Mark Cuban thinks cable will continue to be the dominant platform for TV. He makes some compelling arguments, but he’s wrong on one account: Personalization. Cable’s one-to-many distribution technology makes it a very efficient way to distribute video, but it fails on personalization, and that is the Internet’s killer app for both consumers AND advertisers.
In a world where all the world’s video content is available on embeddable Hulu-like sites, really creative people and companies will create technologies that give us the convenience of TV with the personalization of the Internet. You might watch Joe’s Channel one night, Jane’s Channel the next, and CNBC’s during the day. More powerful systems will give you Pandora like stations. Choose a genre (comedy or sci-fi or action) and get a personalized stream of tv episodes and movies chosen specifically for you. The point is technology moves towards convenience, and Internet TV has the ability to give it to us in personalized ways.
One of the big reasons newspapers are dieing is not because every one of their old subscribers decided to follow them online; it’s because many of those subscribers DIDN’T. The NY Times used to be able to depend on the fact that if you want 10% of their articles, you would be willing to consume all 100% of their paper. Now you find those 10% through links from thebusinessinsider.com, Twitter, or maybe Veritocracy, and the other 90% comes from other papers and blogs. It’s personalization from increased choice (even to make less of them sometimes!) that is the killer app of the Internet, and the reason old distributions platforms will fade away.
The beauty of this transition is that personalization also enhances the experience for advertisers. Combine all of the information about you on Facebook, with the complete history of EVERY tv show and movie you have ever watched, maybe even what you’ve purchased before, and what web sites you visit, and all of a sudden that 15 second ads becomes exponentially more effective. In fact in a world where ads are so much better targeted, you can show less of them, which means people are more likely to actually pay attention.
None of this is easy, but there is nothing technologically that cable will be able to do, that the Internet eventually won’t. The same is not true in reverse. And while Mark does make a good point that standards for video monetization have not progressed quickly, there is enormous economic incentive to do so. Anyone (include some big companies like Facebook and Google) can work on this right now - and many probably are. It’s a big technical challenge, but if i had to bet on either a few cable companies, or millions of entrepreneurs getting there first, my money’s on the latter.
We’re still at least a couple years away before we start really seeing this happen first hand. And I dont fault cable companies and content providers for maximizing large, exisiting revenue sources. BUT and this is the big but, the trend is there, and it will only continue to gain steam. The decision content owners (and cable operators) have to make, is whether they want to stay ahead of that trend and try to exploit it, or fall behind and watch others do it instead.
More Perspectives: Will TV Over the Internet Challenge Cable?
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