Innovation case study for television distribution business

Topics: Television, Internet television, IPTV Pages: 6 (1939 words) Published: March 30, 2014
1. The television distribution industry is in transition, as alternative distribution technologies and new business models emerge. Use the technology cycle to assess the state of technological change for television distribution. What part of the cycle is the industry in now and what is the future for distributing television? What is your prediction about the potential impact of ‘cord cutting’?

Based on technology cycle theory and current state of distribution technology in the market, I conclude that the industry is in “Era of Ferment”. The “Era of Ferment” is defined as “The new technology might offer breakthrough capabilities, but there is little agreement about that the major subsystems of the technology should be or how they should be configured together” (Schilling, 2010).  In current distribution business, cable company (Rogers, Cogeco and Shaw) was the dominate players in distributing television for so many years. In recent years, telephone companies such as Bell and Telus spent billions of dollars to upgrade their existing network to use Fibre distributing television services to compete with Cable companies in bundling their other services. However, the business model of phone companies is not much different from the model of cable companies. With the entering of the Netflix and Apple TV etc into Canadian market, the business models are evolving from distribution of TV channels through cable/fiber to distribution of individual content through Internet. TV views are not restricted by what TV channels are showing but they are picking what they want to watch and when they want to watch it. This new distribution does offer breakthrough capabilities but at the same time there are major shortcomings on delivering live TV and high definition TV programs to millions of viewers, which are most TV subscribers are accustomed to get nowadays. That’s why we are in an era that new technology is emerging but there is no dominant design selected yet. For ‘cord cutting’ practices in Canada, even though the new distribution way is getting more popular with 29% of English-speaking Canadians subscriber to Netflix, (Michael Oliveira,2014) it is hard to consider it as the major threat to cable/IPTV distributors for now because of the lack of live sports program and high definition programs. As most of the subscribers of the Netflix are using it as the supplement service as complimentary to current TV services. The cable and IPTV companies are also adjusting their strategies to bundle their services together with lowered prices for TV and gaining more HD or live sports content. It is reflected in the NHL deal Rogers signed in recent months. (Dan Rosen, 2013) Rogers is also aggressive in providing discount for bundling services as well. As even ‘cord cutters’ will need internet and cellphone services, cable companies are using these two services as the main attractions to prevent customers from cancelling all services together and adding the home phone and TV services as the part of the bundles. There are more changes needed from cable companies and IPTV service providers to fight the threat of the distribution content through Internet. Another big factor is demographic reasons. The older generation is used to use TV as the main source of entertainment. They are using more and more internet to get information and entertainment. But TV services have been a big part of their adult life so it is hard to get rid of the service. For younger generation who is not attached to TV but more on Youtube and Netflix services, it is very common for them to not subscriber to TV at all. So ‘code cutting’ process could be a generation process as more and younger generations are abandoning the TV altogether.

2. There are many options available for viewing television content online. Do you expect that there will be a dominant design for watching TV online? What factors will influence the emergence of a dominant design? What advice about timing would...
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