Station Break: Is TV On Verge of Extinction?
Tuesday, May 12, 2009; 1:00 PM
Washington Post staff writer Paul Farhi was online Tuesday, May 12, at 1 p.m. ET to talk about the latest news in the pop culture world of TV, radio, movies and trends.
Today: Is television as we know it on the verge of extinction? Well, that's a little dramatic. But only a little: With the likes of Hulu.com and other videocasting Web sites making it possible to watch TV without a TV (and without much advertising), what's to stop the piecemeal destruction of affiliates, networks and cable TV? Good riddance, you say? Oh, we have to talk...
Paul Farhi: Greetings, all...Well, I'll have more on this in an upcoming story in a few days, but here's something that puzzles me about the movement of TV programming onto the internet: Are the networks determined to destroy their affiliates, their advertisers, themselves and TV programming as we know it?
I speak of the Hulu.coms, the Fox.coms, the ABC.coms, etc., which seems very likely to do to "television" what Napster/music file sharing did to the record business, and free online news is doing to the newspaper business. If I can watch my favorite shows online anytime of the day (and I can, and do) why would I bother watching them "on TV"? The networks' answer, repeated mantra-like, is that online viewing is "additive," by which I think they mean that people merely supplement their regular TV-watching by catching up to shows they've missed online. Okay, but... But: When I can watch my favorite shows(and 90-plus percent of everything on network broadcast TV is now online) anytime I want, why would I wait for an hour appointed by people in New York to watch said show? As is, what's online contains limited commercial interruptions (and sometimes NO commercial interruptions).
This is all great for viewers--convenient, free, great selection. But play this out a bit (and it won't take long to play out) and you can see the tidal wave forming offshore. Ultimately, this can't be good for television. When an hour-long episode of a TV drama costs upwards of $3 million, how will anyone get a return on that kind of investment? When online audiences won't tolerate more than 30 seconds of advertising, and sometimes less than that, how do the economics of this make any sense? What becomes of your expensive TV shows then? Your thoughts?
Let's go to the phones.
Kota, India: TV IS ON VERGE OF EXTINCTION, that's true but if we will think about the leisure we get in watching TV, we will have somewhat different opinion. So, my question is which way is cheaper: TV or TV through Net?
Paul Farhi: Howdy, Kota (and you win the big big prize for furthest-away chatter)...Not sure I entirely get your question, but I think you're asking if it's cheaper for a viewer to get his/her TV through the net than over-the-air or via cable/satellite. Well, I guess the answer is: Which is cheaper: a broadband connection or a cable/satellite subscription? I think the former is, especially with wi-fi, which is often free. Question is, which would you choose if you could only have one; I'm increasingly leaning toward my broadband connection rather than my cable subscription.
Arlington, Va.: I didn't buy a 50" TV to watch TV on my little computer screen. So, no, I don't think TV is going away. Plus you need a pretty high- speed broadband connection to get any sort of decent quality from an Internet service. I don't get the people who watch TV on a 2" screen on their iPod or phone. Who wants to look at such a tiny screen for a prolonged period of time?
While there may be some early-adopter types out there into all these "new media" apps, look at the furor over changing just from analog to digital TV! There are too many millions of people out there used to watching TV the way they have for decades. That isn't going to change any time soon.
Paul Farhi: Yes, true, watching "TV" on a TV is a much better experience than watching it on a laptop or iPhone. But there's a whole mess of products out there (SlingBox, Sony, Apple) that enable people to connect their computers (laptop, desktop, whatever) to their TVs. Once those become cheap (and easy to use), game over. If I can easily stream anything on the internet on to my big TV, I really won't need cable for much more than live programs.
Arlington, Va.: The future destruction of the cable industry is much like the fall of the record store and the drop in sales albums. For years fans yelled to be able to buy only the songs they want, we were ignored, and Napster began the demise of the record industry business plan. Now with iTunes (etc.), the problem no longer exists.
