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TV 2.0 – The Future of Television and the Genesis of a New Entertainment Form – Part 1
Entertainment is undergoing a paradigm shift. How, where and when we watch movies or television programs is changing. In the next decade the integration of traditional entertainment platforms with the web will transform our lives just as TV itself did more than a half century ago. For the television industry, especially, panic and worry have already set in despite the fact that they currently hold the same monopoly on our entertainment choices that they’ve enjoyed for decades. Perhaps they suspect the coming transformation in entertainment won’t be of their own making?
Because of this, some people fear the television networks are facing extinction, or at the very least are facing a challenge from the web much like TV posed the motion picture industry in the 1950s. However, any eulogies over the death of TV are most likely premature. What’s happening to television, and to a lesser extent to motion pictures, is similar to what happened to the music industry several years ago.
Viewing habits are changing, made possible by rapid advances in digital technology, and an increasing degree of interaction with the internet. Predictably, some of the power and control that the networks have traditionally had is shifting away from them and to the consumer, just as it has with music. How the networks confront this shift will determine the shape of entertainment in the coming years. They can embrace and nurture these changes, transforming themselves and securing their place in the entertainment markets of the future, or they can resist them as the record labels did, and reap equally disastrous consequences.
For the music industry, the future is already here, and its arrival several years ago was swift and chaotic. The ease with which consumers are able to digitize music, put it online, and share files – bypassing both the record labels and the record stores – literally changed the industry overnight. The labels and retail chains reacted poorly to the challenge of a digital world and to a new consumer they failed to understand. At first in denial of what was happening, the record labels became aggressively resistant, suing consumers for file sharing, and then reaping the consequences – a great deal of animosity from the public. Most of the retail chains failed to develop their on-line businesses quickly enough, and suffered ever-declining CD sales. Some venerable institutions, like Tower Records, have simply ceased to exist.
Apple, once strictly a computer company, was largely responsible for pulling the rug out from under them. As of July, 2007, Apple claims it’s iTunes store has sold over three billion songs – that’s billion – making it the third-largest music retailer in the U.S. in just over six and a half years. Music downloads overall were up eighty-five percent in 2006 compared to 2005, comprising eleven percent of worldwide sales. Meanwhile, CD sales for the same period dropped another five percent, the seventh straight year for decline. Warner Music Group, one of the world’s largest recording companies, posted a seventeen million dollar loss for the third quarter of 2007. Letting go of old business models, especially for companies as entrenched as the entertainment giants, has proven a challenge.
In hindsight, though, how difficult could it have been to foresee where the music business was heading? Sure, details are always elusive when predicting the future, but the explosion of P2P file sharing, the ease of burning your own CDs, and the introduction of the massively popular iPod in 2001 had to have given them a clue. The trouble wasn’t that the record labels couldn’t see the future coming, it was that they were determined not to give into it. Today’s consumer, however, will not be dictated to. Digital technology and the web have given them an unprecedented degree of control and it will be difficult to wrest this away. The consumer wants choice and flexibility – “my music when I want it, where I want it, and how I want it” – and in today’s marketplace, they can have it.
So how can NBC, CBS, Sony Pictures and their brethren avoid making the same costly mistakes the music industry did just a few years ago?
Video on the internet has been slow to take hold. In 1998 when I started working for the motion picture division of Getty Images, a supplier of stock photography and video, quality moving imagery on the web was considered a pipe dream by many. Computers didn’t have very large hard drives back then, RAM was limited, and distribution wasn’t easy since most people outside of large businesses still relied on dial-up. Couple this with the fact that video encoding technology was still pretty primitive, and… let’s just say the images were small and they didn’t look very good. As with music, however, some people were using their imaginations. They saw a future of faster, better computers, greater bandwidth and crisp, clear moving imagery on-line. It’s turned out these visionaries were right. Though it took time, the technology and hardware to make quality video transmission practical on the web has arrived, and it’s rapidly transforming the entertainment experience.
