Tuesday May 02, 2006
The Quest For Three Screens (Part 1)
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This will be the first part of a multi-part blog. I hope to
finish it by the end of the week, and then spend next week on E3 and
games. I know where I am starting, and I know where I will get,
but the journey may wind around a bit. I recently started
focusing on the media and entertainment (M&E) industry in a much
broader view, and the following exposition is my initial perceptions of
the interesting game being played out. So, on with it.
There is an amazingly complicated game of chess being played out in the
M&E industry right now. There are too many players for it to
be a true game of chess, but it is the closest game analogy
around. In the past month I have been to the national cable show
(NTCA) and the national association of broadcasters show (NAB). I
have gathered a ton of information about the current state of the
industries.
The Premise
There is a concept being thrown around called "The Three
Screens". There are a few variations to the meaning, but the
basic premise is that all the players in the M&E industry are
trying to leverage the three screens. The three screens being
your TV, your computer, and your portable device. I am
purposefully being somewhat vague in these definitions because it gets
complicated quickly. The reality is that there are way more than
three screens, and the methods to get content on the screens varies
widely depending upon what kind of player you are in the game.
The Players
There are many players in this game, and probably even a few
emerging that we don't know about yet. Here are the ones that I
will be covering, along with their strength positions.
The Cable Companies. I am lumping together are the cable
distribution companies in this batch - not the cable networks.
These are the folks that spent the last 10-15 years putting in mass
amounts of infrastructure and fiber to as many homes as possible.
A few years ago, their big push was for triple play services - data,
video, and voice - all in one packages. Recently, a fourth
service is in the works - mobile. A number of cable companies
have partnered with Sprint to offer a full quad play. They have
done video and data for a while, and are slowly rolling out
voice. As an example, Comcast is just now rolling out voice in my
hometown here in silicon valley. The cable companies have great
strengths in getting high quality video services to the TV as well as
providing great data services to the computer. They have
struggled with creating an online presence as a brand, and we are still
waiting to see how their voice and mobile services take off. They
certainly have the best infrastructure for the last mile - that last
bit of cable coming to your home.
The Telcos. For the general definition, I will put the wireline
and wireless telcos together here. They have also had a large
build out of infrastructure and services over the last decade.
The difference between their build out and the cable companies is
mainly around focus. Telco's focused on voice, while cable
focused on video. We are starting to see a very small difference
between the infrastructures because they are each trying to build out
for the others service, but the heritage is still there. Telco's
strengths lie in getting content onto mobile devices. They have
also had some success in getting data into the computer. They
haven't had much luck with TV, instead using partnerships to touch that
screen.
The Satalite Companies. When the video quality and customer
service of cable hit some rough spots 10-15 years ago, satalite
pounced. They could offer all digital channels and had better
customer service. The ramp up was quite impressive. They
can get to places where cable has not reached, and their partnerships
with Telcos have allowed them to touch three screens. They have
started to hit their limits though - as has cable. Only a limited
number of channels are available, and now multiple e dishes are needed
to get all possible channels. It is also a one way transmission,
so true interactivity is still quite a ways off. The limited
programming choices have allowed a new player to emerge.
The Service Providers. I don't like this name, but it includes
folks like Google and Yahoo and some emerging players as well.
They have launched with great fanfare places where consumers can get
content - whether it be video, music, or games. They are
leveraging all of the work of the cable and telco companies to get
different content out to consumers. This content is not limited
to studio content either. In fact, consumer generated content has
allowed us to do things that was never possible before, and the
traditional players would never had allowed. More on that
tomorrow. There is also a new set of service providers
emerging. The content creators are becoming their own service
providers. I am going to use a lot of Disney examples because I
am a huge Disney fan. For example, look at Disney Mobile or
Disney Games. These are in direct competition with their telco
and Yahoo Games counterparts. They exploit the main weakness of
general service providers - organization. They know their
consumers and how they want their content organized and
presented. Another example of a service provider is
Microsoft. They are trying to pull off one of the biggest Trojan
horse plays we have seen. More on that later.
The Content Providers. This final set of players is one of the
smallest today, but will grow - and is growing - to become the most
dominant force in all of this game. Historically, content
providers are studios that create amazingly polished content. And
that has been the most consumed content. The participation age is
changing this. Soon, if not already, more content will be created
by "non-studios" than the traditional studios.
This should wrap it for part 1. Next up, I want to look at
consumer behavior and why each of these players is trying to bet on
what behaviors will become dominant.
Posted at 10:47AM May 02, 2006 by dtwilleager in General |
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