At the close of 2012, market intelligence firm ABI Research estimates nearly 200 million tablets will have shipped worldwide since 2009 and an additional 1 billion tablets are forecasted to ship over the next 5 years.
That’s 200 million tablets per year for the next five, which is the number that have sold to date.
It’s hard to minimize the impact of this transition. Tablets are proximal devices, like smartphones and to a lesser extent the ultralight laptops (like my Air). These are devices that we carry around with us, always within reach, the first recourse when we need to catch up, look up, or pay up. Desktop PCs seem as distant in use patterns as going to the library: the desktop PC is upstairs, or in another room. Once you buy a tablet, the desktop’s gathering dust, and then a year later you donate it to a charity to get the space back on your desk.
In less than five years, individual ownership of desktop devices will fall to near zero, and even niches like gaming and video production will transition to tablets.
The impacts of this transition will be profound. One implication: as more people transition to tablets with built-in data connectivity and as phone companies roll out more capable wireless solutions, we will start to see a turning away from cable to the home: not just for TV, but for internet. People will always have their connectivity with them. And instead of a cable bringing internet to your living room, users will wirelessly stream TV, video, and movies from their tablets to the display on the wall.
Notably, the cable companies seem oblivious to this transition, and I’m not even certain how many of the tablet manufacturers see it.
Stu Maschwitz, Your New TV Ruins Movies
Just a bit of advice for all the folks out there shopping for TVs in stores: don’t.
Ericsson has released a new report showing the rapidly changing complexion of TV use. Social media is growing like mad, and although Ericsson downplays it, an additional 7% in cord cutting since 2011 is like a tire iron coming through the windshield.
[And I wish they would stop talking about TV ‘consumption’. No one is consuming anything. Let’s just call it TV use.]
Maxwell Wessel makes the case that the status quo of today’s entrenched cartel of TV networks and cable companies could be disrupted by an alternative to cable internet: Wimax.
Maxwell Wessel, The Inevitable Disruption of Television
For about a year now, I’ve been warning producers that disruption is coming. And for about a year now, the conversation has ended the same way. Bundling good. Internet expensive. Studios infallible. If I can pull myself together before boarding a plane, I always respond with Rogers’ observation. The ecosystem will develop. But after this last trip, the standard response wasn’t enough. I felt compelled to not only to speak in generalities, but to find an actual solution. So I did.
As soon as I landed in Boston, I committed to finding a substitute for my bundled internet / television package. Something that would break away from the overpriced value chain. And in just one evening, I found my solution in the form of 4G wireless connectivity.
With a little bit of research, I found that I could subscribe to Clear — a disruptive internet service provider that leverages 4G technology instead of an expensive fiber-optic network — for just $49 a month. They would send me a small device (1/2 the size of a dollar bill) that would create a small wifi network wherever I took it. It would provide me with unlimited internet, allowing me to both cut the Comcast cord and reduce my monthly bill with my smartphone carrier. It wouldn’t be as fast as my Comcast subscription, promising about one third the speed of my existing connection, but it would theoretically be fast enough. So I ordered it.
In two days, I had a broadband connection and no Comcast bill. I can stream television shows wherever I am, take my high speed internet with me when I walk out of the door in the morning, and pay about half of what I did before (even including the cost of Hulu Plus).
For most people, this solution probably isn’t quite good enough. 4G internet speed is noticeably slower than wired broadband and there isn’t nearly as much content available through Hulu, Netflix, and Amazon as there is housed within a 150 channel Comcast bundle. But as compression technology improves, the 4G infrastructure is expanded, and the quality of internet video improves, my guess is the solution will appeal to more and more consumers. It’s disruption in its most basic form. And it doesn’t hurt my thesis that Time Warner, Comcast, Cox, and the Dish Network represent four of America’s 19 Most Hated Companies. People are primed to embrace disruption in telecommunications.
4G is not going to cut it for most people, even for me. I have 4G on my iPhone, and I used it as a connection when in transit or hotels that charge for internet access. But it’s too slow for watching Netflix, in general. LTE-Advanced, also called 4.5G, on the other hand is theoretically capable of up to 1 gigabit, around 10 times faster than 4G, but in practice it will only deliver 15 megabits per second, only a hair better than 4G’s normal 12 megabits.