In March of this year, Magid Associates released a new survey on the growing popularity of watching videos on the web, and the results were surprising. The online audience has increased fifty-six percent over 2006, with fourteen percent of 12 – 64 year old Americans watching daily, compared to just nine percent last year. Most of what they’re watching are amateur clips as found on sites like YouTube. However, there’s an increasing amount of copyrighted content – clips from motion pictures and television programs – showing up on the web. Similar to what the music industry experienced several years ago, the studios and networks now find themselves facing an onslaught of piracy, and a realization that control over their product is rapidly disintegrating.
When a pirated clip shows up online, cease and desist letters are sent, lawsuits are threatened and the video is pulled from its hosting site – only to pop up again hours later. A simple web search will show that clips from a surprising number of films and TV shows are available in some form on the web. For the most part, no one is making a profit from putting these pirated clips up, but by doing so someone’s favorite TV moment can be shared with others, and can be seen anytime, anywhere. The consumer isn’t concerned about copyright, and never will be. As with music, what the public wants now is choice – access to a wide range of content, where and when they want it. This is why online piracy is happening, and because of this, there’s no doubt that the web is tied to the future of video entertainment. How it’s connected in the long run, however, is a source of very hot debate.
Some see programming shifting away from the television set and onto computer screens, iPods, and cell phones. They see the portability of these devices and the lack of network scheduling restrictions as the future of TV. By downloading a viewing application onto your computer from one of many emerging web TV portals, you’ll be able to watch programs just as you would on your set, only with greater flexibility. Others see web TV as simply vast libraries of programs available 24/7, with the web as a go-between for the content and your traditional TV set. Plug your computer into your TV, download that company’s software, and you can watch what you want when you want it. These are vastly different strategies, and the traditional media companies are scratching their heads trying to predict which represents the future. There is one thing, however, that both visions have in common, and in my opinion this is the pivot on which the next generation of entertainment will turn.
As I stated above, what the public wants now is choice, and the web enables them to have it despite whatever the television networks or motion picture studios may do to try and prevent it. Variety and flexibility are the future of television, and to a similar degree, motion pictures. The companies that can deliver this adequately to the public, in much the way iTunes has delivered it for music, will win the coming battle over the evolution of entertainment. Cable companies and satellite networks are capable of meeting this demand with the right adjustments to their technologies and infrastructures, which means that you don’t necessarily need your computer to enjoy these services. However, by integrating TV and the web we can address head-on the needs of a new consumer, and get to the heart of why video piracy is becoming such a problem. This is where things get interesting for both the existing networks, the cable providers and their emerging web competitors – all vying with one another for dominance in what the trades are already calling “TV 2.0”. And just how would this work?
Let’s say I’m in my office and I’m telling some co-workers about an especially funny part of a program I saw last night. Access to television on the web will allow me to pull it up, find the exact moment I’m looking for, and then show it to my friends. Together, we can share a laugh, and then go about our work. Later on, let’s say I’m riding on the subway, or I’m sitting in an airport lounge. I’m curious to know what the weather’s like at my destination, or maybe I’m bored and have a little time to kill. I can pull out my cell phone and get the latest weather report, watch the news headlines, or see a movie trailer. This will be great for commuters and travelers, who often have time to kill between destinations, or for students who are waiting for a class to begin.
However, do I really want to watch “Lawrence of Arabia” or “Spider-Man 3” on a two-inch cell phone screen? Probably not. I wouldn’t want to sit the family around the dining room table and watch “Finding Nemo” on my laptop, either. What I would want to do is stretch out on the sofa, dim the lights, and watch a great feature film or the newest episode of my favorite sitcom on my big screen TV, complete with 5.1 surround sound. I might also want to watch an older movie or TV episode. What I want is to access an ever-expanding video library, and to be able to find the program I’m in the mood for immediately.
What iTunes has done for music is to put an enormous catalogue of artists and recordings online, and make it available 24/7. This should be the future of TV – everything as video-on-demand. Not just new programs will be available, but old ones, too. Maybe tonight I want to see Hitchcock’s “The Birds”, or a particular episode of “Law and Order” from 2001. TV 2.0 will allow me to do that. Right now, though, I don’t have this freedom, and this must change.
