Friday, April 03, 2009

IPTV v. Internet TV -- What's a Cable Company to Do When Content Wants to be Set Free?

The debate over who will "win" the battle between IPTV v. Internet TV when it comes to premium "television" programming rages on.  

First, the terms "IPTV" and "Internet TV" are highly confusing.  Blogger Robin Good provides an excellent detailed explanation of the significant differences between the two, because they represent vastly different approaches to delivering premium video content to consumers.  But, at a high level, think of it this way.  "IPTV" represents a closed, controlled-access form of video content delivery very much akin to cable TV today -- essentially a "walled garden" approach in which cable companies and others of that ilk define the video programming available for their customers.  "Internet TV", on the other hand, represents an open form of video content delivery via the consumer Internet in which consumers can essentially search and find the video programming they want (think of YouTube and Hulu).

Which approach will win?

As you can imagine, the cable companies -- and most of the major media/vide programming companies for now -- are fighting desperately for the IPTV approach, as it preserves their lucrative business models that preserve the current system of video production and distribution that we have known for years.  Internet TV is a direct threat to their business models of controlled access.  That's why IPTV will win the day in the short term.

But, the world of content wants to be "free" -- free as in open and available to all.  This does not mean "free" in the sense that it cannot be monetized.  Haven't we learned that already with the music industry?  Haven't we learned that with the world of technology itself?  Closed, proprietary eco-systems simply do not work.  In the world of "walled gardens", consumers will find ways to climb over those walls -- including, the peril of piracy.

"Preventing people from watching any shows online, unless they subscribe to some multi-channel service, could be viewed as both anti-consumer and anti-technology, and would be something we would find difficult to embrace."

Now, THAT's what they say is a spicy meatball!

But, he's right.  He has to be right.  This is how the world of "TV programming" will be.  Certainly not now.  Nor in the near-term (or likely even in the mid-term).  But, highly produced high quality TV programming will be distributed ultimately just like any other form of content -- directly to consumers via the consumer Internet.  In other words, Internet TV.  And, consumers will flock to "search" services that most easily enable them to find the video programming they want and when they want it.  And, this Internet TV mode of video content distribution must and WILL be monetizable -- in a variety of ways -- through ads, through subscriptions, and through direct purchase.

What does this mean for the cable operators and the major media companies who produce premium video content?  In a word, "disruption" -- as in disruption to their current business models.  Radical disruption.  Those that "get" this now, will benefit in the long-run and prepare for this inevitability.