Case Teens Turn to Net for TV Will the television become extinct? Networks and movie studios will…

Case

Teens Turn to Net for TV

Will the television become extinct? Networks and movie studios will make sure that we always have programs to watch, but is the television set itself on the way out? Perhaps, among some groups of viewers. According to a survey by E-Poll, more than 25 percent of young men between the ages of 13 and 34 now watch video on devices other than televisions. In addition, three out of every four consumers ages 13 and older have watched videos on their desktop computers at some time. Portable laptops, cell phones, and iPods are other video outlets. Young teens between the ages of 12 and 14 own and use a variety of electronics regularly, including computers, TVs, DVD players, and cell phones, according to another survey. About 2 percent of U.S. households do not contain TVs, despite the push for larger screens and the move to high-definition programming, because people can watch their favorite broadcasts online.
What do all these statistics mean? Basically, that consumers’ viewing habits—from news to movies to music videos and TV shows—is shifting. “Things are changing quickly, and it’s likely that the teens surveyed by E-Poll . . . are much more familiar with the various ways they can watch video,” observes industry expert Debra Aho Williamson.
“In fact, I believe that young people will expect to be able to watch TV [shows] anywhere, anytime. It will be a part of their everyday life, just as mobile phones are today.” Networks and movie studios are beginning to take serious notice of this trend. Although paid video downloads are still the most profitable for producers of the content, ad-supported video streaming is becoming increasingly common. One research firm estimates that this business will bring in $117 million in revenues for the producers of primetime and daytime TV programming in a recent year. That’s not a huge sum, but it is nearly triple the figure for the previous year.
These changes affect the product life cycle of televisions and the way marketers may be able to generate consumer interest in turning on the TV. One way is to promote an easy and inexpensive way to transfer online video to TV. Online download services like Amazon Unbox and AppleTV are slowly catching on. But another, obvious direction the television industry could take is Internet TV networks. Already, the founders of Internet phone service Skype are offering Joost.com, an Internet TV network. Users can visit the network’s Web site, download the most recent version of the Joost software, and sit back to watch TV shows and movies from such content providers as Warner Brothers, Sony, CNN, PBS, Major League Baseball, and the NHL. Joost doesn’t offer a broad selection yet—you can catch a current episode of ‘CSI’ or the classic ‘Lassie’ series—but the mere fact that it exists signals a change in the way consumers will be viewing TV programming. “We have good content and an increasingly larger library,” CEO Mike Volpi points out. “If you showed up as a user six months ago, you saw a couple music videos and some old movies. Now we have a lot of good stuff, and we are adding new content everyday.”
Whether Joost succeeds in the long run, establishing its brand in the minds of consumers, or morphs into something else is a key challenge for marketers. As rivals begin to compete for online viewers, Joost has an opportunity to capture the attention—and perhaps loyalty—of viewers. One expert suggests that the site create an overall look or theme and ensure that all Joost ads, both online and offline, follow the same format in order to send unified messages to consumers. They say that viewers should be able to glance at an ad, logo, or slogan and know instantly that it belongs to Joost, just as they do when they see the NBC peacock and the CBS eye

1. At what stage would you say television is in the product life cycle? What strategies might TV networks and manufacturers employ to extend the life cycle of their products?

2. The Internet is changing the way entertainment is delivered to consumers. Do you think in the near future more Internet TV networks will be created? Why or why not?