The same will happen with cable. For far too long, people have been yelling to not make us buy 45 channels we don't watch and don't care about. We have never been offered an A La Carte pricing. We have to subsidize a ton of channels most people don't care about. Let me pay 10 dollars a month for ESPN over the Internet in HD and everything else can disappear.
Paul Farhi: It's an excellent point. Most people get dozens of channels and watch just a few. But their monthly bills subsidize everybody else's choices. It's kind of a socialist system. The internet might be the capitalist alternative.
New York, N.Y.: Hi Paul,
Someone asked during a Web chat yesterday about the future of sports on television. What are your thoughts? Three of the four leagues have prominent Web efforts going (NHL Center Ice, MLB.TV, can't remember what the NBA's is called) and the NFL...well who knows what they'll do.
But ESPN360 and similar sites have become very popular. What are your thoughts on this topic?
Paul Farhi: The pro leagues have been very clever about having it every which way, taking multiple bites of the apple. The NFL is the best example here--they sell packages of games to all the broadcast networks, to ESPN, AND they start their own cable channel with a few more games. Baseball has figured this "segmentation" strategy out, too. It makes the leagues very rich. And it ensures them maximum exposure.
Live! from the couch: Most of the TV watching the missus and I do is in the 9:00 hour, when we like to come to the living room and watch on the big screen.
None of the shows we watch are on during the 9:00 hour, to the best of my knowledge, because we almost never watch anything that wasn't already recorded on the DVR (other than live sports and sometimes the news).
We're not kids -- we're about 50. We just don't understand why you'd sit through the endless commercial breaks. We watch the spots, but on double-speed, and sometimes we go back if they're well-produced...but not the same spots over and over.
Paul Farhi: Yep. This is the future here and now. DVRs are in about 20 to 25 percent of households. They are destroying network advertising as we know it, too. Not paradoxically, the cost of network advertising time goes up and up and up, because the mass audience has becoming harder and harder to reach. At some point, however, this entire system falls apart. I think that day is not so far off.
Petworth: I don't have cable or satellite. I do have a digital HD TV. So, I can watch OTA TV, and I can connect (with one cable) my computer to my TV and stream HD shows.
I will never need to buy cable or satellite.
Paul Farhi: Right. Unlike the Napster analogy, the beauty of this is, there's nothing "illegal" about it. It's all out there, free, for the taking. So people take. But "free" is a pretty crummy business model, as we newspaper folk have been learning...
Arlington, Va.: Hulu is basically what cable on-demand should be. Why is it that cable companies don't have equally huge selection lists? If cable offered similar variety and depth via free (with commercials) on-demand there would be little need/appeal for Hulu.
Paul Farhi: I haven't checked lately, but there's usually a pretty good selection of cable series on on-demand. Not the depth of Hulu, of course, but enough for an evening or six. And interestingly, the cable industry is the most motivated to stop the online migration. They don't want too much stuff moving online until they can impose a system of "authentication"--that is, you have to prove you're already a cable subscriber before you can access the free stuff online.
Washington, D.C.: I use ABC, NBC, Fox, etc., online to watch any series I'm interested in at the given moment, especially good on cold, rainy mornings I still have to get up to walk the dog. What I watch "live" is sports. Pretty much every day. I've gotten to the point that I can't watch a show live because I haven't caught up with last week's episode. I have a connection from my computer to my HDTV so I can stream videos/shows on there, when I'm motivated enough to put the connection in (laptop, not always close to the TV). To ID my demographic: late 20s, female, educated, professional industry.
Paul Farhi: You're the kind of person the networks fear most, D.C. Once this stuff becomes simple enough for someone like me, I'll join you. Maybe I should just ask my teenage daughter to hook it all up for me; she'll know...
No name, no city: One advantage of watching TV programming on TV is precisely that it IS scheduled. This can help bring structure to one's home life -- e.g., I'll do chores for an hour between the end of an 8-9 PM show and the start of a 10-11 PM one. If I could watch any time I wanted, I'd just fiddle (ahem!) around procrastinating and never get my act together!
Paul Farhi: Wow, that's so old school! The days when some suits in New York or L.A. could get me to the set at THEIR appointed hour are fading fast. And once you get used to NOT watching your show at its "regular" time, you'll never think twice about doing it again.
