industry? Then look at the demand for better devices driving service selection. Look at what is happening in the wireless phone industry. Better phones can drive more subscriptions and new revenue streams (even while losing some old ones).

Why is this so hard for cable? Free the set-top box and work with marketers and content producers to define new revenue streams. I promise, if cable leads, advertisers will follow -- they will finally have to! For cable, the choice is pain on their terms now, and becoming part of the solution, or pain on the consumers' terms later as cable is replaced. Please fix my TV experience, before I throw my set-top box out a window.

18 comments about "Fix TV Now -- Or Say Goodbye".

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Kevin Dwinnell from Brand Thunder, January 13, 2009 at 12:15 p.m.
Would it be fair to say Cable is the new AOL?
It is far too hard for companies to step away from revenue streams this lucrative. It's corporate crack and they won't seek rehab until they hit bottom.
In the meantime, more computers will be hooked up to the home theater and the reinvention of our entertainment will continue from new sources.
Reply

Mike Sprouse from Sprouse Marketing Group, January 13, 2009 at 12:18 p.m.

Hey Joe:
"Why is this so hard for cable?"

Because they are dinosaurs.

Great piece, the only thing I slightly disagree with is that "if cable leads, advertisers will follow". Traditionally, I think you're right. But now, I think advertisers have to lead, and the traditional platforms will follow - because THEY will have to or risk extinction (or their set top box being thrown out the window). If we rely on traditional media types to lead inspiration, we're in trouble.

David Cooperstein from Figurr, January 13, 2009 at 12:23 p.m.

I would love to see a map of where people who use DVRs, Hulu, and iTunes live, and what percent of the population they make up (I should just check my research sources, I know). Oh, and don't forget mobile -- DTV means mobile TV is soon to arrive (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/12/AR2009011202696.html)

My hunch is that once the center of the country - the moms and sports fans that the marketers want most - are on these new platforms more than they are on the tube tuning in, the cable companies will adjust.

Brian Olson from Video Professor, Inc, January 13, 2009 at 12:38 p.m.

Ever heard of satellite?

Cable doesn't need to lead because satellite already is.

It's 2009.

Donald Frazier from OneVideo Technology, January 13, 2009 at 12:42 p.m.

Several interesting and innovative approaches have been advanced over the last several years, such as the MystroTV solution or the OneVideo Technology product set for search of the IPG. But all of these have fallen foul of the cable industry's bizarre method of identifying and adopting new technology. First, incumbent vendors Motorola (the old General Instruments) and Cisco (the old Scientific-Atlanta) enjoy a impenetrable hardware-based monopoly. Second, the central engineering departments of the cable operators have their companies' business units in a stranglehold that they enforce by keeping out any of the edge intelligence-based technologies.

Third, and possiblly most important, the cable industry's R&D consortium requires all vendors to submit to a detailed review and certification process that makes them give up proprietary IP. The result: no innovative companies can make any money on cable and after awhile, none try.

None of this would be possible without the acquiescence of the FCC to Comcast's near-monopoly and the dysfunctional vendor process that is the inevitable result.

Walter Graff from Bluesky Media, January 13, 2009 at 12:45 p.m.

TV viewing is bigger than ever. Internet viewing of TV is by the few. For years they have been trying to get folks to watch TV on a computer and use the internet to play TV. No one is interested.

Brian Hayashi from ConnectMe 360, January 13, 2009 at 12:50 p.m.

As a one-time cable person and longtime Hulu user, I disagree with your post's conclusions.

Your premise that the "...there is way too much money in television advertising, even with decreasing effectiveness, to make any radical changes to the (cable) viewing experience" is flawed. The primary source of money for cable operators (nee MSOs) is not television advertising. Instead, it is programmer fees.

I acknowledge there are many opportunities to improve the experience. I love Hulu's value proposition. Indeed, there are some fascinating convergences ahead, as we see IPTV mashups like Netflix getting embedded into TV sets. Perhaps there will come a day when one of these services gets enough traction to be considered a threat.

In the meantime, there are a lot of ways this business will shake out. Just because Hulu is a thought leader right now doesn't mean that their value proposition is judged to be superior at supporting television program economics. I myself like former Continental Cablevision exec Will Richmond's Videonuze.com as a source of information about innovation in this space.

Brian Hayashi from ConnectMe 360, January 13, 2009 at 1:01 p.m.

Donald, I agree with most of your points, although you seem to intimate that the FCC should be doing something differently. Could you elaborate what action a regulatory body might undertake to address the problems you perceive?

In my experience, the problem has been getting new innovations to work with legacy MSO networks. All of the MSOs are the result of decades of M&A of systems with various architectural approaches. For example, Los Angeles was built with 54 distinct cable systems, every one different.

