Why Should the Industry Fear My Getting Roku?

We’re ending the summer soon, and with it what many TV viewers dread; the summer rerun period.  The interesting thing is that there are more options these days for summer viewing, and more are exercising them.  As a result, there are potential changes in TV viewing that could have significant long-term market impact.

I bought a Roku 2 last week to deal with my personal frustration over summer programming.  Since my interest runs more to documentaries, there are fewer channels available, and the networks have taken up the habit of switching shows between them and then running the shows as “new”.  This, in my impromptu survey of consumers, was number two on the list of irks following the protracted loss of new programming.

The combination of Roku and Amazon’s prime videos gives me a lot of material, and that’s the problem for the networks and the linear TV providers.  In TV or movie format I can find literally hundreds of series, probably thousands of hours of viewing, for documentaries alone.  The quality of the viewing is virtually indistinguishable from HDTV programming, without skips or pixelization.  So here’s the question.  Will I, armed with so easy an alternative to traditional TV, be willing to put up with the same amount of drivel in programming this fall, or more, or less?  You know darn well what the answer is.

Anything that breaks linear viewing habits is bad news for the networks, the providers, and even the network equipment vendors.  For a cable company, it asks them to pay for delivery of content that not only isn’t what they get paid for, it competes with what they get paid for.  Can they then continue to build out capacity?  The decline in viewing translates to a decline in ad revenues for networks, which means either less programming or more junk programming.  How many reality TV shows can we have, after all?  Storage Wars, Shipping Wars…what’s next?  Lawn Wars?

The NCTA is rolling out its TV Everywhere platform, and that’s a threat in its own right.  Yes, it helps tie streaming to linear delivery which mitigates some of the negative impacts.  But it encourages people to use streaming, to view on alternative devices, and to exercise personal choice rather than viewing “what’s on”.  All bad for linear, all bad for access.

All of this comes as the FCC’s report shows that while ISPs are more honest about bandwidth claims, only cable and FTTH can deliver broadband in quantity.  In the US there are no major providers of either that don’t rely on linear TV for profit.  So why bother saying that the US needs to encourage FTTH deployment when, at the same time, we’re adopting behavior that undermines the last profits in the fiber loop?

My point is that this is an ecosystem, friends.  We are all going to live in a future composed from the sum of our present decisions.  Networks’ quest for quick quarterly returns is creating a future that undermines their own position.  Consumers’ quest for something for nothing is going to undermine their own choices.  So do we have a network future with no affirmative choices at all?  The operators and the enterprises in our surveys are pushing investment back, deferring to the second half what they would have spent in the first, then perhaps pushing it into next year.  We are seeing the effects of short-term thinking and planning, an effect that first makes it nearly impossible to avoid major pitfalls in the evolution of the market and second nearly impossible to address major opportunities.  There is a future out there that we could as an industry still grasp, but we can’t diddle forever and expect the option to stay on the table.


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