Consuming TV, Consuming Software
Most people in the US subscribe to bundles of TV content that is packaged through a 3rd party. There might be 3 or 4 tiers to an offer. A while ago, those people that packaged TV content for you also started to offer on demand services (or pay-per-view). Over the last few years – the ratio of the on demand to the all-you-can eat model has started to shift. Increasingly people use Netflix, Hulu, and iTunes to consume only the shows they want to watch (and usually ad-free too!). Read how an estimated 800,000 US households abandoned their TVs for the web.
The math is pretty simple. Most people are lucky if they spend less than $700 a year for cable. If you could buy only the shows you want to watch at $8.99 with Netflix ($110/year) and 15 must see shows at $40/season – $600. Together that adds up to about the same you might pay for an entry level subscription. If you watch more than that, go with your monthly plan. For a lot of people – the ability to just consume what they want is compelling and driving a big move towards pay-per-view. The internet and the iPad are also changing how you can get and watch content.
It’s no wonder that Comcast is trying to buy NBC.
I happen to think something similar is going to happen in the world of software – not just consumer software either – but full fledged business applications. Today, content providers (software publishers) offer their products one way or the other (subscription or pay as you go). But increasingly, because of competition, globalization, and SaaS, this is changing, and vendors will do both.
I think its good for customers and publishers to create a more vibrant and dynamic marketplace. More options to purchase brings more customers to the table, decreases piracy, enables new ventures and creates a new playing field for software vendors to compete with one another on. Agree?