TV Party

I enjoy a traditional Christmas, where I spend all day eating and drinking and watching television. But whilst firmly stuck in the armchair, flicking between channels on my remote control, I discovered a truly wonderous tv channel amidst all the infomercials and reruns. Information TV is hardly going to get big ratings. A kind of public service channel, its content seems to be anything that a “public” body might have gone to the trouble of videoing and would want the public to see. In other words, it is the kind of outlet that would show the recording of some stuffy “conference” (in other words, a room with about 100 people listening to a few people at the front) on media convergence hosted by Ofcom. So there I was, spending my Christmas watching Arun Sarin and James Murdoch being remarkably rude about the poor old regulator that was their host and was sat right next to them. When they briefly paused to stop bashing the regulator, Sarin and Murdoch actually said relatively interesting things. In a roundabout way, they said that the party was over for their business models, or at least would be very shortly in the developed world. Presumably this is one of the reasons why Vodafone and News Corp are driven to build a presence in India and China. In short, what they talked about was that:

* communications products are all a commodity (Murdoch)
* eat all you want voice was inevitable in the next few years (Sarin)
* video over 3G is a niche product, broadcast tv over mobile is coming soon
e.g. the new DVB-H service Sky and Vodafone are offering in Italy (Sarin)
* user-generated content like News Corp subsidiary’s MySpace makes traditional public
service content generation much less important (Murdoch)
* regulators are useless fools and society is better off without them (both)

Looking past the hubris for a moment, though, I found it all very revealing. What they said was that their business models were ultimately stuffed. In other words:

– 3G was a costly mistake: in a commodity market there is no “killer app”
– the only way to make money is through content
– the market is fragmenting because of easier entry for contect creators and distibutors

So their business models, in the longer run, depend on being the preferred (or unavoidable – if the regulator lets them get away with it) middle men in the distribution of content from creator to consumer. But why does the consumer need the middle man? After all, I was watching information tv via Sky’s satellite, but I could have been watching it through a live stream over the internet. The content I was watching was, after all, extraordinarily niche. Past the 100 people in the room, who else but me would actually want to watch this kind of content? In short, anybody with a camcorder is now a potential one-man tv studio. Thanks to NYPD Blue it does not even matter if the camera shakes a bit whilst they hold it.

The last big eruption in the Do-It-Yourself art ethic was in music with the arrival of the punks. Suddenly a lot of fairly talentless people took things into their own hands, formed their own labels and started pressing their own records. Some of them were not so talentless. Some of them sold out at the first opportunity. Ultimately, the music scene settled down and the big companies were able to absorb the movement and even make it profitable for them in the long run. Now the same thing is happening with video. It is one big TV party and everybody can crash it. The question is, will it succeed where the punks failed and leave a lasting change on our culture? Or will we wake up afterwards with a mightly hangover to find we are still in bed with the Sarins and Murdochs of the world?

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.