Wednesday, October 06, 2010

Time-Warner CEO Jeff Bewkes: We Don't Care What Channels You Want, Peons, You'll Get What We Tell You--And You'll Like It

Today's Wall Street Journal features an op-ed ("The Coming Golden Age of Television") by Time-Warner Chairman and CEO Jeff Bewkes that perfectly illustrates all that's wrong with the cable industry.

Consider that video on the Internet -- YouTube, Hulu, LiveLeak and many others -- has revolutionized and democratized on-demand media. Cable television, on the other hand, offers virtually no choice, with "packages" or bundles of channels sold almost exclusively in blocks. A central planner sitting at Bewkes' side decides what channels you'll get, when you get them, and how much you'll pay. Innovative!

And rather than try to morph cable into a consumer-centric, Internet-like palette of infinite choice, Bewkes and his emissaries in Washington are trying to freeze time in the mistaken belief that it will stabilize their revenues.

...television is at a critical moment in its evolution. Whether audiences continue to enjoy this golden era of TV will depend largely on whether content creators continue to stay apace of consumer needs and make strategic decisions that favor long-term sustainability over short-term dollars.

In other words, content creators shouldn't try to go direct to the consumer and bypass all of the added value of cable companies like Time-Warner. That added value consists of bandwidth and... uhm... well, er, eh... bandwidth.

I believe the best path for TV's next phase is clear. For the past 15 months, Time Warner, along with a growing number of content and distribution companies, has been implementing a new strategy called TV Everywhere. It operates on a simple but powerful premise: If you have access to television in your home—whether through rabbit ears or a paid cable, satellite or telco subscription—you should be able to view all the channels you receive on demand on whatever broadband device you wish... That means on-demand access to your favorite shows not only on the TV in your living room but also on your laptop or tablet...

Brilliant, Bewkesy! TV everywhere means: rather than bring the power of the Internet to TV delivery, the cable industry wants to bring its limited choices to the Internet. Absolute genius!

Because TV Everywhere is an idea and not an object, it may lack some of the glitz factor of new devices and services recently announced by Amazon, Apple, Google, Sony and others. These "over-the-top" devices and services allow companies to tap into viewers' love of TV... But let's be clear about what these new entrants are not: They are neither programmers nor distributors. Of course many of them want to turn themselves into content retailers or aggregators of programming, or they want to create another layer between content creators and their audiences.

Yes, they want to displace the cable industry for two reasons: because it is stuck in the delivery model of the nineteen-eighties and, eh, because it sucks.

One of the reasons why television has performed well while other media industries have struggled is that TV has developed a system of dual revenues from subscribers and advertisers that has served viewers successfully in digital formats for three decades now, leading to an explosion of choice for consumers at a reasonable value and programming that is ever more original, diverse and daring.

As long as that programming is allowed by the central planners at Time-Warner, that is.

...Networks with strong brand identities—ESPN or the Discovery Channel, for example—are able to program to a very specific voice, allowing advertisers to reach targeted consumers in a way most media cannot...

Is Bewkes saying that it's harder to target consumers on the Internet than on cable TV? Yes, he is -- and he deserves to be roundly ridiculed for such a laughable falsehood. Google, X+1, MediaMath, Turn, and other advertising platforms provide the most precise consumer targeting on the planet. Combined with on-demand, democratized video publishing and delivery, cable companies could launch a veritable explosion of innovation -- perhaps a "Web 3.0".

But, like the music industry in the era of Napster, the corporate bean-counters and bureaucrats in cable-land can't read the writing on the wall.

TV Everywhere is not about favoring one TV network model over another, or protecting outdated paradigms. It's about harnessing technology to redefine TV in the 21st century in a way that continues to give viewers the best possible experience, and ensures that great programming will continue to be created and enjoyed.

What a load of manure.

If the cable industry cared about consumers, it would have begun piloting GoogleTV and other systems that blend the Internet and video delivery in new and creative ways. They would test consumer-centric entertainment solutions built around choice and that harnessed the wisdom of crowds.

Instead, like the wireless carriers who wanted to build "walled gardens" and limit consumer choice, the cable companies are living in the past. They can't see the far higher profit potential that awaits the companies brave enough to innovate around the consumer.

The wireless carriers' walled garden plans were quickly blown to smithereens by the iPhone, the BlackBerry and other wonderful and innovative devices. So too will the cable bundles of yesteryear disappear. Bewkes and his blinkered accountants appear to have all the vision of the geniuses at the record labels who shut down Napster when they could have built a magnificent and profitable new music platform.

Mr. Bewkes: best I can foresee, the "Golden Age of Television" will begin when you and your unimaginative competitors figure out what's best for the consumer will also be best for your bottom line.


Anonymous said...

Jeff Bewkes has nothing to do with cable programming. His company creates content, does not provision or transmit it. Time Warner doesn't even own a controlling interest in a cable company. It's very strange that you do not know this and still wrote this article.

directorblue said...

So Time-Warner has no stake whatsoever in Time-Warner Cable, despite the companies just splitting up last year?

Perhaps you should let the SEC know this exciting news.