May 5, 2011
The time is coming when we think of the TV as just another monitor in the house and screen in our lives. Ever since WebTV took the stage back in the 90s, there has been a battle for owning the living room.
Back in the 90s, before smart phones, YouTube, and social media, the living room was pretty much the only place to consume video content. Fast forward 15 years, and while the battle hasn’t progressed that far, it’s worth considering how much value remains in owning the living room itself.
For the next 5-10 years, the living room will continue to be the dominant location to consume content, but what about 10-15 years from now? The living room has fundamentally not changed much in these past 10+ years. The cable companies (and now telco providers) stick a box in the living room and they own your customer experience. WebTV went by the wayside. More recent attempts such as Google TV have also not gained consumer traction. Thus, it’s clear the battle of the living room is still going to play out over the foreseeable future, and if it takes another 10-15 years to see any progression, it makes you wonder if the living room will be all that important at that point.
Of course, I’m referring to Internet-distributed content here. With services like Netflix and Hulu, consumers can make any place their living room, inside or outside the home. Even the cable companies are adopting “TV Anywhere” initiatives to protect their ownership of the consumer, who is apparently itching to “cut the cord”. However, the evidence of cord-cutting is slim at best at this stage.
Traditional cable will continue to have the advantage as long as they can continue to provide eyeballs for the networks, who pay dearly for content creation and access to the cable audience. A prime example exists with the lucrative deals the networks sign with the major sports leagues. They can afford to pay insane amounts of money because of the wide audience they get on cable, where ad revenue is much more profitable vs. online. Thus, there is limited availability of sports content (legally) online. Unless live sports and news are widely available online, the cord-cutting phenomenon will remain more hype than harm.
Over time, you can be sure that these live broadcasts will make their way online. There is no stopping it. Consumers are a lot more demanding now in a world of anywhere access. Not only do they want the programming they want, they will dictate where it gets consumed, rather than having to consume it on a TV in the living room.
ESPN has already embraced online delivery through ESPN3, though with limited content. In the future when all content is available online, what will be the significance of the living room? As a general population, more family members are working to keep up with increased standards of living, leaving more chores/activities to be done and eating away at leisure time spent in the living room. Content will be more regularly consumed as moms and dads wait around for kids’ practices to conclude, while teens will be on their computers using social services like GetGlue, IntoNow (acquired by Yahoo), WatchParty, etc. to “watch” programs with their friends.
While the battle of the living room is currently owned by incumbents, by the time new entrants make a dent in their domination, consumers may have already gotten off their couches.
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