2009 was a tumultuous year for the traditional TV industry, as the recession rocked bottom lines across the business, while new Web-based technology made sitting passively in front of a screen watching conventional fare, commercials and all, look increasingly like a soon-to-be-forgotten pastime.
Research from BIA/Kelsey showed that revenues in the TV industry plunged 22 percent last year. This year will be little better, with another double-digit slide forecast. Zero growth in 2011, viewed in this context, would be a big year for traditional TV’s business model.
The planned acquisition of NBC Universal by Comcast Corp. (CMCSA), officially announced last month, provided a multibillion-dollar indicator of how dramatically the landscape has shifted in the television/home-entertainment businesses in the last few years. The deal has the nation’s No. 1 cable company taking a 51 percent stake in a business that combines two of the most storied names in television and movies, a marriage that would have been inconceivable even three years ago.
The merger, which still faces intensive regulatory scrutiny, could also help hasten the death of the free TV model that U.S. consumers have enjoyed for more than six decades, since the days of NBC’s “Texaco Star Theater,” in the early ‘50s.
"Good programming is expensive," Rupert Murdoch, chairman of News Corp. (NWSA), which owns Fox, told a shareholder meeting last fall. "It can no longer be supported solely by advertising revenues."
The most eye-catching development at CES, which got underway Jan. 7 in Las Vegas, is the advent of 3D TV. Searching for ways to prop up declining prices for even oversized, flat-screen TVs, vendors are debuting new stereoscopic displays that can convert 2D signals into simulated 3D. Toshiba’s (TOSH.SW) Cell TV – based on Cell processors originally used in Sony’s PlayStation 3 game console – is hitting North American markets after being touted for years. Toshiba says it has already sold more than 1000 of the advanced sets, which sell for around$10,000 apiece, since launching Cell TVs in Japan in December.
Several U.S. TV-makers are expected to unveil 3D sets, at CES or later this year.
Beyond 3D displays, though, the truly groundbreaking movement in TV is to break down the walls that persist between the Internet and the TV set in the family room. While Web applications have been available through Internet-capable TVs for some time, operators are now offering fully converged devices that blur the line between online, on-demand, and conventional cable TV.
“Cable networks are looking to diversify their distribution platforms,” said David Allred, senior vice president of marketing and product management at Sezmi, a converged-TV startup, “so that the content is available on whatever screens consumers want to purchase them on.”
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