But the thinking is right. Imagine a hypothetical 5G standard, which actually delivers 1 gigabit/second. I am predicting that we will see that come about in the next five years because the adoption of high performance mobile devices — smartphones and tablets — is where the action is today, and the benefits of always on connectivity are so great.
So, then we will see the end of the cable internet choke point, and the collapse of the old TV cartel. Yes, today you need the cable connection anyway, so forcing people to buy the triple-play of TV, internet and phone service seems to make sense. But everyone has a cell phone, and uses that preferentially, so the phone line via cable is superfluous. Once the internet via cable becomes superfluous the TV cartel will break down.
We will be getting our internet connection from our mobile devices, and pumping the video and audio stream to the dumb TV in the corner from there. No cable boxes. No cable companies. No cable bills. No cable TV networks.
Twitter changes the way that third-party clients can interact with the service, tightening the clamps that they put in place last year. Basically, that end of the ecosystem is effectively dead.
Matthew Panzarino, Twitter API Changes Set Maximum User Cap for 3rd Parties
There’s no way to sugar coat it. These changes effectively kill off the growth of the third-party client ecosystem as we know it. Twitter wants people to be using its official apps and seeing tweets exactly as they’re displayed both there and on the web version of Twitter. This has a lot to do with features like Twitter cards and advertisements, which in turn have a lot to do with Twitter’s partnerships with media companies and brands.
The silver lining, if you can call it that, is that your favorite clients that currently exist will likely stick around and there’s nothing that is going to stop you from using them or the developers from continuing to work on them. The caps are sizable and there is room for many, like Tweetbot, to continue to grow.
But it likely does kill off the desire for others to get into the client game, which is just fine with Twitter. And, at some point, those clients will hit their maximum limit. That’s when their developers will start having to ask some hard questions about their business.
The future is all about Twitter and its official apps, you might as well get used to it.
Panzarino lists all the tech specs of the API throttling, but it doesn’t matter. It’s over. Get used to official Twitter clients.
Twitter doesn’t want to be an Erector Set, where anyone can build a crane or a race car or a bridge. They want to build a well-engineered customer experience, where Twitter can push sponsorships, new sorts of pages, new kinds of inline expansions of URLs where they can pull in media content, and where they can make deals with the publishers of that media.
Just think about the possibilities with TV. Imagine clicking on a URL from HBO that allows a sixty second clip from Game Of Thrones to be run, along with an HBO banner along the bottom. But the context for the URL to be expanded has to be managed in a specific way across all clients, so that Twitter can get paid by HBO, and where customers can rely on a consistent experience.
Twitter is headed right into the central DNA of medialand, and no third party clients are invited along for the ride unless they have already been absorbed as organelles already, like Tweetie and Tweetdeck. The rest are evolutionary dead-ends.
Rebecca Greenfield collates a bunch of commentary about the slowing growth — almost non-growth — of TV subscriptions in the US. Around 400,000 Americans cut the cord last quarter, but cord-cutters aren’t the trend to watch: it’s cord-nevers.
Rebecca Greenfield via the Atlantic Wire
Cord-never numbers are particularly hard to measure. A cable company, of course, can’t report the amount of people who never subscribed to them in the first place, but we can do some piecing together to get an idea of the changing trends. U.S. census data found that 1.8 million new households were formed, but that only 16.9 percent of those signed up for pay-TV services, according to Ad Age’s Dan Hirschorn. The TV industry has been flat for years; U.S. households continue to rise. Meanwhile, as cable subscription rates have stayed flat, Internet subscriptions are on the rise. Comcast added 156,000 net broadband subscribers, an 8.4% increase; Time Warner added 59,000 residential high-speed Internet subscribers. While something like 100 million U.S. households subscribe to TV services, the U.S. 2010 census data had 120 million households with Internet — those numbers have only risen since then, with these companies reporting increased subscriptions. And what do people do on the Internet? Watch things. Though the most popular Internet activity, as of 2010, was social networking, video saw a 12 percent increase, according to a Neilsen report. Though, those numbers include people with cable.