Won't be getting rid of my TV or cable: because we watch a lot of sports. And it's a heck of a lot easier to try and follow a hockey puck on a big HD screen than my little laptop screen. Only football is regularly on broadcast TV; for other sports, the overwhelming majority of their games are on cable.
Paul Farhi: Yes, I'll grant you, live sports is about the only thing that isn't widely available online. (I was going to say live news, too, but many big news events are being streamed...)
RE: Live Sports on TV: I watch a lot of college ball in the fall and winter, but I record the games on the DVR even when friends are over watching. We socialize for an hour, then start the game, and by FF-ing through the tedious and countless timeouts, we can watch a football game in two straight hours and basketball in about 75 minutes.
The point being: when the online games become more available sooner (same-night), you'll be able to enjoy everything without the cable bill.
Paul Farhi: Yeah, but maybe the pro leagues are smart enough to realize that this will hurt their enormous revenue stream from traditional TV sources and they won't let their games go on the internet. Of course, the internet might also just become another "window" for them to sell for a fee. So now they'd get paychecks from broadcast, cable, satellite AND the internet. Nice to be a monopoly sports league, I guess.
Glover Park: You are obviously not addicted to or emotionally involved in any TV shows (not that that's a bad thing). While I do watch TV about half the time off the DVR or the Internet, these shows often don't pop up online until a day or so after they air. For a quality shows I'm really attached to, I'm not waiting. I think if networks produce content more people WANT to see (remake that emotional connection to the audience), then on-air TV will survive longer.
Paul Farhi: Good point. I missed last night's broadcast of "24" (don't nobody tell me what happened!) and just figured I'd catch up to it tonight online. But there IS some value in seeing it when it is first aired, instead of waiting. Maybe not enough for most shows, though...
Falls Church, Va.: How about the cost of producing an episode doesn't have to be so high if actors aren't paid $100k/per?
Television looks a lot like printed news right now. The advertising revenue stream is dropping, but costs are staying the same or going up.
Paul Farhi: Sure, the cost structure will fall, to keep pace with the potential return on investment. We've already seen that for years--it's called reality TV, which is a lot cheaper to produce than sitcoms or hour dramas. But there's a limit to how low you can go. Even no-name actors cost money, as do writers, directors, camera people, etc. etc.
Springfield, Va.: Shows like AI, DWTS, Survivor and Amazing Race will always have a "live" audience because the results are posted so quickly on the Internet. I expect more shows like these, especially those like AI and DWTS where they can supplement revenue with live tours.
Paul Farhi: Amazing Race is a good example for me. I've totally abandoned it on Sunday nights. I now watch it in bunches (2, 3 episodes at a time) online. Very efficient! There's so little advertising in the online version that it takes about a third less time to watch three episodes online. And the results are easy to ignore. I mean, do you really need up-to-the-minute results?
Arlington, Va.: Interesting discussion. Another data point: isn't the demographic that advertisers are most eager to reach (read: the ones who spend the most money) typically younger viewers? And these are the ones most likely to be up on new technology, adopt DVRs, use Hulu, etc? So if the networks manage to keep a portion of their audience who aren't savvy enough for the new tech, or just want a simple system that they're used to, aren't they still losing the audience they really want?
Paul Farhi: In answer to all your questions, Arlington: Yes. This is what's especially ruinous about it. Someday soon, the only people watching the networks' broadcasts at the appointed hours will be people like me. And older. Buh bye, advertiser-friendly demographics....
NFL Sunday Package: My husband wanted to get the NFL Sunday package for $300 last year (or some price around that). I like football (Go Steelers!) but all I could say was, um, no.
It's criminal what they charge for access to games, but people obviously pay for it.
Paul Farhi: That's capitalism, I guess...What's interesting in this vein is the tug-of-war between the NFL and Comcast (briefly, they've been fighting each other for months and months over where Comcast will carry the NFL's cable network--as a "basic" cable network or as a "premium" network. The NFL wants basic, but Comcast says it's too expensive and has declined to make all of its customers pay for something that only true fans should). I have to say, I like Comcast on this one.
