#242: TV is Dead, Long Live Television.
A Study of how change happens and how we should react to it - from TV to cars.
Something weird has been happening over the past decade and a half. I meet a lot of people, usually working professionals and couples in their 20s and 30s who tell me that they don’t watch television - in fact they don’t even own a TV. They don’t have a wall mounted screen that they spend their evenings staring at, as a family. For some people this is a lifestyle beyond comprehension. It’s worth pointing out that these TV-less people are consuming Netflix, Youtube, Amazon Prime, BBC iPlayer and plenty of other audio visual content. I’ve discussed with them the artistic excellence of the Blue Eyed Samurai or the gritty undertones of Happy Valley. They watch live sports, and news bulletins. They just don’t watch “television”.
Which begs the question - what is Television? Is it the device? Is it the one-to-many feature of broadcast? Is it the actual technology of transmitting moving images? The type of content? The ad-supported business model? The lifestyle and culture of family viewing? Is it the phenomenon of a tv schedule and ‘channels’? Advertising support programming? You’re probably saying a partial yes to all of these questions. And that’s true. TV historically has been all of this.
At some point in your life, either while studying science or history, you’ve been taught that John Logie Baird ‘invented’ the Television. Perhaps you’ve twigged onto the fact that many people including Philo Farnsworth competed with Baird and share the claim to that invention. Or perhaps if you’re a student of the history of invention, you’ll know that there are more than a dozen technological inventions that contributed to what we called TV for much of the 20th century. From Marconi’s work on radio waves and carrying signals, to Paul Nipkow’s scanning disc, or from early Cathode Ray Tube prototypes in Russia or Japan, to Baird’s mechanical television technology in the 1920s, or Farnsworth’s electronic versions which is the technology that scaled and became TV as we knew it.
Through the rest of the 20th century, there were many further innovations, but we would largely classify them as ‘sustaining innovations’ which solidified the central role of TV in the increasingly globalised urban culture. The PAL vs NTSC debate - which split the world of TV watching into non standardised regions, the emergence of Cable TV, the introduction of Colour, the birth of Satellite transmission, the introduction of premium channels, the arrival of videotapes, all the way to digital television and the arrival of the internet. One could argue that each of these helped to further spread the reach and power of Television regionally and globally. By the 1990s, it was the single biggest mass media worldwide, and the only way to effectively attract and capture the attention of millions of people at the same time. Some estimates suggest that 650 million people worldwide watched the moon landing in 1969. 16 million of them were in the UK, and were enabled by ‘Arthur’ - an antenna at a satellite station in Cornwall. In 1997, the funeral of Princess Diana possibly marked peak television, with a global audience of between 2 and 2.5 billion people.
The disruptive moment for Television arrived sometime in the mid 2000s with the spread of broadband Television. Youtube was a marker for the efficacy of internet video in 2005. And suddenly the empire of Television began to crumble. At the heart of the creative destruction was the availability of faster broadband all the way to fiber to the home. Broadcast television content (standard definition) requires approximately 2-2.5 MBPS throughput (4 MBPS for live sport), so as soon as homes started to get a reliable 4MBPS broadband, the phenomenon of chord cutting started to appear. Broadband transmission meant it could be a single stream (no more ‘channels’), sent to any device - which by 2010 could be a smart phone, a tablet, a laptop or a connected television set. The growth of connected devices which splintered the family viewing, and hard drives on set top boxes and time shifting meant neither the the place (the living room) nor the time (the schedule) were relevant any more. Today, outside of major global sports events such as major american sports, or the FIFA world cup, very few things create simultaneous global audiences in the billions.
