Broadband, NetFlix and the Future of Television

Alan Percy : The SIP Invite
Alan Percy
| Observations by Alan D. Percy on VoIP enabling technology, industry and our personal reach for success.

Broadband, NetFlix and the Future of Television

Two weeks ago, I spent four days at CableLabs - talking about and seeing the new developments in the cable television business.  Truly fascinating stuff with new DVRs, on-demand programming and even a 3D TV demonstration.  However, based on what I seeing at home, I suspect someone is about to "move their cheese".

If you have been following my now year-long adoption of Verizon FiOS, you know that we've been using a TiVo-HD with FiOS to record and watch television. We subscribe to the FiOS triple-play bundle with HDTV, 20Mbps Internet and two work telephone lines.  As in most households, my teen-age kids have been the primary users of the television all summer and I've been watching their behavior on how they use the television, what they watch and how much time they spend watching.

They spend hours in front of the TV, but they don't watch "TV".  No, they don't play video games - it's NetFlix over the Internet that has become their primary source of visual entertainment.  You see, the TiVo-HD includes an optional netflix-logo.jpgNetFlix on-demand client that allows the kids to choose programs from the vast NetFlix library and then watch them instantly on our TiVo via the Internet.  It really is amazing - no waiting for the DVD anymore - just click and watch.  The kids have even put the NetFlix mobile client on their iPod Touches, allowing them to browse the NetFlix library from the couch.  

So what does this mean to the Cable Industry?  Think about it - here is a generation that who's world is a broadband connected and able to access virtually any/all information almost instantly.  And most of that information comes from other sources, not the cable operator.  Based on their usage, the cable operator is just a supplier of broadband Internet.

This really means that when the millennials grow up and start controlling household spending, things will change dramatically.  Our generation values the TV programming, Telephone, then Internet in that order.  I suspect they will reverse it, with their highest value being the Internet and then TV and Telephone being almost irrelevant.

Where does this take both the cable companies and legacy wireline operators?   Their focus will soon need to shift to reliable and very high-speed Internet access being the "high value and primary product", because the rest is quickly going the way of the Dodo bird.

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1 Comment

Hi Alan,

Yes, the next gen kids use media totally differently than our age group. My oldest son watched movies online this past summer much more often than TV. He mainly used the landline phone to keep his cell charges down.


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