It is abundantly clear that a wideband Internet is in our collective global future. There will be bandwidth to transport all that we have today and then some. The following article from TV Business Confidential cites a new report which unflinchingly declares the end of the present Network business model. Some hope is held out to those networks who can beat back the blight of fragmentation by being "multi-dimensional, highly adaptive, and customer focused." What the hell does that mean?

In coming days we will look at what this council may mean by erasing the blackboard and starting all over again. The only thing that is sustaining from the old business model is programming. That will continue also in modified form. The key question is: how will that programming--the only thing sought by the public--be marketed successfully given the technical enablers of today and those forecast for tomorrow?

REPORT: CURRENT NETWORK TV MODEL DOOMED; CHANGE OR DIE.

Those are harsh words, but that's the conclusion of a new report by the Technology, Media & Telecommunications Group of the Swiss-based Deloitte Touche Tohmatsui conglomeration. The report, Television Networks in the 21st Century: Critical Mass in a Fragmenting World, begins by saying, "Not so long ago, the business model for television networks around the world was simple: produce programs, broadcast them across a national network of owned and affiliated stations to a mass audience, and sell access to that audience to advertisers based on viewership." That's the familiar model we grew up following in the television industry. But that model is being threatened. "The global broadcast television industry is undergoing fundamental, unstoppable change that is rendering the network model obsolete." The report argues that the model of a few dominant network channels -- funded by advertising -- has long been disappearing and may soon be gone for good. What was previously considered television content is now being time delayed by Personal Video Recorders, burned into DVDs, and piped on demand over the Internet. "Such changes are having a profound effect on the structure, dynamics and future of the broadcast television industry, both private and public," the report says. On the upside, however, the Deloitte report points out that these changes also create new opportunities for networks that can evolve into a multi-dimensional, highly adaptable, customer-focused model. That mirrors a study released this week by Magna Global. The Deloitte report says that successful television networks will make the adaptation by minimizing fragmentation of their audiences and generating income from entirely new activities. If you would like a copy of the full 16-page report in PDF format, just send an e-mail to: [email protected] and ask for the "Deloitte TV Report."

Posted by Dale Cripps, April 21, 2005 6:44 PM