I record the games on the DVR even when friends are over watching: There's NO POINT in watching a game if it's not live!
Paul Farhi: Yeah, I kinda like live events to be, you know, live. I hated seeing the Olympics on tape delay, for example. Why not just watch old game tapes while you're at it?
Anonymous: 1. Some people will watch "on TV" because of the water cooler effect or the live participation effect. "Lost" fans will watch immediately, so they can dissect and discuss it, and then watch AGAIN to find the things they missed the first time. "American Idol" won't be threatened because if you don't watch in real time it's hard to vote.
2. "On TV" is still the largest single launching platform. If you want to develop an audience you have to do it on TV. Most internet-only shows either reach niche audiences or depend on a built-in audience already delivered by TV. (FunnyorDie.com wouldn't get the traffic it did without being anchored by Will Ferrell, TV and movie star. "Dr. Horrible" worked because Joss Whedon has an enormous fan base, built through TV.)
3. Economic conditions will just change. When the fin-syn rules ended and TV networks got into the production business, they started renewing shows they produced (with marginal ratings) in order to generate larger syndication revenues. In the same way, today we see studios placing bigger orders in order to secure DVD sales. I wouldn't be surprised for a movie studio to develop a TV series that it rolls out on Thursdays just so it can advertise its movies to the ideal captive audience.
Do I think things will change? Sure. But why is that a disaster? You still haven't convinced me. Change is the natural order of things, padawan.
Paul Farhi: Boy, you know you're stuff, Anonymous ("fin/syn"? I thought it was just nerds like me who knew from fin/syn). I'm impressed.
But I think the "water cooler effect" has itself changed. Since everyone watches something different these days, the discussion isn't just about ONE show but about multiple shows. "Did you see X last night? No? Let me tell you about it..." It's a much more free-ranging conversation than it used to be, I think...
Rockville, Md.: I work for a company that makes entertainment-related software and hardware.
NONE of the developers (age 25 - 35 or so) watches live TV except sports. NOT ONE.
So where is new entertainment TV going to come from? Who's going to pay for creating it?
I'm in my 50s and I would happily watch movies and old TV shows off Hulu or DVDs for all of my viewing except stuff like the inauguration.
Paul Farhi: Excellent question. Young people seem to believe that all media should be free. They just figure someone will figure out a way to make money on it. Meanwhile, they want their (free) MTV.
Bowie, Md.: Look, nothing really bad has happened to the music industry. People still listen to the radio. People still make CDs; people still buy CDs, but also buy singles through iTunes. Artists promote themselves on their own websites, and occasionally break through, and big record companies distribute them. Record companies become distributors instead of talent developers, and they make less money, but that doesn't make me sad. Are there fewer artists? I can't really tell; it's always been hard to make it as a musician.
What's happening to newspapers is bad, since journalism is essential to the survival of our republic. What's happened to the music industry really doesn't bother me, so I can't get worked up about the death of the broadcast paradigm.
Paul Farhi: Very nice, Bowie! It's true. Records companies have been humbled by file sharing, but the marketplace has readjusted. And in some ways, the marketplace is BETTER now that it has. I'm not so sure we'll say the same about the "readjustment" of the news business, or of the TV business, but point taken.
But is it really true?: Do young people REALLY spend more than middle aged folks? I never HAD money in my teens, 20s, even young 30s -- I was saving for college, paying for college, working my first jobs to get established, saving for house down payment. I never HAD money til I was settled in my career, paid off school, saved for house down payment. I HAVE money now and actually feel okay spending it on discretionary items. I question that old wives tale that 20s spend more money. Check out their cars compared to a successful 50 year-old's car. Hello.
Paul Farhi: Well, this is one of those things that people misunderstand about TV advertising. TV is aimed at young people, in general, because 1) young people are hard to reach; they don't watch as much TV as older people; 2) young people are seen by advertisers as malleable; hook 'em now and you'll have a customer for life; 3) TV advertisers, in general, tend to be companies whose products are consumed disproportionately by younger people--fast food, video games, movies, clothes/shoes, etc. Hence, TV programming "skews" young, in an effort to attract the audience that TV advertisers want most.
