Media Convergence: The Big Miss

I was reading the news recently and saw an article on a new digital streaming service out from NBC Universal in 2020. I had to chuckle a bit when I read the article, since it seemed so anticlimactic in light of so many other streaming services available today. From Netflix to Hulu, to HBO Now, digital subscriptions have already turned the entertainment industry on its head.

It wasn’t always like this. Twenty years ago, Cable and Satellite providers owned the entertainment distribution channel. Broadcast television was still relatively popular. 

Around 2003, I started working at NBC (later NBC Universal). One reason why I wanted to get into media was something most people didn’t hear of then (and actually know little of now) - digital convergence. 

At the time, digital convergence referred to entertainment, multimedia, and print all migrating to digital mediums and platforms. Today, this is called media convergence, as the meaning of digital convergence has itself changed to encompass a broader range of technologies. 

Amongst technologists, this push seemed to be a logical next step in the evolution of entertainment and multimedia communications. To the broadcasters and cable people, and die hard print media enthusiasts, it represented something else… A new threat to their livelihoods. So it should not come as any great surprise that the major media firms had a big miss when it came to digital (now media) convergence.

In my opinion, the major media properties missed the boat on what has proven to be a lucrative sector for three main reasons:

• Cultural resistance to change
• Epic misfires
• Lack of a coherent digital strategy

I will expand on each of the points above here.

Cultural Resistance to Change:

There were clear indicators that the world was rapidly changing back in 2003. The metric that no one seemed to be paying attention to was the explosive growth in home broadband and WIFI. In 2002, 5% of homes had broadband; by 2008, this rose to 55%. In 2016, broadband was in 92.3% of homes in the US. Why was this important? Streaming on dial up was terrible. Broadband was a requirement for streaming without excessive buffering. Even as these changes occurred, there was stiff resistance from the cable and broadcast side of the house. They failed to recognize how much change would occur in such a short period of time. At best, this element was disinterested in transforming. In my own experience, they were hostile towards IT and any new ideas. The inability to transform set a stage for a collision course with obsolescence. 

Epic Misfires:

As the changes in the marketplace were occurring, there were huge mistakes that the industry was making with regards to broadband and the internet. Two which come to mind for me were NBBC and iVillage. NBC tried to establish each of these initiatives through large cash infusions; in both cases they were colossal failures. The net effect of both efforts were validation to internal critics that this technology shift was really just a fad and too expensive and risky to commit to. 

Lack of a Coherent Digital Strategy:

During this time, the mainstream efforts of broadcasters was focused on IP protection and anti piracy. They spent millions on fighting against the Tivo DVR. The failure to invest in any streaming platforms and digital transformation was based on a lack of understanding of what was needed for transformation, and led to catastrophic misallocation of resources. 

Combined, these three factors misguided the industry away from evolving… And cost the once vibrant industry its primacy in home entertainment and media.

In my next article, I will discuss the current and future state of streaming platforms, including the leading metrics to watch as the transformation of media convergence continues.