TV born 1939. RIP 2039? Part 3 - the Internet
2000 - 2019: The Internet Disruption
The internet connects everyone. Literally. Digitally. Instantly. Globally. It turned the world of entertainment upside down. All media: Photos, audio and video, games, most magazines and newspapers, and many books, once recorded on film, tapes, records, or paper are now simply bits, distributed at (nearly) the speed of light over the network of networks. For decades TV was the preeminent media, dominating our time and attention. Not anymore. The Internet is king.
Flicks on the net kill Blockbuster
Blockbuster in 2004 had? 25% of the video rental market, $5.9B in revenue, 9,000 stores and 85,000 employees. Netflix, with the internet’s help, killed it. Netflix started with DVD’s. Unlike VHS tapes, DVDs looked great and were mail-friendly. Add the internet's burgeoning power to order your movie from your new home computer, and Netflix's DVD rentals exploded, surging from nothing in 1997 to over $1 billion in ten years. But the Netflix rocket needed more speed to reach the stratosphere.??
The rise of broadband and the ascent of streaming
The internet hasn’t killed Cable TV, yet. But its exponential speed increase has made the technology and infrastructure of cable TV obsolete. Cable TV used a thick wire, and a proprietary, complex and expensive network of video specific signal modulators, demodulators, amplifiers, and routers to connect every TV to the cable “Headend”,? the master facility for receiving, processing, and distributing television signals throughout a cable television network.
Once those cables stretched into homes, something revolutionary emerged on those same cables: home internet speedy enough to stream video. Ironically, the "triple play" – bundling TV, phone, and internet on those same wires – planted the seeds of cable TV's downfall. By 2005 most homes in the USA had ‘broadband’ internet access and YouTube, the ultimate video revolution, was born.?
YouTube explodes from zero to 2.5+ billion users
YouTube was a true bolt from the blue. It had no limits on what or how much you could watch, at no cost, without any special hardware. Anyone with an internet connection could watch or even upload a new video with a click. Video changed from something a team of pros created and a few large corporations distributed, to something anyone could make and share with the whole world within minutes.?
Google, with remarkable foresight, snatched YouTube for a mere $1.6 billion in 2006, nurturing it from 10 million users in 2007 to 2.5 billion users in 2024, worth approximately $200B
The ‘fast enough’ internet,? 1 mbps, was also just what Netflix needed to start streaming in 2007. With little physical infrastructure to burden them, Netflix embraced digital delivery as quickly as Google, transforming seemingly valueless old shows into valuable virtual assets. Gone were the days of too few entertainment options; Netflix offered a click-to-watch universe of thousands of shows, 1,000 in 2007. 20,000 by 2010. No more commercials. No more tapes or disks. Just more shows, instantly, cheap, anytime. In three years Netflix subscribers tripled and video stores started to close.?
Roku beats Apple and Netflix wins (again)
Functionally TV’s have 3 parts:
One week after Netflix launched its streaming service in 2007, Apple launched the Apple TV, the first dedicated streaming device. Since TVs were notorious for low margins and endless price wars, Apple aimed to sidestep this by focusing on the "brains" of the television experience. They recognized that the computing components (HDMI, Wi-Fi, Bluetooth, compression, encryption, voice recognition, OS, browser) advance significantly faster than bulky display hardware. This is why we typically replace our phones every three years, while TVs linger for seven.
A year later, a $99 competitor blew away Apple's $299 offering. Roku (a Netflix spinout) with built-in Netflix support (unlike Apple TV), became the gold standard for streaming. Eventually, the "smart stick" technology migrated back into TVs, culminating in the era of "smart TVs." The more TV’s that could watch Netflix, the faster it grew.?
Mobile Video Explodes
For those of us who grew up watching TV on TV, watching on phones seems strange. Their screens are small and hard on old eyes. But for younger folks watching on an iPhone (6.1”/15 cm, 2532 x 1170 pixel OLED display) at a (unfortunately) typical 8”/20 cm away from the eyes, offers a nicer display and a wider view angle than a 55 inch TV display just 75 inches away. View angle, not size, determines ‘how big’ the screen looks. A one inch screen mounted in glasses one inch from our eye looks huge, larger than a 60 foot iMax screen (unless you are sitting closer than 60 feet away). Plus smaller is cheaper. For this and other reasons the world loves mobile media.?
In 2009 TeliaSonera launched the first wireless 4G network in Stockholm and Oslo. Unlike its predecessors, 4G was fast enough to watch video. But it wasn’t until Apple included 4G support in 2012’s iPhone 5 that mobile video exploded. Within five years people watched more video on their phones than on their PCs. Thanks to mobile, the internet, not TV, dominates our screen time, with 6.5 hours on the internet, versus 2.9 hours of TV.?
Next - Part 4: 2020’s. The demise of broadcast and cable TV