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SBC-TV May Not Get the Picture
The telco's plan to offer TV services already faces
an obstacle: its own CEO. By Phillip Swann
Washington, D.C. (November 29, 2004) -- SBC
Communications plans next year to begin bundling TV
programming with Internet access and regular phone service.
The telephone company, which will use Microsoft's TV
software, is expected to offer video services over
high-speed Internet lines to 18 million homes by the end of
2007.
But I predict that, for SBC, this will not be a bundle of joy. In
fact, it would not surprise me if SBC pulled the plug on its TV
division well before the end of 2007.
Why do I say this?
SBC's decision to compete against cable and satellite
operators is risky at best. The telco has little experience in the
TV business, outside of re-selling EchoStar's satellite TV
service to its phone customers.
However, re-selling a TV service is quite different than providing
one. Today's TV viewer expects a full-service menu, complete
with on-demand shows, Digital Video Recording, High
Definition TV and more than 200 channel options. Experienced
companies such as Comcast and DIRECTV struggle daily to
create the right mix of traditional programming and innovative
services. They also must battle everything from escalating
licensing fees to growing customer churn.
SBC will soon learn that the only thing that television has in
common with telephone is the first initial.
Failures
To make matters worse, SBC CEO Ed Whitace doesn't seem
to have a clue about what television should be. Despite the
repeated failures of Interactive TV over the last five years,
Whitacre offered this view of TV's future in an interview last
week with The Wall Street Journal:
"You can be watching television, probably on a thin screen
plasma screen. If you get a phone call, the number displays
on the television screen, doesn't interrupt the picture -- and it
will tell you who's calling If you wish to take (the call), you can
take it by pushing a button on your remote.
"You can sit there and view content off of your computer --
maybe it's family pictures. Or, somebody sent you an e-mail. It
will pop up on the screen while you're watching TV in the left
hand corner...If you're interested in what everybody else is
watching at that time, or maybe what's hot on TV, you can
push a button and it will tell you who's watching what across
the nation. That's what all the visionaries are predicting. I've
never been much of a visionary."
You can say that again.
Reading Whitacre's remarks, it's no surprise that he has joined
forces with Microsoft, which also believes in making the TV
more like the PC. However, TV viewers are passive and always
will be. They do not want their TV shows to be interrupted --
unless the interruption somehow enhances the show, such as
a program poll or sports statistic. Reading your e-mail or
scanning photos of your cousin Charlie will not enhance an
episode of CSI.
However, not being in the TV business, Whitacre does not
understand this. He's a telephone guy -- and the telephone is
an interactive device. Whitacre apparently thinks that the
television should be one, too.
But if the telco exec does not change his view of TV -- and
soon -- SBC-TV could wind up being a bigger failure than
AT&T's aborted effort to provide TV services a few years ago.
Yes, Ed Whitacre could be the next Michael Armstrong.
Phillip Swann is President & Publisher of TVPredictions.com.
If you would like to contact Mr. Swann, he can be reached at
703-505-3064 or at Swann@TVPredictions.com.
.
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