Jeff Kagan: Microsoft, Yahoo, Sony Follow Netflix Into TV

Television seems to be turning into the new competitive playing field. I’m talking about the kind of TV that you suddenly find offered by Netflix (NFLX) , Amazon.com (AMZN) and HULU. Companies like Microsoft (MFST) , Yahoo (YHOO) and Sony seem to be next in line. Television is changing. What can we expect?

I’m not talking about cable TV, satellite TV or even IPTV from the phone companies, but internet-based television. This is either a brand new sector or a reinventing of the entire television space. This will either threaten or work with traditional television leaders.

We are still in the very early innings of this new ballgame so there is no way we can say who the winners and losers will be long-term. All we can do is stare with awe at the changes that are sweeping across the screen. And those changes will continue. We are still in the very early stages of a very different television industry looking forward.

First we have to understand this new industry. What the sectors are and who is playing in which. We have to ask whether these new companies are in the delivery business like cable television and IPTV companies. Or if they are more like the networks who create programming. Or perhaps like independent producers.

At this early stage it’s hard to tell. Consider Netflix as an example. They are changing.

Netflix has been in the more simple delivery business for most of their lives. First they mailed DVD’s to customers. Now they stream movies over the Internet. That means they are in the delivery business.

They are not cable television or telephone companies with IPTV, but they still deliver programming over the Internet connection most customers buy from these other companies. So will they eventually be a competitor or compliment existing services?

However today Netflix is expanding and creating new programming. I am talking about the highly successful “House of Cards” series. This is not released on a more traditional model like we are familiar with on traditional TV.

This is a big first step for Netflix, which seems to be successful. So what is Netflix? Do they deliver movies to customers over the Internet? Yes they do. Do they create their own programming? Yes they do.

And they do all this without the traditional television model. That’s the change agent.

While I cannot tell you exactly what the marketplace will look like ten years from now, I can say this. It will be different. Very different. It changes on a regular basis and will continue to do so.

That could mean more traditional companies will acquire or partner with some new companies. Or it could mean the more traditional model will have a larger competitive challenge.

Which companies will continue to lead and which will fail is the big question.

So while no one knows what the future will look like, it is advisable to buckle your seatbelts because the road ahead is not paved. Like when we created the commercial Internet in the 1990’s, the bumpy road will cause many companies to fail for every one that succeeds.

As excited as we can get over this new space, and the companies that are paving the new road, we must be careful choosing the right companies to invest in and work for and partner with. They won’t all be successful, but the ones who are could become very successful indeed.