The disintermediation of old media continues…
The disintermediation of “old media” continues with Internet television – the digital distribution of television via the Internet.
Telecom Corporation of New Zealand has announced that they will soon be launching an internet television business, named Lightbox, into the New Zealand market with about 5,000 hours of content.
This will include a range of back-catalogue hit TV shows, some exclusive new television series and will be free of advertising. Lightbox will be available via all broadband connections and will cost NZ$15 per month, with no set up costs, contracts or set-top boxes required. Devices include Windows and Mac PCs and laptops, iPad and Apple Airplay. Additional devices are also in the pipeline.
Up to five devices can be registered to each account and two live streams can be run simultaneously.
Lightbox will compete with the on demand video service Sky Television plans to offer late in 2014 as well as Quickflix and Easyflix. It is thought that over 20,000 New Zealanders currently pay US$9 per month to receive Netflix, via a US-based Virtual Private Network server. Netflix is the world’s leading Internet television network with 48 million members in more than 40 countries, and may be available in Australia in early 2015.
Together with Apple TV, these new lower cost advertising-free options will continue to pressure the value of free-to-air television businesses, particularly as the younger generation shift their viewing patterns. In a recent survey conducted by Netflix, for example, 61 per cent of TV streamers “binge watch” shows every few weeks – that is watching between two and six episodes of the same TV show in a single sitting.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
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Andrew Legget
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The very thing that allowed the original television companies to exist is also the chief architect of its demise, technology. Before the internet and more importantly so the ability to download large media files quickly existed the only way one can see the content they liked was to look at these television channels there for they had the ability to charge large premiums for advertising.
Now that the internet has reduced the boundaries between countries, any person can go online and find a suitable alternative. I can go to mlb.com and watch live baseball matches from America and stream any movie i want through suppliers like Netflix as well as order DVD box sets for tv series which may not have finished or even started showing in Australia.
The only advantage current television companies have is in Australian content as they have more control as to when and how it can be viewed but this isn’t an advantage that is likely to have a huge impact.
Social media and other technological advances has reduced the demand for advertising services through old media and there for will have a big reduction on the earning powers of these businesses.
Any business that is linked to technology can be a very volatile field as it is an area that is consistently evolving. I actually think that media companies should try and get technology savy business people to sit on their boards (Disney has been good at this, used to have job but has recently hired CEO’s from a couple of tech businesses) so that at least they can try and stay one step ahead of the game and adapt before creative destruction happens.