Arlington, Va.: Doesn't anybody out there still enjoy scanning the channels and watching three shows at once? I would not have discovered half of the shows I usually watch if not for this TV-based practice.
Paul Farhi: Try Hulu. Much more efficient scanning!
Football on DVR: "NO POINT"? Sorry, you're wrong. I live for college football (well, just my one specific team), and I often record the game. It's partly because gorgeous fall Saturday afternoons are made for biking or lounging in a hammock, rather than lying inside on the couch, and partly because I hate the ads (especially when the same ones repeat ad nauseam throughout the game). I also don't care about the halftime report because, as I said, I only care about my team. So I will start the game around the second quarter, and cutting ads and halftime, I finish it live or close to it.
Paul Farhi: I would guess that once you start down this road (time shifting, that is) you get used to it and never want to go back. But I gotta say, except for the repetition, I actually like watching commercials during the game.
Pittsburgh: One advantage to commercial breaks is that one can get up and go do something else for 2-3 minutes during the program. We used to tape shows, but if we were trying to watch a show in a hurry, then the fast-forwarding through ads kept us tied to our chairs.
Paul Farhi: Eh. If I'm catching up on my favorite show online, I like the lack of interruptions. It's very efficient, time-wise...
Cable (Comcast, Cox) is dying: I dropped my Cox cable -- terrible experiences with them and it was worse with Comcast when I lived in their area. Let's just say I had complete sympathy for that granny who took a hammer to the Comcast location awhile back...
I am getting great digital signals now for ABC, NBC, CBS, Fox, PBS and a few others now -- FOR FREE!
And I am also a huge watcher of Hulu.com, abc.com, nbc.com and Netflix. I actually love watching shows on the computer in bed and have considered getting something so I can filter my Internet show access to go straight to the TV. I also started watching Lost on regular TV after catching up online.
It's a changing industry, just like the recording industry. It's not bad -- it's inevitable, and better for the consumer. Change can be painful on the business side, but I am loving the consumer side.
Paul Farhi: But will there BE a consumer side if TV's advertising model is destroyed by this change?
everybody pays for everything on cable: I watch 2-3 stations; my neighbor watches 2-3 stations, but they're different stations. We subsidize each other.
How will prices be lower if nothing is subsidized? It will be basically the same.
Paul Farhi: Well, that's easy: If I'm willing to pay for only the things I watch, and not the stuff I don't, it would be each channel for itself. The popular stuff would "win." The unpopular stuff would go broke. With "tiered" packages of channels, and no a la carte options, this is impossible now.
Silver Spring, Md.: I've been hearing a lot about the "death of TV" and I have to agree that unless they change the business model, the writing's on the wall. Coming from the video game industry we're slowly seeing this occur -- video game consoles (Xbox360 and PS3) are competing not just to be the dominant system -- they are competing to be the media hub in households; there is a much bigger prize out there as they not only bring in games but can also be used to access the Internet (Hulu, YouTube, etc.,), television, Netflix and connect to a server if you have stored content in the home.
The latest player in the market is OnLive.
What do you think? I think we're going to see consumers expecting specific content on demand. The positive is that advertisers will be able to target advertisements more efficiently, but it does mean further fragmentation of the market. Television on the current business model however will share the same fate as the dinosaurs unless they change.
Paul Farhi: Am unfamiliar with OnLive, but it sounds like something Netflix is going to be doing later this year--offering a library of something like 10,000 programs over the internet, which can then be streamed on a computer or onto a TV (with the right equipment). Sounds like a pretty good service, at least in theory.
Consumer Side: "will there BE a consumer side if TV's advertising model is destroyed by this change?"
If TV's advertising model is so easily destroyed, was it ever a good model to begin with?
