Channel Surfing, Erosion & Networks Treading Water
Sunday, September 18, 2005
First it was the VCR. Then came the proliferation of cable, satellite TV and DVDs.
Despite wave after wave of new competition, America's broadcast networks, the most popular purveyors of television for six decades, have maintained their primacy among viewers, diminished but not defeated.
But the worst may be yet to come.
As a new fall TV season dawns, the nation's big broadcasters -- ABC, CBS, Fox, NBC and two smaller networks, UPN and WB -- face a challenge from a host of potentially landscape-changing new technologies.
These technologies not only threaten the networks' increasingly tenuous hold on the mass audience, but could fundamentally alter the experience of watching TV itself.
The very function of the networks -- picking the shows and dictating the day and time viewers have to watch them -- is gradually giving way to an age in which viewers take over those roles, with a much broader selection of programs.
Some of these new competitors are already in springlike bloom:
· By the end of the year, according to Kagan Research, 23.9 million cable and satellite TV homes will have access to video on demand (VOD), which enables viewers to order programs for instant viewing at any time. Once restricted to movies, VOD now includes a growing menu of recently aired TV programs, such as HBO's "The Sopranos."
· About 5.5 million homes, according to CBS, now have digital video recorders (DVRs), the newfangled devices that greatly simplify the apparently mystifying task of recording and playing back programs. DVRs such as TiVo also enable viewers to "pause" live broadcasts, and skip commercials -- a function that threatens broadcast television's economic underpinnings.
· TV is increasingly going mobile. New video-capable cell phones and personal digital assistants (PDAs) can play brief news and sports clips, as well as short entertainment serials known as "mobisodes." The phones are common enough that they're being advertised on network TV, and major producers such as the Walt Disney Co. are exploring the mobisode market.
· Phone companies, which have been promising to enter the TV business for more than a decade, may actually start doing so soon. Verizon and SBC, once known as Baby Bells but now diversified telecommunications giants, have each begun testing fiber optic-based systems that could deliver an alphabet soup of TV products and services -- from VOD to DVRs to hundreds of high-definition programs -- to household customers next year. While regulatory questions remain, "we're moving very, very aggressively to enter this market," says Jeff Weber, SBC's vice president of product and strategy. Verizon, the Washington area's dominant local phone company, won a franchise for its souped-up TV service in Herndon this summer and is applying for similar approvals in 200 communities across the country.
Still another challenge is bubbling up from the Internet. With high-speed connections in nearly 60 percent of the country's homes, video files are beginning to fly around cyberspace just as text and music files have for years, auguring a day when old "Simpsons" episodes will be traded as easily as the latest 50 Cent or Mariah Carey song. Some Web video content has already proved more popular than its televised equivalent; the streaming audio and video of the recent Live 8 concerts, for example, drew more viewers online than they did on MTV.