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The end oftelevision aswe know it
IBM Business Consulting Services
Media andEntertainment
A future industryperspective
IBM Institute for Business Value 
 
IBM Institute for Business Value
IBM Business Consulting Services, through the IBM Institute for Business Value,develops fact-based strategic insights for senior business executives around criticalindustry-specific and cross-industry issues. This executive brief is based on anin-depth study by the Institute’s research team. It is part of an ongoing commitmentby IBM Business Consulting Services to provide analysis and viewpoints thathelp companies realize business value. You may contact the authors or send ane-mail to iibv@us.ibm.com for more information.
 
The end of television as we know it
A future industry perspective 
Executive summary
Television (TV) has an inspiring past, ripe with milestonesback to 1831, when British physicist and chemist MichaelFaraday discovered electromagnetic induction.
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Themedium came of age in the 1950s, with popular showslike
I Love Lucy 
, the 1954 World Soccer Championship,color broadcasting and the beloved remote control. Forseveral generations, the TV audience happily embracedscheduled programming. For the industry, making aconnection with consumers was a pretty straightforward,one-to-many experience…until recently.Today, audiences are becoming increasingly fragmented,splicing their time among myriad media choices, channelsand platforms. For the last few decades, consumers havemigrated to more specialized, niche content via cable andmultichannel offerings. Now, with the growing availability ofon demand, self-programming and search features, someexperiencers are moving beyond niche to individualizedviewing. With increasing competition from convergenceplayers in TV, telecommunications and the Internet, theindustry is confronting unparalleled levels of complexity,dynamic change and pressure to innovate.
“The industry is confronting unparalleled levels of complexity,dynamic change and pressure to innovate.” 
To hone our point-of-view
 
of the mid-term future circa2012, from both a demand and supply perspective, IBMconducted extensive industry interviews across the valuechain and commissioned Economist Intelligence Unit(EIU) primary research in the U.S., Europe and Asia.Our analysis indicates that market evolution hinges ontwo key market drivers: openness of access channelsand levels of consumer involvement with media. For thenext five to seven years, there will be movement on bothof these fronts – but not uniformly. The industry insteadwill be stamped by consumer bimodality, a coexistenceof two types of users with disparate channel require-ments. While one consumer segment remains largelypassive in the living room, the other will force radicalchange in business models in a search for anytime,anywhere content through multiple channels. The tech-and fashion-forward consumer segment will lead us to aworld of platform-agnostic content, fluid mobility of mediaexperiences, individualized pricing schemes and an endto the traditional concept of release windows.
“Companies must get in front of change…or consumers threaten to leave them behind.” 
Given the influence of both segments in the 2012 forecastperiod, strategists must today work amid fragmentation,divergence and opposition in the market to optimizeacross nascent and long-standing business models;across new and traditional release windows; with old andnew content programmers; and with both Internet Protocol(IP) and traditional supply chains. Given new marketimperatives and heightened operating complexities, weexpect value to shift throughout the industry, creating newwinners and losers.Today is the beginning of “the end of TV as we know it”and the future will only favor those who prepare now. Here,we enumerate six priority actions for executives: Segment,Innovate, Experiment, Mobilize, Open and Reorganize.
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Segment:
Invest in divergent strategies and supplychains for bimodal consumer types. Identify, developand continually refine data-driven user profiles inorder to optimize product and service development,distribution, marketing messaging and service
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