PCs vs. TVs

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

PCs vs. TVs

McKinsey Quarterly, 2001 nr 3

Policy relevance:

In August the Commission presented a study on the development of broadband access platforms in Europe as part of its work oneEurope. This article compares PCs versus TVs as broadband applications.

Summary:

“current expectations about the industry’s development aren’t a good enough guide to the future”

 

  • The idea that broadband will finally bring about the convergence of PCs and TVs in a single device will be dashed, because the ways people use PCs and TVs, the extent to which consumers are willing to pay for added services and the individual technologies are so dissimilar;
  • The economics for the applications available on PCs and TVs, respectively, and for the companies that bring these applications to consumers are quite different;
  • Broadband will promote new revenue models and approaches to distribution, such as gaming and unified messaging;
  • Profits in broadband will remain elusive over the coming two to three years, mainly due to the cost of bandwidth and hosting, plus broadband applications are generally more expensive to develop than narrowband ones;
  • To a large extent, interactive TV applications utilise television’s broadcast stream, a big reason for the inability of PCs to substitute for TVs in the near term;
  • The lion’s share of the profit from interactive TV applications is likely to go to a few large players (mostly cable and satellite pay-TV network operators) as long as operators can exercise full control over the interactive content being offered to their customers, unless regulatory agencies intervene or alternative delivery platforms emerge.

The article concludes that within four years, people in countries that have broadband infrastructures will have access to a range of applications that are going to change the mass-media experience and economics of PCs and TVs. For now, however, the advantage lies with broadband television.

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