Pacific Crest Securities analysts Andy Hargreaves and Evan Wilson today offer up some thoughts on the “future of TV” and what it means to Netflix, Google, and Apple, among others, in the form of a 34-slide deck of slides.
In addition to Netflix’s streaming video service, Google has its “Google TV ” effort, and Apple is expected to update its Apple TV set-top box at its developer conference in San Francisco on June 8th. The big picture, if you will, is that the Internet has “finally become a legitimate video on demand distribution alternative for professional content, and time spent following.” This is going to cause headaches for traditional TV, they write. The use the image of “a billion streams can flood a fortress.”
The Internet enables superior personalization, broader distribution and faster product development than traditional MVPD services. This is likely to support higher-quality services that drive an accelerating shift in consumption and an infection of Internet economics into the traditional pay-TV industry.
The authors anticipate that Apple may offer a a “virtual MVPD,” or “multichannel video package,” something the authors have recently put forward in prior reports. Traditional “linear” TV distribution is going to be a smaller business, and providers such as Comcast, Time Warner Cable, Dish Network and DirecTV are going to be pressed to get more original content.
Remember, though, that most of TV’s revenue today comes from traditional pay TV, and they have big margins.
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