Cord cutting is all about tipping points

We have a widget on the advanced-television.com news service that calculates the most read story over the last five days. It is clear that if the words connected TV feature in the story it will rank high and if the name Google TV is included it will shoot to the top.

This fascination is divided between two groups: those who see OTT as the next great opportunity for TV expansion (local, specialist, etc), and an opportunity for established players to reach beyond managed providers and increase their margins. And, on the other hand, established providers who fear the first group might be right.

Here, as in other areas, Google has taken just a few short years to establish itself as the eight hundred pound gorilla that sits where it wants. But, as its executives now readily admit, its first TV effort saw it sit in the wrong place. It made poor assumptions about the readiness of viewers to use PC-like lean forward functionality and navigate pages of search returns, and it misjudged the nervous effect its sheer market power would have on content owners, most of which shied away from ‘embracing the beast.’

However, as Google points out, its track record is in bringing unfinished developments to market and letting the customer and contributing programmers shape the final product. Think Android and the nerves will continue to shake.

What Google’s experience did clarify is that it doesn’t matter who you are in terms of distribution, reach or search, if you don’t have access to content people want, you are not in the game. So, in terms of potential threat to established platforms, it is all about tipping points. Will a point be reached where readily available broadband speed and excellent UIs that can be provided from the Cloud and run on connected TVs will mean content owners and packagers will cut out the middle man?

A cable exec from a big-three MSO in the US told an advanced-television roundtable recently, “no chance,” because the content owners made far too much money from the current business model to jeopardise it. There’s a lot in that, but there was also a lot in it when executives from the DVD segment said the same thing ten years ago.

I’m sitting in the office with the cricket on in the background playing from Sky Anytime on a slow-medium paced broadband connection and an old PC screen. It’s not bad at all. When super quick broadband is everywhere, even if guaranteed speed commands a fee from ISPs Sky doesn’t own, at the very least margin pressure on cable platforms and transponder vendors is going to become intense.

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