Rogers Cable, Shaw Cable, Bell TV (formerly Bell ExpressVu) and Star Choice – Beware of the Killer Internet

Is Future More Local? More Free?

Is Future More Local? More Free?

Whenever I start to think about the future of media technology, production and distribution I tend to look for analogies that can be mapped onto emerging and future scenarios. Amongst the mess created from the two satellites that collided over Siberia and the internet talk relating to space junk, a post titled “Satellite Diss” by By Farhad Manjoo on slate.com almost got lost in the debris. However after reviewing it this morning it provides an analogous base that supports my own personal viewpoint on the future of media and its distribution.

“Satellite Diss” is an article on Sirius XM Satellite radio and its current business problems. After reading it I can’t help but think it provides some fodder that can be mapped to other distribution media. It’s also something that we as consumers and the Canadian Cable and Satellite TV providers need to consider as it appears that consumers are speaking about what they are willing to pay for in a changing world related to new and networked based media devices.

According to the “Satellite Diss” Sirius XM has some business challenges. The company is unable to meet a $175 million debt payment due at the end of the month, the company has more than $3 billion of debt and it has hired bankruptcy advisers at the same time its been talking to satellite TV companies about a possible takeover.

The report goes on to note that “Like print newspapers, travel agencies, and record shops, Sirius XM offers what seems like a pretty great service—the world’s best radio programming for just a small monthly fee—that has, in practice, been eclipsed by something far cheaper and more convenient: the Internet.”

Napster, Internet and iPods Have Changed Everything

Napster, Internet and iPods Have Changed Everything

Farhad Manjoo’s article goes on to point out that with the advent of Napster people got used to getting every song on demand. While Sirius and XM offer a multitude of specialty music stations, much of their business model was also tied to  exclusive acts such as Howard Stern. Personalities were used to convince customers to pay $10 or more a month for their radio service. However when Apple released their iPod MP3 player, and MP3 playes became mainstream, they proved to be the killer app that worked against Sirius XM. Even though the iPod itself couldn’t receive any radio signals, it could connect to a home computer and access a wealth of free radio content from the Internet. With the combination of Napster and Apple’s iStore, Consumers got used to downloading their content and the Dye was cast against subscription radio services.

I have to say that I have to agree with Mr. Manjoo’s assessment. In my case I just purchased a Hyundai Sonata. It came a three month free subscription to Sirius XM and an auxiliary input port to the cars radio system. The auxiliary input is built with an iPod interface as well as a stereo mini connector that will accept any other MP3 player’s output. When my wife and I saw that the subscription rate was $14.99 per month for the XM service we immediately saw much more value with the MP3 player interconnect. We can purchase an awful lot of MP3 players vs the $180.00 a year XM subscription cost.

The Power Of Radio Is Local

The Power Of Radio Is Local

But its not really the money. Like a lot of people I feel the real value in radio is with local news and information. In Canada free over the air Radio has made a real financial comeback based primarily on a local, local, local –almost narrowcast– mantra. And for me, while driving and listening to radio I tend to stick with information based Radio stations longer than music based stations.

“Satellite Diss” goes on to point out that the Internet doesn’t have to be the death of Sirius XM. It assumes that the company can get its debt in order and that if it does, the company might actually discover that the Internet can be its savior. Given that Howard Stern’s radio show is one of the most pirated programs on the internet, Manjoo’s advice is for Sirius XM to figure out a way to get it to the largest possible audience at very low prices. He asks the company to forget about their specialized hardware and move to making the service available  to every Internet-connected device on the market. Given the companies current situation this seems like sound advice.

In my Rogers Cable – Beware of the Killer Rabbit (Ears) For Free Over-the-air Digital HDTV post to this blog I pointed out one aspect about the free over-the-air experience. Jeffrey Breen’s positive experience reinstalling an over-the-air TV antenna system in his mothers home surprised him. Once it was completed and he saw the results, he started to question the value of a basic cable subscription. This is similar to XM’s subscription based model, its competition with free over-the-air local radio and free downloadable Internet content. In the case of the “Satellite Diss” post, not only does it question the viability of a subscription based business model but it questions the long term viability of “exclusive content” through closed channels being the savior of big media.

Internet Connected Home Media Centres

Internet Connected Home Media Centre

I contend that given the pervasiveness of home based IT networking, it wont be long before we see the Media Center equivalent of the iPod delivering Internet sourced visual media on a mass scale. In fact it’s my belief that this kind of content will soon hit mainstream, if it hasn’t done so already. After all how long will it be before we see cable and satellite TV subscription packages like newspapers, travel agencies, and record shops are now viewed in the Internet age.

All of this activity plays to my belief that free over-the-air media, coupled with Internet delivery, is the future of media delivery. Hence it’s despicable to me personally that free over-the-air TV gets such a rough treatment in Canada. It comes from everywhere including the companies that own the stations broadcast stations themselves. There is almost no public discussion from them on picking up free Digital HDTV television over the air and they even dance around the issue of updating their analogue transmitters which is the basis of their business model.  In light of an August 2011 shut off date of  analogue TV in Canada, I can only attribute the lack of public debate to the fact that a growing number of Canada’s free TV stations are owned by the same companies that own our countries Satellite and Cable TV distribution companies. Given that those BDU’s business model is based on charging for TV delivery one has to wonder how committed they are to the concept of free over-the-air TV. I’ve yet to see any champion among them.

To conclude I invite you read an article by Michael McEwen. It’s in February’s Broadcast Dialogue and its titled In Search of the Holy Grail. In it McEwen talks of the sad state of of Canada’s conversion to free over-the-air HDTV and the lack of its focus on Canadian consumers. While the article speaks of a lack of Government leadership and on some aspects of Canadian Content, I can’t help but think it’s also missing the points I outlined in this post. That being the strength of free over-the-air HDTV coupled with the strength of Internet delivery, over that of subscription services touted by Canadian “big media”, is the cornerstone  for future media delivery.

Whatever you believe I feel McEwan is correct about one thing. The consumer is missing in whatever little debate is going on in Canada on this crucial subject. Given that the future of our television system appears to be driven by the Marketplace –a big point in McEwan’s article– I guess in the end we’ll have to vote with our wallets… And we’ll probably have to vote against this through the various BDU’s by simply saying no to their subscription plans. Isn’t that a great way to define Canadian social policy…..

….brad….

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2018: Life on the Net…. A Video

This panel at Fortune Brainstorm titled “2018: Life on the Net” caught my interest. The 19 minute video (below) was moderated by Quincy Smith, CEO of CBS Interactive. On the podium was Lawrence Lessig, professor of Law at Stanford Law School, Joichi Ito, CEO of Creative Commons and Chairman of Six Apart Japan, and Philip Rosedale, founder and chairman of Linden Lab, (Second Life.)

Thoughts from panel included;

  • MIcro-payments not working
  • Media just starting to work
  • Ignorance within government on how Internet works leading to the application old style corrupt culture being applied to it
  • Government waiting for something bad to happen to the internet so they can come in and take control of it
  • Economy shifting in media production because of Internet
  • Influx of Money from Capitalism and Venture Capitalist can take stupid forms on the Internet
  • Concept of big centralized company will be less prevalent than it is today because of the collaborative and shared nature of the Internet
  • Government and Academic research will open up to be more Open Source
  • More 3D data and adoption of gaming style software interfaces

Enjoy ….brad….