In August of this year, Marc Andreessen, the man who built the first commercial web browser, wrote that, ‘software is eating the world.' Yet, he noted, companies continue to underestimate the impact modern technology is having on their markets. Andreessen suggested this myopia might be down to bad memories and burnt fingers following the dotcom boom and bust, when many outlandish promises about the future were made and broken. Additionally, he cited a lack of appreciation about the speed of change that continues to take place around us and the subsequent dramatic shifts in the landscape for companies, brands and organisations. For instance, Andreeseen believes the rapid uptake of smartphones that's driving global access to the web will create vast online markets of five billion people. Furthermore, reaching these giant markets is becoming easier as the burgeoning capacity and efficiency of cloud computing continues to drive down the cost of running web services. ‘Companies in every industry need to assume that a software revolution is coming’, advises Andreessen who is now one of the world’s most influential technology investors. It strikes me that his comments accurately capture the current mindset of...
...big brands and the marketing industry. Despite experiencing constant shifts in the environment in which they operate brands assume that such change is going to somehow be ringfenced – despite evidence to the contrary. So, for instance, whilst it's now accepted that large parts of consumers’ media consumption and their resulting behaviour have changed for good, a belief endures that some aspects of the marketing mix will remain untouched. For example, the current received wisdom is that software may radically change the way we consume news, go shopping, or keep in touch with friends, but TV will stay largely unchanged. This complacent viewpoint ignores recent lessons about the way in which networked media undermines and reshapes whole industries, allowing powerful new players to get a foothold.
For a long time the music industry held a similarly relaxed outlook; that people will always want to listen to great music and musicians and that was that. Which of course was true. However, the assumption underlying this view was that the Big Labels owned and controlled the industry and could set their lawyers on any newcomers looking to upset their gilded apple cart. The truth was that while people do indeed care about music, no one cares about the industry that runs it. So when Napster appeared, unbundled the product and gave people what they wanted all hell broke loose. Which created enough space for Steve Jobs to enter the market, build on what Sean Fanning had started, and eventually take control of the whole industry by developing a massive distribution platform that now sets market prices.
Likewise, the myopic view that big-changes-are-coming-everywhere-except-here, as described by Andreessen, was prevalent in the telecomms market. However, then Skype came along and used the same technology as Fanning to route around a whole industry, allowing people to miss out the carriers’ networks completely.
Correspondingly complacent attitudes were held by phone handset manufacturers, most notably Nokia, which - again - assumed they were the natural gatekeepers to the marketplace. But then Apple changed the game by offering genuine mobile web access through the iPhone. And Nokia began to smoulder.
Today, it seems that the Grand Fromages of the TV industry are in an all too familiar position. They believe they are in control of a marketplace that will remain unaffected by the surge of networked media that is transforming the world around them. So industry bodies such as BARB and Thinkbox, entirely missing or choosing to avoid the point, continue to publish data about how much people love the TV industry when in fact the figures only show how much people like watching great content on a big screen.
In the same way that consumers continue to enjoy music, chat with friends and choose the latest cool phone, people will keep on relaxing in front of the TV with their favourite films, drama, sport and news. However, in the deeper waters technology super-predators, attracted by the familiar scent of complacency, are circling the TV industry sizing up the juiciest of media prey, waiting for the tides of networked media to give them their first real bite. Perhaps Ofcom's report in August that one million connected televisions were sold in the UK last year might prove to be the sea change for which they've been waiting.
I’m not sure we’re the ones missing the point, James. The BARB viewing data does indeed underline that people enjoy watching great content on a big screen; but it also shows people prefer watching it live. This is down to the basic human desire to share experiences (Twitter et al are fuelling this). It is important to separate technology from human behaviour. Apple stole a march on the music industry because it made the experience easier and better (cheaper). The broadcast TV experience is not comparable (nor is it to ‘phones). TV is already easy – and preferred - and, thanks to new technologies like DTRs and on-demand services and social media, is supplemented by new ways to watch which are enhancing live TV viewing, not detracting from it. The TV industry reacted fast to give people the TV content they want in many different ways, and paid for in a range of ways, whether free with ads, micro-payments, or subscription.
Record BARB figures don’t show people love the TV industry; they show they love TV, which happens to be made and/or paid for by the TV broadcasters (funded by advertising, subscribers and the licence fee). They are far from complacent but if new companies join the TV industry – i.e. properly funded quality content – that’s fine. It’s just normal competition and given the TV industry is an attractive place to be, they’re welcome if they make TV better.
