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Rita McGrath

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September 2, 2005

Myopia in the digital conversion?

Here’s a little factoid I thought was fascinating: Experts suggest that the number of television sets in the world is around 1.6 billion, with another 700 million PC’s in the world. As many of older TV’s, which are analog, fall victim to the same sort of thing that’s going on in my household (“digital TV, dude, you’ve got to see it!”) they are due to be replaced. So who will win in the move to capitalize on that? Interestingly, I’d predict two possible scenarios: a few key players (such as Dell) become the go to guys for digital sets, leveraging their hard won supply chain muscle and distribution expertise. The other, more depressing scenario froma business point of view is what some colleagues of mine dubbed “Capital Market Myopia”. This refers to individual inability to see the broader implications of collective action. In the TV case, it’s highly likely that hundreds of new entrants (some of whom you haven’t heard of as this is being written) go chasing after “just 5% market share” in this booming convergence market. In a desperate bid to be among the last players standing, participants in these kinds of markets undercut one another, train their customers to be extremely price-conscious and in general wind up when the dust has settled with a much less attractive prize than they one they thought they were fighting for.

Interested in more factoids on TV’s? Visit this web page – very intriguing: http://www.tvhistory.tv/facts-stats.htm

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