So today, you have a service that can be consumed on any device, it could be broadcast or streamed, watched whenever you feel like it, with content that can range from 10 seconds to 10 hours, with a range of commercial models which include ad-free subscription options. And we still loosely call it ‘TV’. Traditional television companies have tried to fight this change by introducing HD, and 4K television all designed to make streaming harder, and by reminding us of the power of television through advertising (ironically often aired on traditional tv channels). But by and large live sport and news is where traditional television lives. The rest is Netflix, Amazon Prime, Discovery Plus, BBC iPlayer, YouTube, and more. Even if in many homes all of this is consumed on a wall mounted big screen as a family.
Somewhere hidden deep inside all of this is also the inefficiencies of television. For example, historically, you had to have a ‘channel’ to put content on air, which means you signed up for a minimum of 12 hours or 24 for hours of airtime which you then had to fill. This is the equivalent of selling music by the album - an artificial constraint. Next you have the advertisers who are paying for a target audience which can at best be approximated. You need to assume that football fans are beer drinkers, or that soap opera fans are mostly women, and so on. Worse, you don’t really know if your ad was seen or whether your glitzy million pound ad that aired at half time of a big game was exactly when half the viewers got up to visit the toilet after all that beer-drinking. And finally even technologically, pay-tv gets every channel to your set top box, and it’s only there that the encryption prevents you from watching it. It’s quite an inefficient use of frequencies, since at any point you can only watch one channel on a device. Look closely and you’ll find that newer technology usually enables business or operating models that address many of these inefficiencies.
This is fundamentally a story of change. You could either take the view that Television is dead and this is something completely different. Or you could argue that with all these changes Television is simply redefined, and lives on in a new avatar. Take a step back and look at a wider picture, though, and the story is similar for a number of industries. We are at the cusp of a similar change for automobiles, computers, and even banks, just to name 3 very well known products and services. Let’s just look at one of them.
As cars become electric and autonomous, their basic transmission technology is changing, the components are different, their intelligence is shooting up, and even the design of cars might change through the next few years. The shift to electric means that the entire ecosystems build around fuelling - petrol pumps, motorway services, may all need to morph. And V2X technologies may further change how cars are used. The idea that a car is just something to get you from A to B, has been overlaid by a lot of social and cultural symbolism. All of that might change too.
Why does any of these matter? Well every one of these little changes - whether sustaining or disruptive, opens the door for new leaders, value creators, innovative products and services. It also allows for existing players to make bets on the future. The move to colour television changed the TV experience from information to experience and it’s impact was massive - it led to a period of dominance for Sony, it paid dividends for NBC which bet big on colour TV before it was adopted by the masses, it made a huge difference to advertisers and creative industries, it made the TV central to the living room, so it changed home decor, and wall units, it made the fortunes of Technicolor and Eastmancolor who were at the heart of colourful TV content, as well as the behind the scenes businesses working on sets, and on post production. Nature documentaries and Sports shot up in popularity because of their implicit richness. An entire rebalancing of power within the broadcast industry naturally followed. And colour was still a sustaining, rather than disruptive change for Television.
These changes are much easier to spot when seen through the historical lens such as TV. When it’s actually happening, it’s far harder to define because things are still in flux. Tesla was a big winner in the shift to electric cars, at one stage possessing a market value greater than the combined market cap of the top 10 automakers globally. But it’s not clear if it will be a front runner in a decade. Clearly technology companies that provide the smarts for the cars of today, connect the data from cars to clouds, provide connectivity, intelligence, decision making and AI and analytics are all in a position to win big from this shift. What might be less visible for example is the impact on the tyre ecosystem. EVs are heavier than ICE (internal combustion engine) cars so they need different types of tyres, Autonomous Vehicles need smarter tyres. These cars are quieter, and there’s a lot more concern around the environment. So new materials are being tested for lower sound and smaller environmental footprint. There are emergent business models for tyres as a service with pay-per-mile pricing, and blockchain based tyre identity records.
A simple way to think about these changes of course is to ask questions such as these:
What are all the impact points of any change, including the extended ecosystem? For example how will insurance change for autonomous vehicles? Who will manage and repair the software in an AV? And how will the MOT test need to evolve?
