The future of television is a subject of great interest around here. Specifically, the technology used to deliver that content, how that content is accessed by consumers and how it is subsidized. Two things caught my attention and they both sort of fall under the same umbrella, though they aren’t specifically tied to one another.
1. Hulu has lost its way, mired by conflict between the comany’s leadership team trying to compete with Netflix and the site’s owners wanting to protect their pocketbooks and content. Hulu’s CEO, Jason Kilar, laid out his vision for television’s future and how Hulu can succeed.
We believe that there is going to be tremendous near-term innovation in the pay TV distribution business. The internet has made it possible for new entrants to innovate quickly and materially. Consumers will have more choice and convenience going forward. This competition will drive prices and margins down in pay TV distribution. A greater percentage of the economic pie will flow back to content owners and creators. As mentioned before, advertisers will be able to target their messages to people, not to TV shows as proxies for people. Going forward, rapid innovation, low margins, and customer obsession will define the winners in pay TV distribution.
2. We are now in an app-focused world for content delivery and cable companies are just living in it. They don’t understand that the old rules of delivering content no longer applies. But just because the traditional rules are no longer applicable, doesn’t mean that cable companies are irrelevant. They just need to change their strategies as well.