What are you actually suggesting software companies will do that will ‘eat TV’? There are of course lots of technology companies (set manufacturers included) wanting to carve themselves a slice of the action by interposing themselves between viewers and the content they love but unless they make it a better experience for viewers and an attractive business proposition for the people who own the content they won’t get far. Witness what happened to Google TV Mk1. On-demand viewing may nibble into live viewing when it gets delivered to the big TV set, but technology is having nothing but positive effects for TV overall. I can see why it might spell danger for DVD sales (why buy or rent when it is delivered straight to your TV), but not watching TV.
By reporting the facts about TV viewing today we are not saying nothing is ever going to change. What would you have us do? We also research the future of TV and our much-appreciated Tellyporting research gave families connected TVs and other connected technologies to see how the effect on their viewing behaviour (not much ). It’s important to keep these things grounded in real human behaviour rather than get carried away by technologists’ wish-lists.
(I work for Thinkbox)
Posted by: Simon Tunstill | October 19, 2011 at 11:43 AM
Thanks Simon, that's very helpful comment - much appreciated.
When I suggest that technology companies are 'eating TV', I'm anticipating a similar outcome to the music and newspaper industries, where mega-tech companies unbundle products to offer consumers greater value. All driven by the same trends eg more powerful, cheaper connectivity.
I agree it's early days as demonstrated, as you say, by Google TV MkI. However, it doesn't seem likely that Google, Microsoft, Amazon, Apple et al are going to stop there. They have spotted that current TV measurement metrics can be improved, including live TV, thereby offering better value to brands, and intend to use their vast resources to make that happen.
There is of course plenty of innovation occuring within TV, eg Sky Go. However, I think it's unwise to refer to the many TV services being offered by technology companies, such as Google, as a 'wish-list' as these companies now have a track record of making their wishes come true.
As you say it's important to focus on 'real human behaviour'. However, I would suggest that as the range of services increases people will migrate to those offering the best value, just as they have to Netflix in the US.
Only time will tell, thanks again for dropping by.
Posted by: James Cherkoff | October 19, 2011 at 12:14 PM
One really has to read the excellent Andreeson article, which spends more time elaborating the idea.
It seems to me that Andreeson is using 'software' as an emblem for computerisation. It's really about the shift from analog to digital, isn't it? And the inherent need to add intelligence to our tools, for radical gains in efficiency and power.
TV is an analog. It predates the computer. It doesn't have any intelligence at all. The problem: as soon as you start adding intelligence to TV, it's not even TV anymore! TV is hardware. TV is a broadcast signal. TV is a container for programs. TV is commercial television. TV is the BBC. The first bit of intelligence we add: skipping commercials and time shifting, ie. getting rid of the broadcast bit and the businesses model bit. Notably the BBC can thrive in a digital world. Yet we could say TV is disintegrating.
I added intelligence to my TV in 2002 by replacing it with a computer. It's an iMac. You can intelligently program it to record any Scorsese movie, but only as long as it's on the BBC and Tom Cruise isn't in it. And the software lets you get up in the middle of the football game - and watch it on your iPhone on the way to the pub. And you can watch anything that's on your 'TV' - in the living room - on your iPhone, where ever you are. The iPhone is the remote control and the mobile version of the TV. The TV has it's own email address. It also has a Twitter account so we can DM it shows. Programs come from TV and podcasts and Vimeo, YouTube, LiveStream (#occupy), bittorrent, iPlayer, everywhere.
I think more fundamentally, TV interposes itself between viewers and the content they love. People love their shows the way they love their songs, and they love TV the way they love the album. Exploding the medium is a by product of intelligence.
Posted by: bradbell.tv | October 21, 2011 at 11:33 AM
Hey Brad, absolutely great comment as ever, thanks for dropping by... ;-)
Posted by: James Cherkoff | October 21, 2011 at 02:35 PM
The State Of Broadcast Television
http://visual.ly/state-broadcast-television
"A recent Nielson study shows that while DVRs allow people to skip commercials, most people still watch them," said the infographic.
Yah. Is that like, "A recent FSA study shows that while de-regulation of financial services allows people to steal with impunity - a few million will allow you to ride out the collapse of the Western civilisation from the comfortable viewing distance of a luxurious, high security, gated community or castle - but most people still enjoy being honest."
Posted by: bradbell.tv | October 26, 2011 at 01:11 PM
Heh, thanks Brad. Reminds me of some research that Sky once put showing that ads are more effective when viewed at PVR speed (30 x faster than normal)...
Posted by: James Cherkoff | October 26, 2011 at 01:37 PM