Paul Farhi: Of course it was, given the state of technological development. Look, the story of media has basically been about advances in delivery systems, starting with the Gutenberg press. More efficient delivery methods--cable, satellite, the internet, etc.--have led to profound changes in the state of the industry. Of all these, I think, the internet may be the most profound...
DVR made me feel young again!: I'm not that old, but I'm an early bird now, so I hadn't seen SNL for a looooooong time. Now I DVR it and am so glad I can watch it again. I actually feel like less of a 40-something now that I'm watching SNL again.
Paul Farhi: I watched "SNL" on Hulu the other day. It was "disaggregated"--chopped up into the sections I wanted to view (first "Weekend Update," then the digital short, then the opening monologue, etc.). I really enjoyed being my own program editor!
Comcast/NFL: Yeah, OK. But Comcast does not provide NFL Network alone, it packages it with a lot of other sports that I, for one, am not interested in. Let alone sells its packages for rip-off prices. I'd pay to see the NFL Network but I don't want the rest. And I already pay enough. As far as I'm concerned it should be on basic cable.
Paul Farhi: Oy. Remind me never to take sides when the rich are fighting the wealthy.
Springfield, Va.: What about shows like Lost and The Office? There are a lot of live chat discussions while they are being shown. Can you watch it online and also participate in the discussion?
Paul Farhi: You can, but not in "real time"--that is, people post comments long after a show has first aired, reply to people who posted hours before, etc. It's a rolling discussion, I guess.
Old Blue in Exile: One of the annoying things about when I lived in California was that most TV shows that were aired lived in the East and Midwest were on 3-hour tape delay on the West Coast. Nowadays, with the Internet, one can get the results of DWTS or AI even before they've aired in the Pacific time zone.
Paul Farhi: But I don't want "results." I want the game/the even/the race and THEN the results. The internet doesn't really help me; it actually hurts my viewing experience.
Falls Church, Va.: I will watch TV shows online, but only as a last resort if my DVR failed for some reason. I didn't buy an HD TV and 7.1 surround system just to watch less-than-SD quality video with stereo audio. It's interesting that almost nobody seems to care about the difference in quality between the broadcast version and the online version of a show. Maybe networks can create a tiered pricing model based on that.
Paul Farhi: I'm willing to sacrifice some of that audio/video quality for other benefits--e.g., the value of getting it free online and/or at a time convenient to me.
Washington, D.C.: Paul, I feel you contradicted yourself with the NFL network comment. Earlier you said that cable is much like a socialist system, where we all kick in for channels we don't watch so that others may enjoy them. While I would disagree that this should be the norm, if you truly believe this then you should support the NFL network. The other option for Comcast is to eat the cost because they already overcharge people for their package as it is compared to both FiOS and DTV.
Paul Farhi: I wasn't defending cable's socialist model; I was simply saying it's a fact. It's a fact because it's technologically difficult (maybe impossible, I don't know) for a cable system to sell channels on an a la carte basis. But the fact is, cable networks don't want to be sold a la carte. They benefit from the socialist model.
Alexandria, Va.: Speaking of TV, I was watching Thomas the Tank Engine with my toddler yesterday, and I noticed that he as a white smile, so he must have teeth. Has Thomas ever bitten anyone?
Paul Farhi: Only once, during a very nasty strike called by the unions at Shining Time Station. Oh, it was ugly...
Stupid cable: I don't mind subsidizing channels I don't watch, but I'm really tired of Comcast moving everything to its digital tier. I have a DVR/digital cable box in the living room, but never saw the need to pay extra to have one in the bedroom, where I mostly watch TV before bed and when I'm trying to wake up. As Comcast moves much of what used to be basic cable (by which I mean channels 2 to, say, 70, give or take) to the digital tier, my old TV that's plugged into the coax cable wall jack gets far fewer channels, leaving maybe 5 to 10 that I would ever bother watching. It's not the end of the world, but it's my daily pet peeve. They seem determined to eliminate everything until everyone is forced to rent cable boxes for every TV.
Paul Farhi: Was not aware that Comcast was doing this, outside of a very few stations (such as Maryland Public TV on its Washington-area systems). But if that is the case, yes, that's pretty sneaky...
