Unbundled TV = Internet TV

The FCC, the US government communications regulator is likely to step in soon to sort out an on-going row between tv networks and cable operators in America over pricing, especially as the hikes demanded by the networks will more than likely be passed on directly to the consumer. The FCC is much more pro-consumer than regulatory bodies are in the UK and has a great deal of clout.

The likelihood of any FCC intervention is the forced unbundling of channels which would be like an atomic bomb on the existing business model of paid-for television. The further international impact would be that as the USA leads, the rest of the world would follow….and I think that this would be a good thing!

In the UK, gone would be the minority channels such as Discovery Shed, Men and Motors, GOLD, the ‘+1’s’ repeat channels, limited broadcast schedule channels etc. and in would come probably fewer channels but higher quality content and less repeats. The reason for this would be the need for a unique draw as competitiveness would increase. The big winners would likely be the sports channels as these always sell well and the relative cost for these would drop as they were previously only available as part of a bigger bundle. However, there can be little doubt that there would be a large number of casualties.

The cost of broadcasting would also go up as the route-to-market providers (satellite transmission providers, cable companies etc.) would seek to recoup the lost income from the missing channels by driving up prices. However, advertising re-sale would be more valuable as fewer channels would control more eyeballs. The wider impact of this is likely to be that a number of channels will move to internet based television options – either directly through their own websites or via networks such as YouTube (see my Indian Premier League cricket post).

Internet tv is cheaper to produce, broadcast and maintain and 100% of revenues generated would go to the content creator – an incredibly appealing business model. With more and more devices networked to receive internet broadcasts including mobile phones, blu-ray players, ipads, ipods and network streamers, the accessibility of internet tv has moved beyond home theatre pc’s and gone mainstream. Even games consoles are in the mix with Sky’s channels now available on the Xbox 360.

Is seems inevitable that this will happen and the impact will be massive – a fundamental shift in broadcasting and if it comes to the point where television is delivered over your internet connection, necessitating a need for hat is in essence an always-on pc in your living room, then people will have no problem moving everything over this network too. Therefore telephone companies, radio networks, even gaming providers (see the impact of OnLive) should be fearful as well. The pc will be the even bigger doorway to the digital future and its primary weapon will be the internet.