[opendtv] Re: Report: 20% of TVs shipped in Europe next year to have Internet capability

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 17 Dec 2009 07:16:42 -0500

At 11:31 AM -0600 12/16/09, Manfredi, Albert E wrote:
So, you're saying that CE companies in Europe (and Australia and New Zealand) can figure out how to offer customers what customers want, but here in the US these same CE companies become as obtuse as mules?

Not exactly.

The CE companies do react to the needs of local markets and adapt their product offerings to market conditions. It is the marketplace that is driving the availability of receivers with DVRs in the UK, New Zealand and Australia. AND it is the marketplace that still allows the CE companies to sell CRT based TVs in many developing nations. It was the marketplace that drove the Japanese CE companies to attempt to develop a replacement SD-DVD, after this product became so successful that it became a virtually profitless commodity.

The U.S. marketplace is driving the dramatic changes in the way that digital media content is distributed and consumed. The greed of the media conglomerates and their partners in the multi-channel distribution business is being countered by technological changes that are making it possible for information technology companies to challenge the CE companies.

It typically starts with major leaks in the existing media ecosystem, as we saw with MP3s and music piracy. Then we see a tech savvy company like Apple develop a new ecosystem that rapidly gains legitimate market share while the traditional CE companies watch helplessly.

We are on the cusp of major changes in media distribution based primarily on ONE FACTOR:

CHEAP BANDWIDTH.

But ALSO based on sophisticated networking capabilities that are making it possible to connect content creators with individual customers rather than audiences.

Apple is building a huge data center in North Carolina - you do not see Sony or Philips or Samsung building an entire ecosystem for future consumer products, other than Sony with the Play Station franchise. These companies DO build components for Apple and others who are providing the real innovations today. Apple does not sell TVs (yet), but they do sell a desktop computer with a 27 inch display.

So my comments are based primarily in the notion that the future of the CE industry is being driven by companies that have not been traditional players, and that the traditional players do not have the DNA to compete. In this there are some exceptions. I do think that Philips may be able to make the transition. I'm less certain that Sony can transform itself. These were the companies that provided market leadership for the CE industry in the past few decades.


I can believe it. Because this has certainly been the case in the past.

Either that, or there are other forces at play, in the US, that are somehow absent elsewhere.

Absolutely!

At least for now we have more expendable income and have been feasted upon by the media conglomerates and their partners. But this is a critical prerequisite for the next big change:

Taking all the money we now spend on media and redistributing it based on a networked model where sellers and buyers interact without all the middlemen taking a big cut.

There are strong parallels in the beer business, where we are FORCED to sell through distributors who mark up the product 30%, yet expect us to do all the market development work. As you say, there are forces at play here...

Regards
Craig


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