Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now


Digital Media’s Global Warming

The Frequency of Disruptive Events in Media Seems to Be Increasing. Anomaly or Trend?

The Frequency of Disruptive Events in Media Seems to Be Increasing. Anomaly or Trend?

Hardly a week passes lately without some emerging digital media business announcing that it will take the marketplace by storm.

New services proliferate at a frightening pace, but like the wind, these are often nothing more than the same hot air being blown in a different direction. A lot of what passes for progress in the digital media world doesn’t really offer consumers any new services, but simply changes which entity provides them – and for how much.

In this respect, telephone companies have been the Gulf Coast poster children of digital media, suffering one storm’s landfall after another recently.

Think back to the 1990s, when the flat-rate local service that telcos had worked hard to provide – based on an assumption that most local calls would be of short duration – was leveraged by consumers for very cost-effective dial-up Internet access. All the statistical models the telcos had used to predict their switching center requirements and profit margins were blown out of the water by so many customers making unmetered local calls to their ISPs and staying online all day.

So the telcos patched their roofs and opened some ISP storefronts themselves, which worked well for a season or two. Then they got some government assistance and moved to the long-distance enterprise zone, where they could sell metered service again.

But just when the telcos thought they had adequately shored up the levees, along came Hurricane VoIP and they were back under water even deeper than before.

Now the telcos are asking the Feds to declare another state of emergency in their area so they can try IPTV. Will they get the help they need in time? And will the next storm season treat them any more gently?

Meanwhile, the same winds have blown more favorably onto cable TV’s shores, where the old TV retransmission paradigm was enhanced by access to exclusive content, more efficient digital delivery and PPV/VOD/DVR, alternative telephone service, HD channels and high-speed Internet access. Now this so-called “triple play” (TV/voice/data) has brought sunny skies to the land of coax – but will clouds eventually darken the horizon there, too? Will a revitalized telco industry steal back some business from cable?

And what of satellite TV? Will it continue to stay above it all, or will it experience its own rain fade from the IPTV squall?

As with any economic development, a lot will depend on what happens in DC. So far, everyone talks about telecom reform there, but no one seems to do much about it.

Your local forecast

The broadcast industry has not been immune from heavy weather, either.

Commercial television is riding out Typhoon TiVo, which is challenging the broadcast business model of time-based viewing and the interstitial advertisement. TV broadcasters will have to build new shelters that provide reliable revenue streams impervious from the time (and place) shifting that the new digital climate has brought to their latitudes.

Radio has its own challenges, of course, mostly from new competition. The satellite radio gale continues to build offshore, but will it reach Category 5? And will satellite radio’s subscription-based, national-service model keep it from ever making a direct hit on terrestrial radio’s coastline, such that even with increasing intensity it won’t inflict serious damage? Those upper-level steering currents are hard to accurately predict, of course, but terrestrial radio could harden its targets with increased local content and reduced commercial loads in the meantime.

Internet radio and other emerging online media platforms are developing depressions on the map that bear watching, but these are items that broadcast radio can do something about by launching their own competitive services in the space. A little investment in tropical cloud-seeding today may pay strong dividends later. The handheld and mobile phone device market seems to be heading over the warmest water right now, so broadcasters should keep close track on its path. It could turn into a real tempest, or it might just blow over. It could also spawn some tornados that inflict heavy damage in limited areas while leaving other zones untouched.

Well, I’ve probably pushed this metaphor far further than good taste or proper meteorological practice would allow, so you have my apologies. Let’s leave it at this: In a media world where disruption seems to have become the norm, terrestrial radio looks like it might prove to be a pretty safe harbor after all. But I’d still keep plenty of duct tape and plywood on hand.