Sunday, April 28, 2013

Reed Hastings - 10 Reasons why Internet TV will continue to gain popularity

After Netflix’s blockbuster earnings sent its stock soaring yet again earlier this week, Reed Hastings, the company’s CEO made a bold prediction: TV as we know it is coming to an end.  “As Internet TV grows from millions to billions, Netflix, HBO, and ESPN are leading the way,” Hastings wrote in an 11 page manifesto about Netflix’s future. “Internet TV will replace linear TV.”

He's obviously not sharing his perspective alone because numerous networks and stations have agreed with his views on the limitations of linear television and have launched their own apps. Although Hastings cites WatchESPN, HBO GO and the BBC iPlayer as leaders in this arena, we must also acknowledge the industry disrupters in streaming television technology; Aereo and the Dish's Hopper. Each of these also have huge potential to cause a dramatic shifts in the TV business as it heads into the future. Case in point at the opening of this year’s NAB when News Corp (FOX) COO Chase Carey threatened to take their programming off the broadcast airwaves and convert to cable channels. This was followed later by Univision and later CBS. While viewed largely as saber-rattling, the idea that the networks could be converted into cable channels gained attention in the television world because such a move would have wide-reaching implications for viewers and station owners. The point may be mute if Hastings predictions hold true and we move from broadcast and cable to an unbundled & streamed viewing environment.

Feel free to look at his letter to shareholders earlier this week and the 10 reasons he believes why Internet TV will continue to gain popularity, concluding that “over the coming decades and across the world, Internet TV will replace linear TV. Apps will replace channels, remote controls will disappear, and screens will proliferate”.

Let me share them with you here:
  1. The Internet will get faster, more reliable and more available
  2. Smart TV sales will increase and eventually every TV will have Wifi and apps
  3. Smart TV adapters (Roku, AppleTV, etc.) will get less expensive and better
  4. Tablet and smartphone viewing will increase
  5. Tablets and smartphones will be used as touch interfaces for Internet TV
  6. Internet TV apps will rapidly improve through competition and frequent updates
  7. Streaming 4k video will happen long before linear TV supports 4k video
  8. Internet video advertising will be personalized and relevant
  9. TV Everywhere will provide a smooth economic transition for existing networks
  10. New entrants like Netflix are innovating rapidly
Update 05/01 - A view from Michael Grotticelli at Broadcast Engineering - Netflix unveils plan to replace broadcast television

1 comment:

  1. If the largest ISPs offer, or rather, package/bundle video with internet, and Reed Hastings, believes we are moving to a NETFLIX like world with more bandwidth for internet access, and less for video in the future. Then his predictions, don't seem valid according to this article. I already did "the math" myself long ago. Here's my reasons: A. If his wish, becomes their plan, then their linear and on demand, business would be cannibalized. B. The architecture, as is, will not be sufficient as prior article points out. C. They would also lose money from the loss of STB fees. D. Data Caps E. I don't see less linear channels being created (agree or not). I see many more in progress.