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TV to End as We Know It, Says Study

Television is dead, long live television. A new study from IBM Corp. confirms many fears that today's television industry is being killed by technology, but it also outlines many ways those same developments are creating new opportunities for creativity and revenue.

"The End of Television as We Know It: A Future Industry Perspective" gazes out to 2012. It basically sees a landscape fragmented by consumers now being drawn to specialized content on the multiplicity of channels currently available and predicts that these viewers will move "beyond niche to individualized viewing" as they embrace on-demand, self-scheduling, portability and other emerging options.

"Look to see the networks' oligopoly diminish, along with a significant decline in the share of revenue generated from broadcast advertising," said the report's author, Saul Berman, global partner at IBM Business Consulting Services, Media & Entertainment.

Berman's analysis shows that viewing audiences are increasingly fragmented. Even though they are still watching television programs, they no longer are content with the programd schedules being offered.

"Television as we now know it will be transformed with clear winners and losers as we expect central programming and scheduling to become largely irrelevant to a key group of viewers who will opt to create their own TV content," Berman said.

Adding to the challenges, two types of audiences co-exist and must be addressed, even though they are fundamentally different. The one Berman calls the Massive Passives are today's largest group and are basically content with the traditional television experience.

But simultaneously, there is the growth of what he calls Gadgetiers, a tech-savvy minority that he said ultimately will "force radical change" throughout the industry as they demand the ability to determine when and how they watch what they have specifically chosen.

For television executives who wish to survive in this brave new world, the report has six urgently recommended actions.

First of all, everything audiences are offered should be segmented using individualized profiles, and these segments should continually be tweaked to remain as accurately targeted as possible. This includes not only content but also such elements as advertising, pricing and delivery methods.

Innovation is the second action. Fresh approaches are needed to business models, windows, pricing structures, packaging and anything else that broadens consumers' choices.

Next, experimentation is necessary to determine what's working and what isn't. This requires investment in measurement systems along with being willing to act decisively on what those systems report.

The fourth necessary action is to mobilize. Berman's report stresses that this doesn't mean just selling downloads, it means figuring out how to deal with getting content to seamless span various hardware in a way the average consumer can handle -- without specialized knowledge or the need to modify the device or the file format.

"New consumer segment-specific content services, distribution extension and target-niche advertising will bring evolving but profound change to the television industry over the next five to seven years," Berman said.

Driving open and standards-based platforms may be one of the most difficult things for executives to do, even though it's the fifth action item Berman names. But doing this will give consumers the control they crave while making it possible for businesses to protect content, boost revenue and make the instant upgrades they require.

Lastly, companies must identify what they are best at and what they would be better off outsourcing or partnering to handle. Then they must reorganize accordingly while keeping their options open for future developments.

Berman said his findings apply to television content creators along with those who package, program and distribute it. Those that successfully navigate these treacherous currents will be rewarded with market share. He added the warning, however, that they also must wrangle the potential "significant cost savings" out of the traditional supply chain in order to fund such new delivery channels as mobile devices, the Internet, on demand TV and IPTV.


Chris Marlowe writes for The Hollywood Reporter.

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