Huffpost Technology
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

John Backus Headshot

The Future of 'Television'

Posted: Updated:
TV SET PARENTHOOD
AP

Have you looked at your cable bill lately? Mine is $240 a month. Ok, take out $40 for Internet service and $30 for phone service, and I am paying $170 for television in three rooms, with all of the attendant cable box rentals, DVR fees etc. For what? How many channels do we REALLY watch each month? With a family of five, I can name twelve channels that even see the light of day. And, except for live sporting events, my teenage boys have not watched cable TV shows on the "television set" for years. They get everything they want online on their computers.

So what "is" television?

To many, it is the big screen in the living room. To others, it is over the air broadcasts by the major networks. Many more see it as 500+ cable channels on demand. And then there is your cable company's DVR, Hulu, AppleTV, Netflix, and Tivo.

Television is about the content - not the TV set or the cable box or the computer or the iPad. And the concept of television is fundamentally changing, so as a venture capitalist actively investing in digital media and technology, this is a big deal.

Take a look at some major developments so far this year:

- Netflix was once viewed as an invincible Wall Street darling and the stock has nearly fallen off a cliff as it struggles to evolve its business model. But it realizes television is about the content so it continues to pay up to acquire premium television content for its streaming service.

- Hulu was for sale and then it wasn't.

- NBC Universal was formed by Comcast and GE.

-Amazon launched a streaming service and is offering it free to Prime members

-Google introduced YouTube channels to organize video content

-HBO, ABC and many others introduced dedicated iPad apps for users to stream their shows. Comcast and Verizon followed suit with a subset of their cable offerings streamed anywhere, anytime.

-In just the last week, Dish Networks is rumored to be exploring a radical change in its delivery strategy as it struggles to retain subscribers

Live sports are the only programs propping up the cable companies today. Everything else is becoming available, rapidly, by the show or by the channel.

The industry is changing before our eyes and this kind of innovation creates winners and losers.

The losers will be the content aggregators and delivery companies - the cable and satellite operators - who are slow to unbundle their offerings. The losers will also be the 500+ cable content channels that don't learn how to market directly to consumers - instead of collecting a small fee from every cable TV bundle subscriber.

One winner? Apple. No longer will consumers be forced to overpay for a one-size-fits-all bundle of channels and services they don't use. Unlike the others in this space, Apple has the hardware distribution clout to pull this off, with its installed base of iPod touches, iPads and iPhones,

My prediction: You will be able to buy television by the channel. You will be able to watch it live, or watch it from the cloud using live streaming for any channel any program any time slot over the last 30 days. ABC, NBC, CBS, Fox for $1.99 a month. CNN & Fox News for $.99. Discovery, National Geographic, Sprout, BET $2.99. ESPN? Maybe $4.99.

My monthly bill under this scenario? Down from $170 to maybe $50, with Apple and other new intermediaries getting a healthy 30% cut. Better yet? I will be able to watch these "stations" either as stations or individual shows on my home TVs, my iPad, my Mac or my iPhone. Wherever I am.

As venture capital investors, we are seeing a lot of interesting companies in this space. While I don't believe that an upstart will beat out Apple or Amazon or Netflix in the television content delivery arena, I do think there are opportunities for entrepreneurs. Think aggregation of user generated video. Assisting those 500+ cable stations in their new efforts to acquire individual subscribers. Helping advertisers reach consumers one at a time instead of via cable networks. What else? Weigh in, in the comments section, here.

From Our Partners