With one or more TV sets in virtually every home in the U.S., Europe, Asia and other affluent societies, television enjoys a wide if not universal audience. Television is served by a multi-billion-dollar content creation industry and supported by billions of dollars in advertising. Television delivery systems have proliferated, with cable and satellite now competing with broadcast-and sometimes combining with it-to bring more channels to more people than ever. As it transforms itself into a fully digital medium over the next decade, television will not only change but grow worldwide-exponentially.
| TV is a virtually universal broadcast medium, extremely easy to use for a mass market of viewers, who receive its content passively. But its content is limited to certain channels in certain time periods, and cannot be personalized or customized for individuals. |
The Easy Medium
Indeed, the world of 500 channels, long heralded, will finally come to pass with digital TV. Such an explosion of choices will pose a formidable problem for television viewers. After all, there's a reason viewers are popularly known as couch potatoes. Television is a very active medium, one that "comes at" the viewer, who receives it in a passive (if not quite vegetative) manner. In other words, TV has always offered viewers ultimate "ease of use." But how will people accustomed to that ease of use navigate a 500-channel sea of options? How will they find the entertainment they like and the information they want with a device as simple as a channel selector?
The Challenge for Providers
A world of 500 channels will challenge television content providers as well. Television is a great broadcast medium and traditionally the powerhouse providers have succeeded in broadcast terms: by delivering the same content at the same time to large audiences. But 500 channels will fragment audiences like never before. Differentiating one's product in the TV marketplace will become both more important and more difficult, as the rules of the game change radically.
Paradoxically, the most effective way to capture large audiences in the expanding universe of TV is likely to be: one at a time, with highly targeted, customized, personalized TV programming and services.
Although the Internet market is growing very quickly, it still represents a small fraction of the total domestic TV-focused advertising & viewership.
Only by combining TV, cable and on-line media can the true market potential be recognized.Morgan Stanley Investment Research, 1996