It has been my experience that most of the vendors who stopped trying to work with MSOs were the ones that trivialized the work required to manage the diversity of local network issues.

Roy Perry from Greater Media Philadelphia, January 13, 2009 at 1:14 p.m.

Cool innovation - hot pink commercial smack dab in the middle of your content. Good thing data proves people don't mind that kind of thing, so TV can keep humming along, right?

Douglas Ferguson from College of Charleston, January 13, 2009 at 1:19 p.m.

Cable protects its revenue streams. Advertising is a revenue stream and so is the STB. Cable will not sacrifice the set top box.

Cable is unaccustomed to seeking happy customers. As long as most customers are not unhappy enough to switch to satellite, then that's "non-unhappy" enough for cable. If customers are willing to pay a monthly surcharge for an STB, then only a poor businessperson wouldn't let them (make them) pay it.

Joe Marchese, January 13, 2009 at 1:26 p.m.

Ron - HA. Great point. I don't work for MediaPost, nor do I have any say in the advertising. I just write an opinion column weekly. But I would agree that is a great point that I think proves my point, with a bit of very sad irony.

Roy Perry from Greater Media Philadelphia, January 13, 2009 at 1:38 p.m.

Thanks, Joe.

Douglas - LOVE "non-unhappy". A profoundly true, nicely slippery, proudly unquantifiable state of mind that is, I believe, the majority opinion in most cases and highly profitable for those who can perceive and service it.

Paula Lynn from Who Else Unlimited, January 13, 2009 at 1:45 p.m.

Great post and great responses. Who is going to give up what they have for a lot less for as long as it takes? Changes will come when they develop from those who can profit from them. My fantasy would be to have one tool which would hook up my computer for hulu, etc. to the TV screen without affecting the use of my said computer for other applications and all preferably without wires and without major monthly fees for ubiquitous usage. Also, I have to add easy usage (of course, coverage still will have to catch up with the years left in pre-digital TV's). Who's on first?

Laurent Burman from GlobalScholar, January 13, 2009 at 2:37 p.m.

great article and commentary - having worked with the cable co's and their "R&D" group CableLabs for years, the lack of innovation and stayed approach from the cable "old boys club" is par for the course.

One innovation that does enable an end-around the cable co's/set top box is PlayOn (www.themediamall.com/playon) - for full disclosure I'm an advisor to the company - but it's unique in letting me play Hulu, Netflix, CBS, ESPN, etc video on my TV easily and inexpensively (and without adding more hardware/set top boxes than I already have)

Lori Jones from Ultramercial.com, January 13, 2009 at 6:45 p.m.

Check out the cable 2.0 solution at Ultramercial.com.

Richard L from LW, January 13, 2009 at 7:43 p.m.

I completely agree. I think the cable industry is very much at risk of becoming a commodity. Instead of being viewed as a differentiated service they will be a dumb pipe with users completely in control of their viewing choices and interfaces. The real value will flow to the new models of content distribution like iTunes, Hulu and Netflix.

As it stands Apple and Xbox already let you download TV shows and movies. Xbox signed a deal with Netflix to allow unlimited streaming of a portion of their library with a Netflix subscription ($9/month) and an Xbox Live subscription (~$50/yr).

As everyone knows the disintermediation of the broadcast model is well underway. Hulu is a great example of broadcasters that see the writing on the wall and are embracing reality.

Next I think we'll see the bypassing of cable TV as more high quality (ie. large screen, HD) internet based delivery methods become reality (AppleTV, Xbox).

Give me Hulu on my TV (which I'm sure is possible) and Netflix on my Xbox and I'll be ready to cut my cable (well - except the internet).

Richard L from LW, January 13, 2009 at 7:45 p.m.

almost forgot...
As an intermediate step, AppleTV or Xbox etc could become a replacement for your STB if this sees the light of day: http://en.wikipedia.org/wiki/Tru2way

Jim Courtright from Big Thinking By The Hour, January 14, 2009 at 9:20 p.m.

I have always thought that the cable companies would be the ones who would eventually create the set top box that was an internet based computer AND your cable/internet connection. Once they do that, they own the world. They could control the pipe and the advertising distribution too, across all the content. Apple TV made the hardware long before the cable companies did. Then Hulu made the interface that is programming friendly. But they never merged. What that says to me is 2 things: That it's a pretty technologically difficult issue, and that it will take years for the advertisers to get up to speed with how to use the technology so it can be lucrative. In our mind, those issues will be sorted out soon. How long before somebody figures that out? Don't be surprised if Jobs isn't already on the case, (if he has the energy to do it). Hmm... who knows how to create innovative hardware plus a great interface? My bet is Apple shows the way.

Jim Courtright
Partner
Big Thinking By The Hour, Inc.
jc@bigthinkingbythehour.com