The Internet and Apple dramatically changed the music industry without its permission. A similarly dramatic change is now taking place in the video entertainment business, and I would argue that industry is also struggling with how to reshape its business model in a way that maintains the value of its content.
After years of denying the financial impact of cord-cutting and cord-shaving, pay-TV providers and big content companies are now devising their own plans for taking content more directly to the consumers that need it. HBO, CBS and even Verizon Communications Inc. (NYSE: VZ) are jumping on this bandwagon, among others. (See HBO Will Go OTT in 2015, CBS Takes OTT Plunge and Verizon Crafting OTT Business Models.)
So what does all this have to do with The New IP? Plenty.
Consumers are increasingly seeking and getting greater control over what they watch, how they spend their time online and how they want to pay for it. The notion of highly personalized services -- something that has been kicked around for decades now -- seems finally within reach, as more content is cloud-enabled and able to be delivered on demand.
The on-demand world will be more heavily dependent on network connections that can deliver high-quality, high-bandwidth content for however long is necessary -- often in short bursts -- and do it efficiently and at reasonable cost. Oh, and then there's the ability to bill for that bandwidth on a flexible basis, depending on the business model of the content provider and the network operator and the subscriber status of the recipient.
To be fair, there are still tricky business model issues to be resolved. When Comcast Corp. (Nasdaq: CMCSA, CMCSK) "upgrades" my DVR service to make it impossible to accurately record The Good Wife when its time slot is affected by a late football game, do I really want to use CBS All Access to get that content, effectively paying twice for the same show?
No, probably not. And that's where wily broadband service providers may be able to step up. It's the broadband connection that counts -- whether wireless or wireline -- and if that network can connect me to the cloud of content for which I've already paid (no pirates need apply) in a secure way that lets me watch where and when I want on any connected device, then I'm happy, and so are a lot of other consumers.
Is this a substantially different business model than exists today? You betcha. And that's why my connected cloud of personalized content won't be available any time real soon. But it's coming. The only question is, who will provide it and whose network will be ready to deliver it?
— Carol Wilson, Editor-at-Large, Light Reading