Two conversations yesterday, one with a broadcaster and one with a cable operator, had the same basic theme with regard to broadband video: "hey, we understand this broadband stuff is happening, but we don't see it as a threat to our core business YET, so we're not going to be very aggressive in pursuing it for now." Instead they are each focusing most of their resources on defending their incumbent businesses, while only dabbling in broadband projects.
With broadband revenues still nascent (the biggest concern I hear), is it wrong to "play defense" by focusing on defending current businesses instead of investing more aggressively in broadband? I think so as it leaves these companies quite vulnerable down the road.
At least three macro trends suggest that ALL companies currently in the video business should be aggressive with broadband:
Consumer behavior is changing: consumers love broadband for its convenience and choice. Just last week, TNS and The Conference Board released a study indicating that 16% of Internet users now watch TV online. Usage will only increase going forward, the "horse is out of the barn."
Technology risk is minimal: broadband video already works well, is accessible to tens of millions of users without any further investments by them and video quality is improving all the time.
Competition is escalating: capital is flowing into the industry to fund more competition. Not all of these will become winners, but at a minimum they will create lots of headaches for incumbents.
For these reasons and more, I think it's essential for companies involved in video to play offense and invest accordingly to ensure they're properly positioned for the coming broadband era.