This is Part 3 of a three-part series on what changes, if any, may be coming to TV

TV, as I have recounted in the last two articles, is as firmly entrenched as an incumbent can be.

The idea that you can cut the cord and simply watch the shows you currently want to watch (unbundling) is a fantasy; the economics that make those shows possible depend on the current pay-TV model (See Part 1: The Cord-Cutting Fantasy)

Great content has few substitutes, high barriers of entry, and depends on networks as de facto venture capitalists willing to take risks on new shows (See Part 2: Why TV Has Resisted Disruption)

Competing with this model has, and will continue to, fail. There is no go-to-market strategy that is feasible.

In fact, the only way things will change is through true disruption.

Disruption is a funny word; in most of the tech press, it has come to mean little more than “competitive,” and functionally superior products are often labeled as “disruptive.”

This is precisely backwards; a disruptive product is inferior to the incumbent, and usually relies on a completely different business model (usually a lower margin one). A disruptive product is almost always cheaper, and in fact usually doesn’t seem competitive at all, at least in the beginning.

Competitive (or “sustaining”) products simply try to provide the same function but better. TIVO is a classic example in this space; TIVO’s competitive proposition is that it is a better set top box than the one you get from your cable company:

Both the set top box from your cable company (STBFYCC) and the TIVO change channels

Both the STBFYCC and the TIVO display a channel guide

Both the STBFYCC and the TIVO pause live TV

Both the STBFYCC and the TIVO record shows to watch later

Both the STBFYCC and the TIVO can be programmed to record a specific show

The TIVO does a lot more, and does it better, but the differentiation is at the margins. It is a sustaining product, and has serious limitations: getting cable cards is a pain, and the upfront cost is significant relative to STBFYCC. I have no doubt Apple, say, could create a set top box even better than a TIVO; I also have no doubt that it would suffer the same fate.

So, if a better set-top box is doomed, what might disrupt TV?

The theory of disruption rests on the idea of “jobs to be done.” TIVO does the same job as a set top box; but – and this is the crucial point – the set top box is only a means to an end. What is the job we hire TV to do?

It turns out there are quite a few. Some of the jobs TV has traditionally done include:

Keep us informed

Educate

Give a live view of sporting events

Enlighten and story-tell

Provide escapism

For decades TV was better at each of these jobs than anything else in consumers’ lives. It was in this period of superiority that the present economic system of pay-TV was developed, and, in a world where so many jobs were done by one device, any price was a great deal.

It’s in jobs-to-be-done, however, where the unbundling that matters is happening. “Keep us informed” is the obvious one: the idea of relying on TV news is so archaic to most of you that I know I raised your hackles by even putting it in that list. Same thing with “educate” – one can learn far more from the web than even the best TV.

In other words, two of the jobs TV has traditionally done are now done far better, and far more cheaply, by personal devices like computers, tablets, and phones. That is disruption.

Yet, we pay more than ever for TV; the vast majority of the population gives enough of their attention to some combination of sports, story-telling and escapism to sustain the current model.

It’s attention that is key; our attention is a zero sum resource – every minute I spend playing a game, for example, is a minute I don’t spend watching TV. And, if any company “cracks” TV, it’s not that they’ve figured out how to do TV better, but that they’ve figured out how to win a greater and greater share of consumer’s attention by doing the same jobs that TV does, but better.

TV is so entrenched because it’s actually cheap for what you get, it benefits from tremendous network effects, and it’s a default choice for most people. In fact, its entrenchment is not unlike the entrenchment of the PC, which ruled the roost for 25 years: cheap for what you get, tremendous network effects, and Windows was the default choice.

Ultimately, what disrupted the PC was not a competitive product; even today Windows still has >90% share of PCs. However, Windows commands an ever dwindling share of the time spent on all devices; phones and tablets have taken away attention because they do many of the jobs we previously hired PCs to do – read, draw, music, video, games – better.

The disruption of TV will follow a similar path: a different category will provide better live sports, better story-telling, or better escapism. Said category will steal attention, and when TV no longer commands enough attention of enough people, the entire edifice will collapse. Suddenly.

I’d bet on escapism being the next job we give to something else, for a few reasons:

The economics of live sports are completely intertwined with the pay-TV model; this will be the last pillar to crumble

Networks still play a crucial role in providing “venture-funding” for great story-telling. Netflix is the great hope here

Escapism is in some sense indiscriminate; it doesn’t matter how our mind escapes, as long as it does. Yet it’s also highly personal; the more tailored the escape, the more fulfilling. This is why there are hundreds of TV channels. However, there will never be as many TV channels as there are apps.

Imagine a $99 “console” with an optional $49 controller and an App Store. That’s a lot of potential escapism, and a lot of user attention. It’s a lot of margin too, at least at high volumes. I think it’s a space where a company that thinks different could have a “a significant contribution” and “crack” TV by not, in fact, being a TV at all.

This is a three-part series.

Part 1: The Cord-Cutting Fantasy. Getting only the content you want without paying for everything is a fantasy. Pay TV is socialism that works.

Part 2: Why TV has resisted disruption. Great content is differentiated, has high barriers to entry, and depends on networks.

Part 3: The Jobs TV Does. The key question is attention, not set top boxes. What jobs do we hire TV to do?

Also see Steve Jobs on TV, my Apple TV prediction, and my Additional Notes on TV

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