TV facing ‘iTunes moment’ warns Microsoft's Ashley Highfield
Television industry must act soon or face losing control of its online presence to brand such as Apple, says Highfield — The TV industry has as little as two years to create viable digital businesses or face a version of the …
Context & Ripple Effects
Apple had already been discussed as a TV-distribution challenger: 2007 coverage argued that Apple TV could overtake TiVo and Netflix, while another assessment focused on why Apple TV mattered. Highfield’s warning frames that possibility as a deadline for television companies to build viable digital businesses before consumer access is mediated by outside brands.
First-order effects
- Television companies face pressure to establish digital businesses within Highfield’s stated two-year window or risk surrendering control of their online presence to brands such as Apple.
- Apple’s role is recast from a device maker to a potential intermediary between television providers and their audiences.
Second-order effects
- Broadcasters and other TV providers must compete not only for programming audiences but also for control of the digital storefront and customer relationship.
- Microsoft and Apple gain leverage in TV distribution when providers depend on their platforms rather than operating viable digital channels of their own.
Third-order effects
- If providers fail to build direct digital businesses, television distribution may concentrate around platform gatekeepers that control audience access and the online interface.
- The strategic divide shifts from owning television content alone to owning the digital route through which that content reaches viewers.
The trend: Television is moving toward platform-mediated distribution, making direct digital customer relationships a strategic asset for content providers.