Posted by: Richard | January 29, 2010

The Current State of Television

We were fortunate enough to have the former CFO of one of the largest UK television channels in class yesterday to discuss the media revolution that has happened in the last decade.

He described the challenges of the television industry right now, with increased competition (through internet, satellite, dvd’s, TIVO, other channels) and declining revenues from television advertising.  He painted a bleak picture as free, on-demand, no commercial easily beats typical television services that require viewers to pay a subscription, watch commercials and be limited to what is scheduled.

However in this bleakness there are some surprising bright spots.  People will endure commercials for live events (specifically the talent shows and sports).  In addition, for long-running sitcoms, people will also endure commercials.

The motivations behind these two groups of people are very different though.  For live events, people don’t want to miss out on what happens, especially as their friends are texting them in real-time to discuss the event.  It is a very collaborative and interactive viewing experience that cannot be replicated watching it on TIVO or online after the fact.  In contrast, long-running soaps maintain healthy audiences watching on television, even though the plot is the same over and over again and online viewing options are easily found.  These viewers are using television almost as a distraction to their life and a way to easily fill up empty time.  Viewers don’t begrudge the commercials, as they have nothing else to do.

Where does this leave the future of television?  It strikes me that the future of television is going to become more interactive, specifically as the only advantage TV has is the wide-scale interaction amongst people due to the scheduled nature of the product.  I can watch any show I want online on my schedule, however what television offers is the ability to interact with a mass market.  In some cases, this interaction will be with friends based on a dynamic event like an ice hockey game or a talent show.  For those watching TV to kill time, I think there is a tremendous opportunity to connect the audience together to greatly improve the quality of the viewing event, make it more social and instead of just killing time, transform it into spending time with friends.

It is clear to me that the future of television has to change rapidly with a new business model being required moving into the future.

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