The annual event winding down in Las Vegas probably won’t, but it should. Electronics manufacturers filled 1.9M square feet with products including many that could lead Big Media off what TiVo CEO Tom Rogers playfully refers to as the “digital cliff.” Instead of developing strategies to deal with the challenges, most companies “kick the can down the road,” he tells me.
He makes a compelling case. For example, several products likely will lead advertisers to wonder how long they should continue to pay big bucks for TV air time. It isn’t just that viewers can automatically zap a message with a device like Dish Network‘s Hopper with Sling DVR. (Or TiVo, for that matter.) People can simply ignore ads by shifting their attention to a smartphone or tablet computer. Cheap and powerful tablets were ubiquitous at this year’s show — sales will be huge this year — and Nielsen says that 41% of owners use them daily while they watch TV.
CES also should terrify pay TV execs who’ve scoffed at the idea that millions of subscribers may soon cut the cord. Although it isn’t a major problem yet, the growing array of inexpensive video alternatives — and smart devices to access them — suggest that things could change in a snap. Aereo used the event to announce its plan to expand to 22 cities this year. Redbox Instant By Verizon also laid out the plans for its new streaming service while AT&T said it will launch one of its own. In addition, the place was crawling with people who produce and distribute videos for the Web. They’re convinced that a significant minority of viewers soon will consider them to be viable alternatives for entertainment and information.
The wind is shifting in their favor as people increasingly watch individual shows when they want from DVRs and VOD, instead of linear networks and their schedules. Productions on Netflix, YouTube, Amazon, and other web-based services have just as good a shot at popping up as conventional TV shows do when viewers use smart TV sets and devices to search for something to watch. Samsung TVs have an impressive voice-activated program; it will come up with recommendations even if the user asks a question as vague as “Is there anything good on?” Google TV also showed surprising strength; the video search product was available in a stand-alone box made by Asus as well as in devices from Sony and Vizio, and will be built in to some LG television sets.
But while media execs probably should be worried, most seemed relieved to be able to join in the CES orgy of self-congratulation. It was a contrast to last year when the media and tech camps were battling over the Hollywood-supported legislation to fight Internet piracy, and Dish stunned broadcasters by introducing its ad-zapping Hopper. News Corp CEO Rupert Murdoch tweeted that this year’s convention “confirms America still the land of innovation and entrepreneurship.” Wells Fargo’s Marci Ryvicker says that she left feeling “incrementally better about the TV ecosystem.”
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