SBD/April 30, 2012/Media

Tech Industry Trying To Prep For Question As To Why TV Cannot Be More Like A Tablet

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Analysts say that it is unlikely consumers would pay for individual channels
The possibility of the television experience becoming more like a tablet featuring apps was examined by Chozick & Wingfield of the N.Y. TIMES, who noted the technology industry is “trying to address” the question of why TVs cannot be more like tablets for the millions of customers “ready to embrace the next generation of viewing options.” In the process, the industry “could transform the clunky cable interface, with its thousands of channels and a bricklike remote control, into a series of apps that pop up” on the TV screen. A model built around TV apps “could let viewers use favorite apps on the screen on an a la carte basis, thus bypassing cable subscriptions and all the extraneous channels they don’t watch.” The television industry is “delicately assessing how to balance the current system with an Internet-based future that some feel is inevitable.” A la carte apps would “upend the entrenched and lucrative economics of television, which have long relied on a system in which cable customers pay for channels even if they don’t watch them.” Sanford C. Bernstein & Company analyst Craig Moffett said that it is “unlikely consumers would pay $20 a month for individual channels when the traditional cable bundle provides a bargain price.” Moffett: “The model we have is the model we have, and while it’s tempting to imagine an app for TNT and an app for ESPN, that’s not the likely outcome.” Chozick & Wingfield added most apps are "intended as complements to traditional TV viewing” and are only available on tablets and mobile devices. One such app is NBC Sports’ soon-to-be-introduced NBC Olympics Live Extra, which will “allow subscribers to stream every Olympic event” from the London Games. The app will be “available only on iPads, tablets and other mobile devices,” and cannot be seen on TVs through Xbox or Roku. NBC Sports Digital VP & GM Rick Cordella: “No one on the digital side wants to take away audience from the TV.” Chozick & Wingfield added that the ability of any channel to “strike out on its own,” even those like HBO and ESPN, “remains problematic.” ESPN "makes about $5 a month" from each of the country’s cable subscribers, and should it ever sell its programming directly to the consumer, “it would need to charge several times that rate.” ESPN Exec VP/Sales & Marketing Sean Bratches said, “We have no plans to bisect our partnership with distributors” (N.Y. TIMES, 4/28).
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