Technology, Venture Capital, Private Equity

Every once in a while, I come across an article on how the television is going to become very smart in the future. It is one of those fantasies that just refuses to die. Interactive television, the merger of the TV and the PC, browsing while watching television, online chatting and sharing instantaneous feedback on TV episodes – every such conceivable manner of making this marriage of the “dumb” and the “smart” happen has been and is continuing to be attempted. But, my take is that unless certain key aspects of technological match making are understood, this may turn out to be a case of the priest being more interested in the marriage than the bride or the groom.
Interestingly, though one may be inclined to believe that convergence as a concept was born in the information technology era, in fact, it is much older than that. For instance, there have been attempts in the automobile era to marry the airline and the car to create a James Bond-ian kind of vehicle which can both fly in the air and run on land. There are numerous others as well, some which remained techno fantasies, while others which succeeded in finding an end utility in the real world.  The big question worth deliberating on is what determines which ones will work and which ones won’t. To that, I’d like to borrow a (much abused) concept from the world of corporate finance – “synergies”. The key in my opinion in making this work is really the synergies in bundling products together. Take an example of a converged product that has actually worked – the fax-photocopier-printer combo. It is quite clear that the basic technology in all these three is actually common, which is the ability to replicate or print paper documents. Hence, there are immense cost and other benifits (like saving on space) in bundling them together. Similarly while the DVD/MP3/Cassette player combined has been a success the music player/television or the DVD/television combines haven’t worked. Certain applications like camera phones or music phones have worked despite not having a seemingly common technology. However, they do meet a common need, which is to do things on the move. So, it is important to identify a common ground either in terms of the technology or end need and be able to deliver a “synergistic” product that will uniquely meet that need.
Now, lets analyze the case for a television and PC combine. I recollect from a seminar on digital technology that I attended some time back, when one of the so called experts gave a very animated talk airing his favourable views on why he thought this was imminent. The expression he used was that TV was moving from the “soak mode” to the “seek mode”. The example he gave was a hackneyed one of how a Formula 1 fan can view his favourite driver from different angles and even from the driver’s own seat. And viewers would no longer be content just “soaking” information, but would actively “seek” information, like demand different views of a car race, or pause and seek textual information on a particular event in the History Channel etc. Now, I have a strong feeling that this will be another of those pipe dreams that’ll remain on paper. In my defence, I’d like to ask just one question – How does a television addict get described usually? – couch potato, right? And, how does a PC/internet addict get described? – geek or nerd. This metaphor succinctly captures the point I intend to make, which is that the television as opposed to the PC, is essentially a “soak” medium and should remain one (while the PC is essentially a “seek” medium). It is meant for the viewer to switch on, stretch back and allow the damn thing to beam whatever the heck it wants to. And, if he doesn’t like what he is seeing, don’t forget, he does have possession of that all-powerful weapon thats the loathe of all marketers – the Remote Control. More broadly speaking all products / services finally have to cater to some intrinsic human need. And the one that television has been immensely successful in serving is the need for “lazy entertainment”. Now, try making it more and more “involved” and “active” and you are moving farther from this core value proposition. If you look at the television related innovations that have worked (remote control, PVRs etc), they are the ones that actually make the viewer lazier and not more active. And if the television does get increasingly more involving, finally, there would have to arise a contraption, which will have to plug this gap for “lazy entertainment” again.
In other words, the idiot box will be successful as long as it remains an idiot. Turning too smart could be detrimental to its own interest.