Washington: I think that TV is just going through an evolutionary process. Yes, technology has given us access to more information at any given time. But, in the case of TV, it has also opened up shows to a new audience that may have been, due to work constraints, unable to view any particular program (i.e. time shifting).
Perhaps the advertising model should include more in-program advertising (like the movie The Truman Show) instead of the typical 30-sec ad.
Paul Farhi: We're getting there. The product placement on "Survivor" and "Amazing Race" has been preposterous for a long time.
Leesburg, Va.: Paul, I've been thinking about this for a while (mostly relating to newspapers and to a lesser extent radio)...
Isn't all of this (the "death of broadcast TV, newspapers, and radio) really just indicative of an advertising-based revenue system that was never really that accurate to begin with? Back in the day, media could say "We have this many viewers/readers/listeners, therefore your ads will get that many views." However, there never really was any way to verify this, Advertisers had to take media at their word.
Well, now with the Internet, we know exactly how many people are clicking what ads, buying what products, etc. The illusion is gone. In effect the old ad-based revenue model was a bubble and that bubble has burst.
Paul Farhi: In a way, yes. But it wasn't really a bubble. Those ratings systems (Nielsen, Arbitron, Audit Bureau of Circulations for newspaper) were/are the best measurement systems possible, flaws and all, given the technology and economic considerations. In other words, we can't blame anyone for not knowing more than we knew at the time. It's like blaming science for not having cured polio or measles 100 years ago.
Expat, Canada: Do you think the recession is hastening TV's predicted demise, in that people, now needing to budget, will be shedding frivolous expenses (i.e. cable) because the content is available for free?
Paul Farhi: Oddly enough, cable subscriptions rose in 2008. People still love their TV!
Towson: I don't think you will see the death of TV as much as the death of advertising. There is a model for how to run a hugely successful TV/news operation without any advertising revenue -- the BBC. Even if you watch streams via the Internet, some entity must still deliver that stream to you. Comcast and the other "providers" will charge a license fee and split the fee amongst the content producers. The only casualties will be the ad agencies and actors who command six figures for a single episode.
Paul Farhi: Oh give me the proverbial break. The BBC? A heavily government subsidized operation is the answer? I don't think so.
Arlington, Va.: Every time I think of the future of television, I can't help but think of the movie Network, which predicted (with frightening accuracy!) the dumbing-down of society from television. And when I think, too, of some of the radical TV show ideas put forth by Faye Dunaway's Diana Christensen, it really illustrates just how much of Network's vision our society has unknowingly fulfilled.
Paul Farhi: "Network" gets a lot of credit for predicting what TV would become. But it shouldn't. It simply satirized what TV already WAS at the time. That's just good observational skills, not foresight.
Paul Farhi: Oddly enough, cable subscriptions rose in 2008. People still love their TV!: Couldn't that be attributed to the analog-digital conversion?
Paul Farhi: Could be. But it's also a natural consequence of something the pointy heads like to call "household formation." We have more households, thanks to a growing population, thus more people getting cable.
NYC: I don't know if I speak for a lot of others or not, but being a poor grad school student, I can't afford $60/month in cable that I wouldn't get to watch that much anyway. For me it's either no TV or TV online, which surprisingly enough was a semi-tough choice a year or so ago (mostly for sports). Since then I've discovered a plethora of online options for watching TV live. The quality's not the best, but for free it'll do!
Paul Farhi: I do think cable companies are worried about people like you, NYC...
Wiredog: Once HuLu and others have all the content I'm interested in (nearly there now) I will implement The Plan:
Buy a Mac Mini. Plug a TV Tuner like the EyeTV into it. Plug it into the TV. Use it like a set top box for HuLu and such, and a DVR for over the air TV. Cancel cable TV subscription.
Paul Farhi: Game. Set. Match. Over.
...cable subscriptions rose in 2008.: Not exactly. The cable operators use something called a "revenue generating unit," or RGU, to mask their video subscriber losses. So if you have cable, Internet, and phone, you're worth 3 RGU's, and that number is climbing as more people take broadband and phone through the cable.
