IBM’s view of the future of television

The IBM study — better pay attention

IBM Business Consulting Service interviewed 65 media executives for an hour each and has come to a conclusion that won’t surprise anyone who reads this blog: “This is the beginning of “the end of television as we know it” and the future will only favor those who prepare today.”

Our analysis indicates that market evolution hinges on two key market drivers: openness of access channels and levels of consumer involvement with media. For the next 5–7 years, there will be change on both fronts — but not uniformly. The industry instead will be stamped by consumer bimodality, a coexistence of two types of users with disparate channel requirements. While one consumer segment remains passive in the living room, the other will force radical change in business models in a search for anytime, anywhere content through multiple channels.

The tech- and fashion-forward consumer segment will lead us to a world of platform-agnostic content, fluid mobility of media experiences, individualized pricing schemes and an end to the traditional concept of release windows. Figure 1 illustrates the behavioral differences that will lead to the “Generational Chasm” between the passive mass audience (“Massive Passives”) and leading-edge users (divided into two sub-groups: “Gadgetiers” and “Kool Kids”).

I like this grid a lot (consultants are famous for grids). This shows the drift to the “open” and “involved” quadrant, the opposite of the passive and limited quandrant of the past. This is why the whole Media 2.0 thing is SUCH a threat to the status quo.

Broadcasting & Cable’s spin on the report is that, well, cough cough, IBM is a computer company, so what do you expect? Not wise, B&C. John Eggerton also writes that it could have as easily have been called The Beginning of Television As We Will Come To know It. He’s right, and I think we’d all do well to look at it this way.

Meanwhile, the reaction of Canadian broadcasters has been interesting, because the report says our neighbors to the north will be hardest hit. According to the Globe and Mail, the Canadian television industry is bracing for the worst.

Federal regulations that allow Canadian networks to earn the bulk of their advertising dollars by running domestic commercials on U.S. signals will be useless if audiences start drawing TV shows from the Internet, the report said.

The revenue from such advertising is the lifeblood of Canadian networks, often offsetting the cost of domestic productions and local news.

“That advantage will evaporate if alternate sources of content exist,” the IBM research asserts.

“Canadian-based content distributors will need to find compelling ways to bring the customer to them — and thereby, to their advertisers.”

According to the Globe and Mail article, Canada’s networks are wrestling with the issue of on-demand programming in Ottawa.
The Canadian Association of Broadcasters has asked the Canadian Radio-television and Telecommunications Commission to regulate video programming on cellphones, ensuring there is still room for domestic content and local advertisers.

“It’s about the fundamental business model that has supported Canadian television over the years,” said Glenn O’Farrell, president of the association, which represents CTV, Global, CHUM and other networks.

“The advertising model is very much being put to the test by these new technologies … The question is how effective will it be if Canadian consumers can also access the same programming from non-regulated sources.”

This run-to-the-government whinefest was brought to my attention by Bill Kinnon, my favorite Canadian blogger. Thanks, Bill.


  1. I’m a Canadian??? Why didn’t someone tell me. I wouldn’t have wasted as much time trying to figure out why I pronounce “out”, “about”, & “house” so oddly.
    Great post as usual, Terry.

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