Where are there hidden inefficiencies which we’ve just come to treat as normal for the product? For example, why are there still blind spots while driving a car?
What are all the new jobs to be done? For example, cybersecurity for AVs?
Which of the old jobs will no longer be necessary? If the car can find parking and park itself (and maybe pay as well)?
What is the new framing of the product or service? If the AV does not need to be driven or navigated, can we think of it as a mobile office? And what new features and services will be required?
Almost every industry is changing around us and will transform over the next decade because of a slew of technologies, from AI and machine learning, to material science, blockchain, and sensing. Understanding how the change happens and how to spot threats and opportunities - both as incumbents as well as challengers is going to be a critical skill.
AI Reading
Job Interview Cheat Code: 21 year old Roy Lee of Columbia university created an AI app that helps interviewees cheat the live coding test often administered by tech majors while hiring candidates. His argument is that the system is already gamed as the questions are all available on a website that people go and practice on / memorize so his system just shows that it needs a rethink. Also and a more valid argument is that the same companies will let you use AI to code once you’re hired, but not during the interview. Which is an interesting debate. Also it raises the question about the long term prospect of software engineering skills. You can also hear about this in the Hard Fork podcast this week from the NYT. (Gizmodo)
Crunching Innovation: Azeem Azhar talks about the impact of AI on crunching a century of innovation into a decade. And what that means for governance and policy. (Exponential view)
Longer Tasks: According to research by METR - METR Measuring AI Ability to Complete Long Tasks - the ability of AI tools to do longer tasks is increasing. Every 7 months the AI can do tasks that are twice as long as before, at a 50% success rate. In lay terms this means that your first drafts of more and more complex assignments can be done by AI, or that there is a separate, perhaps slower line where AI can do tasks at 80% or 90% success as well. (METR)
Autonomous Lyft: Lyft outlines it’s views on autonomous vehicles - Lyft's autonomous revolution: Where drivers and technology m… - and it argues that this is not a zero sum game for autonomous vehicles and drivers. (Lyft)
Grok’s new features include image Editing - Grok 3 adds deeper search and AI image editing capabilities (The DeCoder)
Amazon launches shopping AI to arm shoppers with Interests features that converts natural language requirements into specific products and brands - Amazon’s AI-powered ‘Interests’ feature automatically finds … (AboutAmazon.com)
AI Managers: Andrew Hill from the FT has an interesting take on new roles required for organisational AI - such as possibility catalyzer, and idea evaluator. Seven AI roles managers must master (FT)
Other Reading: Energy And Materials
Critical Materials Map: An excellent map of rare earth and critical materials: A visual guide to critical materials and rare earths (The Economist)
Future Grid: How to improve grid performance at low costs? Predict the weather, improve the materials, and more -The cheapest way to supercharge America’s power grid (MIT Tech Review)
EV Outlook: Road transport oil demand peaks in 2027, and emissions peak in 2028. Annual driving distances for EVs are higher than combustion engines in most markets outside the US. Plug in hybrids are growing faster than Batter EVs. There is a $242 billion opportunity for charging infrastructure to fill the gap to 2050 transition scenario. All this and more in the EV Outlook report. EVO Report 2024 (Bloomberg)
Fast Charge: BYD’s 5 min charge is a threat to other battery makers. BYD’s 5-minute charge (FT)
Energy VC: AiDASH, Exodigo, Luminance, Sensat, Urbint - the names may mean nothing to you. But they are all energy related start ups backed by National Grid Partners, the VC Arm of California’s National Grid. National Grid Partners Commits $100M To Back AI Startups Adv… (VC Wire)
Plastic Eating Enzymes: Samsara Eco has raised funding from investors including Lululemon to productionize the creation of enzymes that can ‘digest’ and decompose plastic. This is something my colleagues at TCS Research are also working on. (Forbes Australia)
That’s it for this edition. See you soon!