Monday, July 01, 2013

TV Consolidation Is A Tough Act

With Ericsson buying UK television services company Red Bee Media, the consolidation of the TV services sector continues apace.

Cisco and Intel have both made major plays for this sector, although Intel's new CEO seemed to hesitate at putting his weight behind a content based strategy.

The thing is, producing and distributing TV is no longer the complicated business it used to be. Sure some legacy technologies are still playing a key part, but as we proved with Narrowstep as early as 2002, you can build and run television services in the cloud. Indeed, with the cost of the alternatives, you'd be crazy not to. Despite a dominant position in post production, Avid has failed to turn in any kind of value for its shareholders for years, and set top box wondurcompany Tivo is little better.

This is a highly fragmented market where existing billing relationships and the delivery technology chain still have some intrinsic value, but it's also a small market.

The trouble is, it's easy to disrupt, and services that used to command a premium often have no value. YouTube and Netflix have proven this. A company like TV Everywhere has more global distribution clout than and 20th century broadcaster.

And we're encountering more and more companies that are capitalising on this, companies that come from the content end of the market, who are well placed to understand the place that programming plays in the delivery of service.

In a dollars to cents world, business is going to remain tough for the likes of Ericsson.