We've heard it for years. We've heard that it's only a matter of time until we can finally say goodbye to the content providers that we love to hate. Over the air TV just isn't enough, so we bow to the cable and satellite providers that supply us with hundreds of channels. Most of us are fed up that we have to purchase a lot of content that we don't want. Imagine going to the grocery store and having to purchase extra items you don't use in order to get the products you want? We do it with our satellite and cable companies, but is all of that destined to change?
Is Apple the Answer?
The technology rumor mill has been abuzz about Apple possibly entering the TV market. The reported iTV is rumored to be a TV with an iTunes-style interface that would allow consumers to pick the content they want. Some media analysts point to what Apple did to the mobile phone industry as the reason it isn't likely to happen to the TV industry anytime soon. According to CNN, Apple wants to supply a set top box and take 30% of the revenue from the sale of apps, movies and other content. This would leave the cable companies to supply the networks and service the boxes. In an industry that has rejected past attempts at change, the late Steve Jobs' proclamation that he had solved the TV content problem may have been premature.
Even if Apple isn't the answer, statistics show that people are growing tired of the traditional model. Business Insider reported that only 16.9% of the newly formed households signed up for traditional cable and satellite TV in 2010, and that number continues to fall. In 2004, the number of people with only wireless cell phone service was too low to measure. By 2011, almost 30% of households had cut the cord on traditional phones. Things can change fast, and that might be what is about to happen.
Are we tired of traditional content, or is it the delivery method that we want to change? The Kaiser Family Foundation found that children aged eight to 18 spend four-and-a-half hours per day watching TV, while kids aged six to eight watch 28 hours per week. The average adult spends 34 hours per week in front of TV, according to the New York Times. Statistics show that Americans aren't tired of the content as much as the way they are weary of the way they receive it.
Is the Breakout Finally Here?
Most believe that the future of media content delivery will move from traditional TV sets to tablets, laptops and other mobile devices as more people demand content regardless of where they are. The Internet is now fast enough, WiFi now widespread enough and the advertising models are evolved enough to make watching content away from the TV viable. Sites like Youtube and Hulu have made large steps forward in the way they display ads so traditional media companies can still profit from broadcasting content online. Although still in its infancy, some companies are producing feature-length content solely for online viewing.
What About the Providers?
Consumers are still demanding more choices in their bundles. They don't want to pay for hundreds of channels they will never watch. Instead, they want to create their own bundles. If purchasing programming a la carte was as cost effective as purchasing music in the same way, many believe that this model would take off.
The Bottom Line
It isn't that easy. The relationship between studios, the cable and satellite companies, and consumers is complex. Making an "everybody wins" model has proven impossible so far, and that's something that no amount of technological innovation can combat. Until a new business model is invented, companies like Apple will likely have a hard time evolving the cable and satellite TV model.