2012 Crystal Ball: A Year of Clarity in the TV Industry

2012 Crystal Ball: A Year of Clarity in the TV Industry

When you think of the evolution of television you need to think of it in two parts.  First, there is a need for televisions to evolve from a communications and software perspective.  Essentially, your television, like all the other screens in your life from your cell phone to your tablet to your lap top) needs to behave more like a computer.  You will soon want and need to have apps on your TV and the ability to web browse and watch YouTube videos.

The second change will come in the form of content. I first wrote posts (part 1, part 2) about Television switching to an asynchronous model in March 2010 and for the most part, the opinions in those posts haven’t changed.  We have continued to evolve away from live television and towards an asynchronous, socially-based system but the evolution has been slower than I expected.  There are a couple shows that encourage people to watch them all at the same time because the show’s stars will be tweeting during the show.  NBC also offers chat rooms on their website so that you can watch the show after it has aired with your friends.  In addition Video OnDemand, Netflix and Hulu usage have all continued to rise and the self-created masterpieces of YouTube are generating television like viewership.

I think what will happen in 2012 is that we will begin to see a consolidation between the first part of this market and the second.  As we’ve seen from the cell phone and tablet market, the market likes consolidated offerings.  Amazon attempted this late in 2011 with the Kindle Fire which combined a hardware device (tablet) with a media library (Amazon Prime).  Google has tried this to an extent, partnering with several content providers on GoogleTV.  Apple has already tried this once with AppleTV, but seems destined to try it again.  I think we’re likely to see some acquisitions (maybe Netflix) and consolidation in this space and one or two providers gaining market momentum by the end of the year.  If I had to guess how that will happen, it’d be an Apple product release for a new and improved Apple TV, perhaps a new plan from Apple (maybe through a partnership?) that makes some of the content free with subscription.  That will gain a lot of market momentum, but Amazon also seems likely to make a TV connected App or Box and the people who are already using the Kindle Fire and paying for Amazon Prime may migrate that way.