These cord-never numbers matter more than the cable-cutters because the people who tend to not ever sign up for cable are young — and the youth is the future. Americans ages 12 to 34 are spending less time in front of the TV, found another Neilsen study. As of February 2012, for three quarters in a row, there have been declines in viewing among Americans under 35, The New York Times’ Brian Stelter reports. He attributes this decline to a shift to streaming. “Young people are still watching the same shows, but they are streaming them on computers and phones,” he writes. Right now the cable industry has maintained stable subscription rates because of an elderly population that’s watching television more, adds Stelter. But, those people won’t be around to change the future. The broke twenty-somethings who survive off of Hulu, Netflix, bootleg streams of their favorite shows, and stealing each others’ HBO Go passwords now, might get used to a life without paying for cable, causing a generational shift in the way Americans consume things. That’s what the cable companies should worry about.
And some people are simply watching less of the mass-marketing oriented Hollywood mumbo jumbo, and doing other things.
I expect a revolution in what we call TV, and it will emerge from the rise of the second screen, and the separation of advertising revenue from broadcasting (see Social TV and The Second Screen). Imagine if Twitter built a variant of its tool that was geared to a richer social experience around TV. And imagine that millions of people watching the NBA playoffs are using that app to socially experience the playoffs, running the game on the dumb box in the corner and the Twitter app on the iPad or iPhone or laptop. And imagine that Nike decides to pay Twitter for ads on the second screen. How will the NBA or ESPN respond? What law is being broken?
This is like cord-cutting, metaphorically. It’s cutting the link between advertising dollars and the ‘owners’ of the TV products.
So the revolution comes when the networks and the cable companies loose a large slice of their ad revenues. It will be just like the newspapers losing the classified business to Craigslist.
On the other side of that collapse will be new TV, but first it will all fall to bits. And then I will finally be able to buy access to a single NBA playoff game, or just the Women’s Beach Volley Ball at the Olympics, or just Game Of Thrones from HBO, because the natural unit of TV is a show, an episode, a game, just like the natural unit of music is a song, as iTunes proved.
Cable providers starting to act like cell phone networks: metering bandwidth and usage. What will the Justice department do?
We have officially passed peak TV:
Tess Stynes via WSJ
Global television shipments fell 8% in the first quarter from a year earlier, as LCD-TV volume posted its first year-over-year drop, according to research firm NPD Group.
LCD TV shipments fell 3% to 43.1 million units from a year earlier and were down by a third quarter-to-quarter. World-wide TV shipments fell 32% from the fourth quarter to 51.2 million.
As TV becomes absorbed as ‘just another sort of media’ by the Web it is being transformed into New TV. New TV is about a swarm of devices — smartphone, tablet, PC, dumb display, but not just a dumb TV in the corner.
Demand for gigantic monitors will decrease — except for the older demographics — because people aren’t just using TV in the living room: it’s wherever they are, using whatever displays that are available. And the payback on a 50 inch bulb decreases if you are watching in bed, on the train, in the bathtub, at a friend’s house.
The WSJ piece makes no effort to thread these numbers into some larger societal trend, which is a shame.
Doc Searls zooms in on ESPN as the biggest impediment to New TV:
Doc Searls - How Apple will turn the Net’s top into TV’s bottom
The main thing that keeps cable in charge of TV content is not the carriers, but ESPN, which represents up to 40% of your cable bill, whether you like sports or not. ESPN isn’t going to bypass cable — they’ve got that distribution system locked in, and vice versa. The whole pro sports system, right down to those overpaid athletes in baseball and the NBA, depend on TV revenues, which in turn rest on advertising to eyeballs over a system made to hold those eyeballs still in real time. “There are a lot of entrenched interests,” says Peter Kafka in this On the Media segment. The only thing that will de-entrench them is serious leverage from somebody who can make go-to-market, UI, quality, and money-flow work. Can Apple do that without Steve? Maybe not. But it’s still the way to bet.
Doc doesn’t make the analogy to the old music system, where the labels owned the talent, the distribution systems, and were in tight with Tower Records and all the rest of it, but it’s very similar.
Sports programming is one of the few areas where TV is growing. So making a deal with ESPN and others (like the World Cup and other soccer leagues, as was rumored earlier in the year) could be turn out to the Gordian Knot. And who more likely than Apple?