As the technorati have made ever so clear in the last couple of days, Akimbo, a video delivery company that started off with a set-top box focus and later also experimented with things PC-specific, is now very much expired, as first revealed by Matt Marshall of VentureBeat, having closed the doors on its multi-million-dollar venture (47 large, if you’re talking total investments start to finish).
Quite honestly, I kind of expected this to happen.
I wouldn’t say it was guaranteed to fail. It would be silly to say so. It had a shot. The biggest one being time. A lot of hours, weeks, and months to get its brand where it needed to be. A good amount of starter cash and backup fuel didn’t hurt its chances, either.
But ever since I first heard of the company, back when it was still a relative unknown (though it arguably never got out from under the shadow of obscurity), it never seemed to have it right. Execution was just...off. Concept was nice. As are those presented by competitors. But perhaps things, when all was said and done, just didn’t click as they should have. Which happens. Most startups are destined to fail. But now, given Akimbo’s departure from the market, a question has come to mind. What is to come of those that have proven more fortunate? Does the flop of this one company portend similar closures? Will demand sustain this market of largely experimental efforts, be it those optioned by Apple or Amazon? Or will consumers just not bite, even given the choice?
Sure, it’s agonizing to think that it’ll be four years or more before this IPTV dream is truly realized by enough consumers (those based in the US, anyway) to be something that studios could subsist on for 50% or more of annual revenue. But in big business - and media delivery is no doubt big business - things do move slow. Few things catch on like wildfire. Whether it’s Hulu or the new Roku, streaming video from Netflix’s servers, or TiVo with its arrangement with Amazon, growth will continue to be less than phenomenal. Old habits die hard. No getting around that fact.
What may work in more companies’ favor, however, is the financial unrest that its currently plaguing millions of Americans and people elsewhere around the globe. I know, I know, that’s a much more macro perspective than may be necessary to have when looking at this burgeoning market of Apple TVs and TiVos and so forth. But there’s no mystery to consumer economics.
Penny pinching causes some to drop the excess, and go only for the goods they most crave. Like with many consumers’ rather fast transition from the widespread purchase of big SUVs to the almost viral adoption of compacts and subcompacts (as of late, the success of the Toyota Yaris in the states is one prime example), due to the rising cost of fuel, video viewers will find that the bulk of hundreds of television and premium movie channels is simply not conducive to smart money management. Again, we’re only seeing the start of this trend in economic decision-making, but maybe with a good bit of logical foresight, consumers may go for the great big switch. And media companies will eventually have to cease competing for time slots and simply seek the broadest and most lucrative audiences possible through on-demand means.
And while these set-top boxes cost money without subsidies obtained from service providers, consumers will see that proverbial long-term advantage, and bite the bullet. They’ll pay the standard ISP fee to get their PC connected, but many will cease to pay twice as much (or more) for the privilege for consuming digital broadcasts - as they currently do today.
As I’ve intimated above, when all is said and done, my impression is that the major forces in the on-demand IPTV space will be big brands. Primarily Amazon and Apple. Amazon may win out, since it seems like a company more willing to enter into power-sharing partnerships. I could see a three-way Amazon relationship with TiVo and individual ISPs, if only done in order to sell more boxes and serve more customers. Apple, meanwhile, enjoys shaking hands only with television networks and movie studios. Cupertino may opt to break even more barriers than it has, but chances are the market may have to force its hand rather than Mr Jobs paving new ground. But who knows. That war is still in its earliest days, and lots of variables are still in play.