Thursday, March 19, 2015

Spoilt for choice

The recent announcement by Apple that they plan to "go big" in the delivery of content to the consumer adds them to an impressive list of entrants into the once limited arena of broadcasting.

The scarcity of broadcasters due to very high infrastructure costs led to high concentrations of audience across a limited number of distribution platforms.

Today we see organisations as diverse as Tesco, BT and Amazon in the space rubbing shoulders with the pirates in competition for eyeballs.

While Google do not at first glance look to be a broadcaster the combination of the search capability distribution through YouTube and monetisation via adsense and adwords make them a very powerful player indeed.

Given the crowded nature of the space what are the driving forces behind the decisions to invest capital ?

One possibility, quite remote admittedly, is corporate boredom. Media seems sexy and maybe getting involved in the sector gives the opportunity to "hang out" with some hot actresses or actors and after all - how hard can it be ? So get the bean counters to massage the ROI, hoodwink the board. and happy days. Just make sure you are gone before the budget to actual revenue recon takes place.

More plausible is that in a converged world there are very few differentiators and exclusive content that really engages the audience is one of them. Once the audience is "hooked" other services can be bundled - or so the story goes.

Perhaps the winners will simply be those who can afford to lose money for the longest - a bit like the airline industry. One that basis this is a perfect move for Apple and its $178 billion cash pile.