What they don't tell you unless you read DEEP into their SEC filings is that the total numbers of households taking services are falling precipitously.
Paul Farhi: Absolutely! Apologies for the imprecise answer. Cable company *revenues* rose last year, but that includes all the sources you mentioned. The cable folks would acknowledged that the video-delivery part of their business is the most troubled.
Australia and USA: Hi Paul
I was recently in the USA for the inauguration and to launch my second book on leadership called Sex in the Boardroom. Whilst in the states I was the official 'on the ground reporter' for an Australian radio station and relayed information about what was happening in D.C. regarding how people felt about the first black president. The place was alive and it was very much a party atmosphere, even on the bus going home after the inauguration. It was just amazing to be able to hear the radio stations from Aussie land and to be able to have a very clear, audible interview in D.C. whilst going live to Aus. It's one thing to be able to see it on teli but yet another to actually be doing it yourself. Bring on this technology; I love it.
Paul Farhi: "Sex in the Boardroom"--and it's about leadership? They do things a little differently Down Under, no?
IN the moment: Is it better that I saw the SNL Motherlover video as it was first broadcast on TV Saturday evening, or that I watched it on my computer Monday? Does it matter? And what about actual events? I remember (as a young child) the family gathered round the TV watching the events of the Kennedy assassination weekend unfold. Has that era ended, when the nation gathered round the television set to absorb a major event at the same time? Huddling round the PC doesn't seem quite the same.
Paul Farhi: We seem to be able to coalesce around big stories still--elections, 9/11, swine flu, whatever--so I'm not sure this "national hearth" thing is really in jeopardy. What we don't share as much, I guess, is our entertainment choices. But somehow I think we'll be okay there...
The Airless Cubicle: Yes. TV is on the verge of destruction as a unique broadcasting medium. It, like radio and the print media, has been transformed by the Internet into one of many forms of Internet content. This is good in many ways. For example, at home, we watch shows from Hulu.com and PBS Video when we have the time and energy to watch them, and we watch more of the programs we like. However, we don't see as many commercials (and no pledge breaks in the case of PBS) and we're rarely tempted to watch television on impulse based on cross-promotion from other shows).
Television entertainment will not vanish, but the era of the Great Production will pass. In many ways, television will resemble the book market that exists today. Everyone can write a book if they have the desire -- I have! -- but there will be bestsellers and there will be books on the remainder list. So will it be with TV. There will be more shows, but fewer people producing them. The Onion once satirized the cast of a canceled TV show as performing new episodes on the street. Reality has a way of catching up with satire. Good actors will be able to put out their own material.
A side effect will be the breaking of the 30-minute and 60-minute model. There's no law that a half-hour show must be 22 minutes long without commercials. It might get the message through in 17 minutes, whereas the next show could be 25:30 to make its point. Like movies, there will be minimum and maximum expected lengths, but there will also be a market for "uncut" and "summary" versions of each TV show.
Who will pay for this? I have no desire to pay an additional phone/cable bill for seeing video-on-demand, but I realize the justice of paying for intellectual content that is not in the public domain. Here's the issue that might delay the fragmentation of TV. On Hulu, I watch mini-commercials. PBS could put a pledge spot on each show. I'm willing even to micro-pay for a specific show I like a lot. I simply don't want to be soaked to maintain an existing distribution system with redundancies, inefficiencies, and corruption. I pity the people who bought television and radio stations in the last decade. Commercial broadcasting is the General Motors and Chrysler of communication. The new model will be flexible and faster and destroy TV as we know it. It's already destroyed radio.
Paul Farhi: Very thoughtful, as always, Airless! I'll let your's be the last word (except for my last words, of course...)
Paul Farhi: Great discussion, folks! Let's get together again next week and do it again. With any luck, some publisher will agree to compile these learned deliberations into a book, which will go on to become a best seller and then go on to become a big budget movie, with spinoffs. We can dream (and I'm keeping all the royalties, by the way). Anyway, thanks for coming by this week. And as always...Regards to all....Paul.
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