FT 3.07.06
Pose
the question: “What’s on the box?” and you will get
an answer about that night’s television listings –
schedules that were set by a handful of people whose ideas dominate our
viewing. Ask the same question in five years’ time and you will
get a very different response.
Our
homes are to be the site of a revolution as dramatic to the economics
of entertainment as the arrival of the gramophone, radio,
“talkies” or television itself. The Box
of the second decade of the 21st century will not be colloquial UK
shorthand for the television set but the description of a ubiquitous
bit of kit – central to every home.
Although we will spend no time looking directly at it, the Box
will be as important to our home entertainment as the television is
today. Indeed, far more important. It may not alter what we watch but
it will change, forever, how we watch and pay for it – and it
will be a shock to the job prospects of those television schedulers and
their employers.
The nature of this omnipotent Box will come as no surprise. If you have Sky+ you are experiencing a prototype. The Box
will be a high-speed computer, connected to the internet via broadband
with a substantial memory. Its inputs will include: cable and satellite
television and radio; various frequencies of digital terrestrial
broadcasting; the entire world wide web; and third generation mobile
phone signals. Its outputs will feed flat screens and wireless speakers
throughout your home and top-up your iPod, MP3 player and laptop
personal computer. It will deliver everything we watch and listen to
today plus much more. It will also, probably, connect you directly to
the library of every film studio, music company and television producer
in the world.
So what, you may well ask. What will be different?
The experience of watching a television programme or listening to a
radio show will not change that much. More is not necessarily better.
Broadcasting
companies such as ITV and GCap in the UK exist because they rent
valuable broadcasting spectrum from the government. They buy programmes
to fill the time and manage to sell just enough advertising to leave
an, increasingly small, profit. Channel 4 exists because the government
is kind enough to give it valuable spectrum and it sells enough
advertising to make an, increasingly large, profit. And the BBC! Well,
the BBC is given almost unimaginable amounts of free spectrum and gets
billions a year of tax income to fill its airtime.
When the Box
becomes the norm in every home all this will change. You and I will no
longer dance to someone else’s tune. We will consume television
and radio the way we already consume magazines and newspapers –
when, where and how we want to, at a price we are prepared to pay. We
will seize back control of our living rooms and kitchens.
Does
this miracle come free? Of course not. For sake of argument let us
assume it costs £100 a month to subscribe to all this –
and, by the way, all your internet access and phone calls come thrown
into the deal. Some people will happily pay this much. But now let us
assume you agree that the Box can show you one
minute per hour of advertising when it deems fit. Now the charge is
only £50 a month. Agree to five minutes an hour and the Box comes free.
Who will supply the Box
itself? BT Group, Vodafone, Carphone Warehouse, Microsoft, Sony? There
is a long list. My money is on Apple: all that cool design and hot
functionality, even a sexy name. How about iHome?
In the Box-enabled
future the economic model changes. Advertisers will still want to reach
audiences but they will do this through relationships with
individual consumers, not with channels. They will get into our heads
by getting into our Boxes.
Each Box,
broadband hard-wired into our home, will have its own unique internet
protocol address. Then the advertisers will be able to talk directly to
us, one-to-one, without a television or radio broadcaster getting in
the way. Today they are forced to talk to a relatively random group of
people who happen to be attracted to a particular programme on a
particular channel. In future those advertisements will be sent to your
Box with you in mind.
Your Box will
know you watch a lot of gardening shows and that you live in the
country and that it has stopped raining in your area. When you sit down
to watch the news it will show you advertising for lawn mowers.
Your friend, who lives in a city, will watch the same news as you but
he is getting advertising about holidays in China reflecting his recent
viewing and listening habits.
So here is a technological
revolution that is not just likely but certain. In the past five years,
conventional broadcasting businesses have seen a huge reduction in
their stock market value. Some observers put this down to poor
management but, given the inevitability of the Box
and what it implies for the future of broadcasting franchises, it is
perhaps a wonder that they have any value at all. And, by the way,
having a Box will surely not require a licence fee to be paid – so where does that leave the BBC?
The
writer is chairman of three quoted UK media companies: Johnston Press
(newspapers), Future (magazines) and Mobile Streams (mobile content)