Monday, January 31, 2011

The New Internet TV

http://www.time.com/time/business/article/0,8599,2021865,00.html

"With all the shows and movies I care to consume available over the Internet, I'll ask rhetorically, why should I cough up cash each month for several hundred channels of stuff I have no intention of watching?"

A new internet tv box to allow you to view on-demand video right off the net on your HDTV. They claim there are many other boxes that allow you to acheive this but those boxes are made of better hardware, lower prices and a broader content of shows. Roku, the small company offering these boxes, has three different boxes with upgrades of wi-fi, less video hiccups, and a remote with an instant replay button. The signature service is Netflix Watch Instantly which allows unlimited movies and TV episodes for a flat rate of $8.99 a month. Apple is a component with a costlier box known as Apple TV. Apple TV allows you to connect your Apple products to the new box. A new service like this will shut down other online services such as Hulu until they can find new ways like a pay service for the shows.

A new product like this will decrease the demand for TV's if this product is sufficient and reliable. The number of sellers for this box will increase because new producers are going to find ways to update this product in order to appeal to their customers. A change in income might force some consumers to rely on this method which will decrease their bills because they are getting rid of their cable in order to have only the internet for shows. This is not a bad deal as long as you have all the shows you enjoy.

5 comments:

Kern said...

Doesn't the internet tv box still require a TV? So it is not TV demand that would decrease, it is something else correct?

If we are distributing TV shows for such lower prices what will happen to the supply of shows in the future?

Smith said...

If these boxes stream info off the internet wouldn’t that affect the supply of service providers? What over time do you think could happen to the price of internet service?

taylor said...

You're correct Kern, it is not the TV demand that will decrease, it is the cable company demand that will decrease since consumers are getting rid of them for internet. The supply of TV shows with lower internet prices should increase since people will convince themselves that this is a bargain and will allow themselves to watch more TV. Although they will be losing their time that could be better spent elsewhere, more TV shows will be needed in order to keep the attraction to TVs. Internet providers will increase the number of sellers since the quantity demanded for internet will increase. The price of internet over time will increase since the providers will believe that they can receive more money because people will want the internet for both online and TV privileges.

kern said...

That's an interesting analysis and it will be intriguing to see if it plays out that way. I would argue the fact that the networks will be making less money and because the cable companies will not be able to support their shows as easily with decreased demand that their will actually be less shows. Either that or actors will make less money. Also do you think that DVRs or online content leads to watching less commercials and therefore companies will be less likely to advertising which would also decrease the revenue?

taylor said...

When you watch online television shows you automatically receive atleast 2 to 3 thirty second commercials. So companies will have to redesign their ways of appealing to customers since the commercial air time will be greatly decreased. This will decrease the revenue for advertising greatly unless they spark their ideas because they're trying to get the apeal during that 30 seconds.