What Might TV Business Look Like "After" the Collapse?

It is hard to ignore the potential danger to the traditional TV distribution business posed by Internet distribution. It is much harder to predict when Internet distribution will begin to disrupt existing business models, as the Internet has disrupted virtually every other form of media. As significant as the hurdles are, one probably would not bet that change can be forestalled forever.


Henry Blodget  apparently believes a change is imminent. "We still consume some TV content, but we consume it when and where we want it, and we consume it deliberately. In other words, we don't settle down in front of the TV and watch "what's on," Blodget says. 


Blodget isn't alone Consumer behavior has changed. Nor is Blodget alone in thinking something like a "wholesale collapse" of behavior already has occurred. What hasn't yet followed is a decisive change in content distribution business.


Earlier in 2012, for example, Accenture presented results from a new survey of consumer behavior indicating that that traditional television viewership is experiencing a "wholesale collapse."

The number of consumers who watch broadcast or cable television in a typical week dropped to 48 percent in 2011 from 71 percent in 2009, for example. Viewing on mobile devices are a major contributor.


In a typical week, 33 percent of consumers now watch shows, movies or videos on their
PCs, and 10 percent are watching such programs on their smart phones, Accenture found.


Blodget believes those changes will break the existing TV business. The prediction would not be unusual. That he believes a break is imminent is the news. At risk: affiliate fees paid by distributors to networks, network advertising, and revenue earned by just about everybody involved in creating content.

Also, "networks" will change. Netflix and iTunes will become virtual networks, displacing entirely many smaller specialty networks.

The cost of traditional subscription TV also will have to drop, he insists.


Users will have to get more for less, or they'll stop paying for much at all. The eventual price points aren't so clear. But a drop of half to 80 percent is not inconceivable.

Ultimately, the distinction between "TV" and other forms of video content will disappear, he argues. As other content industries already have found, that will wring all sorts of overhead out of the TV business. People in the business won't like it, but consumers likely will.

Is There a Social Media Bubble?

Whether you believe there is a social media valuation bubble, or not, here's a look at metrics. Run the other way if you hear people saying "it's different this time."
 

Faster Speeds, Clearer Plans Will Boost Mobile Broadband Usage, Ericsson Says

Some 40 percent to 45 percent of respondents from key global markets said they would use internet on their mobile phones more if they had access to better speed, a study by Ericsson ConsumerLab has found. 


The study also indicated that several issues, including 
1. network quality and coverage
2. data service pricing
3. how easy it is to understand the data plan


were key adoption factors, the study by Ericsson ConsumerLab, conducted in four countries and including more than 2,300 interviews in United States, United Kingdom, Indonesia and Brazil has found. 

Consumer Price Sensitivity Has Increased Over Last 12 Months

If the United States is in an economic recovery, it is an odd one, a study by Parago suggests. 


Consumer spending has not rebounded and price sensitivity remains a key behavior, the study found. In fact, shoppers’ sensitivity to price has actually increased in the last 12 months. Some 66 percent of those surveyed said price was the primary factor in deciding what to purchase, up from 60 percent last year.


This is due to the collaborating perception that their  purchasing power has decreased in the last 12 months, the study suggests.  "Consumers are digging further into the recessionist mentality and are fortified for a long winter of seeking out savings," the report says. 


Not every product is being viewed that way, though, one might conclude from Apple iPad sales. 

Can Regulation Actually Help Special Access Outcomes?

The Federal Communications Commission recently has been looking at regulation of special access prices, as always with a view to promoting competition. But economists at the Phoenix Center for Advanced Legal & Economic Public Policy Studies say in a paper that if the Commission continues to adhere to a geographic market that is “location specific,” which is consistent also with the position of those calling for renewed regulation of the services, then price regulation reduces economic welfare in all instances.

In other words, regulation cannot actually improve outcomes for the economy as a whole, even if it benefits buyers of wholesale special access from the underlying carriers selling that access. 


The basic problem is that in local markets, both sellers and buyers effectively are monopolists. The effect of regulation in such settings is mostly to transfer profits from seller to buyer, but every $1 of transfer costs more than $1 to society, so price regulation of special access services in location-specific markets unambiguously reduces welfare.


Obviously, the question of market definition will be critical in determining the path forward on regulating special access services; in fact, far more critical than the extent of competition, the Phoenix Center argues. 

Mobile Banking Faces "Chasm" After Early Adopters

Crossing_the_Chasm, Geoffrey Moore's book about the technology diffusion process, makes the point that there is a chasm between the early adopters of the product (the technology enthusiasts and visionaries) and the early majority (the pragmatists) whose adoption is key for any new technology to take hold in the mass market.

Essentially, Moore argues that technology adopters have very different values, requiring a shift of marketing emphasis at each stage of additional adoption.

Crossing the Chasm is closely related to the technology adoption lifecycle where five main segments in turn must be won over: innovators, early adopters, early majority, late majority and laggards.

That same process is at work in the mobile banking business as well. Fiserv argues that many banks and credit unions are on a mobile  adoption path that attracts the early adopters within  a year of offering the service, but the trajectory  stagnates to include just a small additional percentage  of adopters over the next two years.

That’s the “chasm” Moore talks about. Early adopters have embraced mobile banking because it is cool. The next wave of adopters actually will not see that as an advantage, and will resist.

To break through the “glass ceiling” of 20 percent  mobile banking adoption, Fiserv argues,
financial institutions must convince customers outside the pool of early adopters  that mobile banking will provide both convenience and benefits that cannot be experienced through other channels.


In other words, consumers must decide if mobile banking is: 1) useful, 2) accessible, 3) secure, 4) familiar and 5) easy to use. 


How consumers answer these questions will impact the adoption outcome.

Global Mobile Phone Shipments Slow, Economy the Reason?

The worldwide mobile phone market is forecast to grow slightly more than four percent year over year in 2012, the lowest annual growth rate since 2009, due to a sharp decline in the feature phone market and sluggish global economy.


According to IDC, vendors will ship a total of nearly 1.8 billion mobile phones this year, compared to 1.7 billion units shipped in 2011. By the end of 2016, IDC forecasts 2.3 billion mobile phones will be shipped to the channel.


The slow growth in the overall mobile phone market is primarily due to the projected 10 percent decline in feature phone shipments this year. Many owners of feature phones are holding on to their phones in light of uncertain job and economic prospects.


That is not to say consumer behavior always is a leading indicator. Often, consumer behavior is a lagging indicator. In this case, the lower demand for feature phones probably is more a response to declining economic growth.


Since the global recession ended in 2009, the world economy has been fueled powered by rising powers in the developing world led by China, India and Brazil.Now, all three are running into trouble. But Europe's obvious slowdown, threatening to become a renewed official recession, also is matched by similar concerns about the U.S. economy.