In the scenario I’ve outlined above, the internet and the traditional TV set have access to the same programs, but my utilization of each is different. There are times when I want to see a program on my laptop or cell phone, but at other times I want to watch it on my television set. It’s kind of like having music on a CD, on my computer, in my iPod and in my cell phone. It’s about freedom, and portability. To me, this seems self-evident, but this is not necessarily the future that the cable companies or the various web TV start-ups are planning for. The traditional cable companies, much like the record labels before them, seem to be resisting change. They’re still bundling channels into various packages, and chaining us down to network schedules that may or may not fit in with our lifestyles. Yes, there’s TiVo, and VOD is getting better on most cable services, but it’s still shy of what I’ve outlined above.
The web TV developers have a bigger part of the picture in their sights. They recognize the need for both accessibility and portability, and they’ve ditched the old broadcast schedules for complete VOD all the time. Better yet, these services are currently free. However, most web TV services require that you download a proprietary application to your desktop. You can only view videos via these programs, and the selection of content is pretty slim on most because the motion picture and television companies are waiting to see which service sticks before licensing out their product.
As with music, Apple seems to be making the best progress. A fair selection of television shows and movies – everything from last season’s blockbuster to old “StarTrek” episodes – are available for purchase trough iTunes. By synching iTunes up to their new Apple TV hardware, and then connecting that to your TV, you have access to a limited version of the future I’m envisioning. The only problem here is that there are a lot of steps in this scenario, and downloading what you want to watch, one program at a time, is thrilling for its novelty now but could become a nuisance pretty quickly.
Truth be told, for opening up traditional television to a future of all VOD all the time, the traditional cable companies are in the best position to make this happen, but the cable providers are reacting slowly, and the networks seem to be caught up in the idea that “Ugly Betty” is going to jump ship from your living room to your office. Simply platform shifting content from one screen to another, however, doesn’t adequately address the issues. It’s a quick fix – a band aid, at best. What’s called for is integration, and when that integration occurs I predict that the screen in your living room is still going to be the primary way in which you watch television and movies. The computer screen and the cell phone will serve as additional routes, for sharing or for when you’re on the go, but won’t replace the big screen experience. Buying trends support this.
Plasma and LCD screens are getting cheaper by the day, and more and more we see people creating home theaters in their living rooms. Currently, it’s estimated that about thirty-four percent of the nation’s households have high-definition sets, and they aren’t too ahead of the curve. By February 17, 2009, all domestic stations must stop broadcasting analog signals. So watching television, whether it’s movies or sitcoms, will increasingly become a luxury experience. Given this trend, I feel that while smaller screens may offer convenience at certain times, they will never compete with the allure of HD and home theaters.
So how does the web fit into the future of television? Apart from providing secondary, and generally specific viewing opportunities, the internet won’t replace TV. It will enable television to do things it hasn’t done before. It will expand its reach, and may even provide the back-end support necessary for the vast video library I’m envisioning, but the coming revolution has been over-hyped in relation to the web. Rather than just extend the reach of traditional TV, or serve as a go-between for your screen and the libraries of content providers, the web has the potential to become a new medium, with its own unique formats. Just as your television provides you with access to both movies and its own programming, the internet has the potential to do the same – bring you movies, episodic television programs, and original content. The very nature of when, where and how people engage with the web suggest this scenario.
Statistics show that most of us access the internet in the office where the connections are faster and more reliable than at home. Given that fact, the average time spent viewing videos on the web is about eight minutes per session. That’s not enough time to watch a standard twenty-two to forty-four minute television program, but it is enough time to enjoy short content as it’s found on YouTube, MySpace or any other number of video sharing sites. Part of the appeal of these sites is that they are providing people at work, or on the go, a brief break. (Any more than eight minutes and you may find yourself cleaning out your desk!) These sites are enormously popular, and prove that there is great potential in creating content exclusively for the web. However, it would be unimaginative to think that the web can only provide candid shots of dancing cats, or babies taking their first steps. Amateur video sharing is an important part of the current web TV experience, and will continue to be, but there’s much more potential over the horizon.
In part two of this article, I’ll explore what the future may hold for the internet as a unique entertainment medium.
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