How will you watch TV in ten years?

I  recently joined one of those social networking sites to keep up with far-flung friends and family. A few of my friends cataloged all of their favorite TV shows and movies on lists so long that I ran out of space on my screen. I started to get curious about what direction the media and entertainment industry will take as it merges with telco and as fixed-mobile convergence continues. So I interviewed Taras Burgis, Sun’s new Director of Business Development for the Media and Entertainment industry, to find out.

OTR: What’s up with the current convergence of the media/entertainment and telco industries? 

Taras: Typically, convergence is discussed in terms of technology. But let’s talk about money!

Most media organizations, with perhaps the exception of those that are internet-based, have traditionally dealt with their audiences en-masse – using demographics to aggregate an amorphous blob of consumers as a single candidate for advertising, paid for by an advertiser. With the advent of digital technologies, media organizations quickly came to realize that customers were also prepared to pay – for personalized content.

Enter Telco. Masters of one-to-one relationships, Telcos have always had a fundamental need to connect individuals and to bill them with the right charges, or even aggregate minutes by user.  As Telcos start distributing media, they are in the enviable position of knowing the customer and understanding their behaviors. And they have a two-way communications infrastructure as well as the capability to deliver content with discretion.

This marriage of a business model that understands customer intimacy, along with customer willingness to pay for content and an innately interactive communications path, leads to really exciting media opportunities.

OTR: So where does the technology come in? 

Taras: Technology enables convergence. But it is the economics and the business models that will fuel the engine of convergence and make it a business reality. For me, this is the fascinating part: the convergence of businesses through technology is the opportunity that telco and traditional media players are grappling with in today's changing media landscape.

OTR: What recent market development has excited you most? 

Taras: I am most excited about the acquisitions of online media-buying and placement companies and the consolidation of the marketplace by the likes of Google, Yahoo and MSN. Firstly, it clearly demonstrates that there are now serious revenues in the online space and that buying media via the web is a real part of the media mix, just as important as traditional mediums.

I see that the marketplace is moving to a just-in-time delivery of advertising and promotional content to a measurable audience, applying technologies from the on-line world to traditional media-buys. This is another example of economic convergence. If you couple this trend with the need for more targeted advertising, technologies such as the Sun Streaming System become extremely important in the low cost-per-customer delivery of rich media content.

OTR: Do you think the iPhone signifies a new era of mobile entertainment, or has it been over-hyped? 

Taras: The functionality of the iPhone is not particularly new, but it is brilliantly executed. The iPhone signals a step-change in consumer behavior. Think back to 1981 and the launch of the PC. There were PCs before then – Commodore, Atari, CPM-based machines, and so on – but only the select few engaged in computing. Then the PC became a commodity and was accepted by the average consumer as an 'entity'. Soon it was in offices and then it came into the home.

Similarly with the iPhone. The hype is in the fact that, for the first time, here is a device that provides all of the functionality, packaged elegantly for the consumer. It is integrated into the communications world, and it ties it into the world of entertainment in a simple, yet sophisticated way. Just like the first PC, it is a first-generation device. Its role is to prove consumer viability. In doing so, and by capturing the imagination of the consumer, it is paving the way for accepted ongoing improvement. So, yes, it does signal a new era – it has broken the old model and as such it is deserving of the hype status.

OTR: How do you think most consumers will watch TV in ten years time? 

Taras: The most amazing thing about media is it's 'stickiness'. Print hasn't gone yet, nor has radio, nor TV. What has changed is the mix of how people use different media. And that varies with the age and attitudes of the consumer. So in ten years, we may endearingly call it TV, but it will be characterized in the following way:

  • It will be a rich media environment that enables the consumer to be passively entertained, or interactively immersed - the consumer will choose.
  • It will be tethered to the lounge for a family theatre experience, or portable in the pocket or car for a personal engagement.
  • It will be the appliance that enables the payment of bills, shopping, playing games, connecting with distant family and friends, and the sharing of memories as photos, videos and voice.

 
Above all, 'TV' will remain a prime vehicle that connects the human experience – within and beyond the local community. The main difference between today's world of TV and tomorrow's is choice. Today choice is measured in number of channels - the things that I can see as a consumer, tomorrow's choice will be measured in number of services - the things that I can do as a consumer. ##
 
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