For anyone who has not read Clay Shirky’s blog post about the collapse of complex business models as it relates to the future of the television industry, the premise is that complexity within a business or industry affects its ability to acclimate to rapidly changing conditions. If changes occur quickly enough, rather than simplify and re-organize around the change, the business will simply collapse – not because it wants to, but because complex business structures inhibit the ability to change quickly enough to preserve the business. This is not a radical or even exceedingly complicated concept, and yet when applied to television, it’s difficult to imagine a staple industry of the 20th century collapsing.
Even if you don’t buy Shirky’s argument that traditional television is in danger of collapse, and regardless of whether the industry is experiencing more change now than usual, increased complexity over a short period of time combined with significant change doesn’t spell smooth sailing for an industry comprised of large slow moving companies. At the very least, it should be a red flag that traditional revenue models may need adjusting.
So with that backdrop, it was interesting to note that one of oft repeated words at the TVOT (Television of Tomorrow) NYC Intensive conference was “complex.” That was the predominant theme in the panels discussing t-commerce deployment, dynamic ad-insertion, as well as several others. The significance of these specific panels is that they are related to significant industry change. On the one hand, it’s understandable that complexities and difficulties occur when attempting new projects and ventures. On the other hand, it was not software or technical issues that proved troublesome, but the contracts and partnerships with third parties. In response to one of the panelists stating this outright, I tweeted: “The difficulty of creating interactive tv apps is the contracts and partnerships. Perhaps the biggest threat to future of tv.” This was re-tweeted, but without the last sentence. Lest the last part of the tweet seem too drastic or dramatic, Shalini Govil‐Pai, Director and WorldWide Head of Partnership Solutions at YouTube, offered a similar appraisal when speaking on “The Emerging Connected‐TV Content Ecosystem” panel at TVOT in May 2011. Govil-Pai spoke more directly to the licensing difficulties on the horizon that threaten to make less content available, to fewer people, on fewer devices and at greater cost.
In the face of needed partnerships and unavoidable licensing, how do any of the major players in the industry, be they networks, MSOs, or even production companies, provide service to their customers or clients while simultaneously disentangling from complexity enough to survive the almost certain bumpy road ahead?
The flip side is that any organization that is able to effectively minimize complexity will almost certainly have a leg up against the competition. Whether they use that competitive edge effectively (e.g. creating more interactive apps, experimentation and innovation) is another story.
One other note:
Andy Mitchell, Manager of Strategic Media Partnerships at Facebook delivered one of the keynote addresses. He was at there to talk about the Open Graph protocol that was recently announced at f8 and how it might be used to integrate a user’s social graph with television content to create new TV experiences. While a great talk and very accessible, “what did he say,” and “what’s an API?” were two of the comments overheard afterwards. Doesn’t particularly speak volumes (or maybe it does) when Social TV is an especially hot topic and everyone and their mother seems to be creating second screen apps.