Saturday, June 21, 2008

Media convergence and divergence

Technically, it's game over.

There's no reason why a box like Roku's Netflix box [reviewed here] couldn't be used to deliver current TV shows, live events, premium cable content, whatever. And in fact, it looks like you can get just that kind of service from DSL providers (well, maybe you can -- it's not available where I am yet). Boxes like Apple TV are also in the mix; the streaming aspect is there, albeit downplayed.

There are some concerns about bandwidth on the backbone, but Cisco says it's manageable, and they're allowing for a sizable chunk of peer-to-peer traffic, which may (or may not) become less of an issue if people are happy with what they can get directly from the providers. If I can see a given movie anytime I want as part of a $10/month subscription, why would I hassle with copying it peer-to-peer? But maybe that's just me.

So somewhere around now, give or take a couple of years, is the point where in major markets it's technically reasonably easy to get all the media you want via the net, media meaning audio, video, phone (i.e., two-way point-to-point audio) and the web. At some point not too much later than that point -- again whether it's already happened or about to happen depends on your definitions -- it's all available in a mobile environment. Just take a more-or-less broadband mobile connection and use it instead of your wired connection. QED.

Technically, media convergence is here, and if technology were all that mattered we'd be about done. For better or worse, however, technology is only part of the show, and often not the part in charge. In this case, the real drivers are two divergent views of convergence: the consumer's view and the providers' view.

As a consumer, I want a complete mix-and-match free-for-all with the flexibility of the "pocket-thing" scenario. I can get my bits delivered any way I like and don't care which particular means is in effect at any given time. I can get whatever bits I like delivered without caring too much who's providing them, and in all cases I can easily pick how they're actually rendered useful to me.

If that's a bit too abstract (it seems a bit too abstract to me and I wrote it), here are some concrete examples of what that means:
  • I could switch from, say, cable to DSL or WiMax or whatever tomorrow and, apart from performance, not notice the difference -- I could watch the same shows, keep the same phone number, listen to the same music, etc., etc.
  • I get the same services when traveling as when at home, though again I may be dealing with a better or worse internet connection on the road. My services are tied to me, not to a particular location or device.
  • If I want a particular bit of content -- a movie or a TV show, for example -- it doesn't matter whether I've got cable, DSL or something else, or where I am.
Providers, on the other hand, tend to take a different view. Convergence means you get all your media through them. They'd just as soon not have it be too easy to switch to a different provider tomorrow, and if you have to pay them again to access something on the road, so much the better. Hey, they're in business to make money and their interests are only partially aligned with yours.

My particular view is that the consumer will tend to win in the long run, but it will take a while and proceed in fits and starts. If what's provided gets too far out of line with what people want and what the technology can do, new players will step in and steal business from the existing ones. This tends to bring things back in line. The new players start to lose their competitive advantage, commoditization sets in, competition becomes harsher, weaker players are shaken out and competition wanes.

This lets the remaining players cash in and service once again get out of line with what people want and the technology will do. Which is where we came in ...

Interestingly, in the bullet points I gave above, video is the odd one out. Switching both land-line and mobile phone providers is fairly transparent. If you switch ISPs, your email accounts still work, and the web is the same, well, world-wide.

My guess is that this is at least partly because the technology for reasonable video over the net is only starting to become widely available, and that the Netflix/Roku box is an early participant in this particular cycle of innovation and shakeout. It's going to be an interesting time to be a studio or TV network, not to mention a cable or satellite TV company.

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