Misconceptions about the Future of Television

I have spoken often about a future in which television as we know it today no longer exists – where producers of television content, be they sports leagues or major studios, cut out the middleman and release their content directly to the people via the Internet. But on Wednesday I mentioned that such a future is at least a decade away, and to the reasons I gave in that post I would probably add the struggles people have had making money off video ads on the Internet. People don’t tolerate ads on the Internet in the same numbers they do on TV, though my anecdotal evidence suggests the tide may be turning on that front, and those ads don’t make nearly as much money as TV ads despite the lack of competition.

As such, it’s hard to imagine such a future at all, and it’s tempting to define it in terms of the structures that exist today. When I see much of the “old media”‘s streaming efforts consisting of Internet versions of their normal linear channels, when I see networks control streaming rights instead of studios, when I see access to shows continuing to be restricted by country, when I see that access to NBC’s Olympics streaming is controlled by your cable provider (regardless of ISP), I just shake my head. Such things are necessary in the present as we go through the awkward transition to the future, but I hope they don’t give anyone the wrong idea of what the future is going to be like.

For example, because the Internet video ad market isn’t mature and because of the nature of streaming of cable channels right now, it’s tempting to think the future won’t be much different from the ecosystem of channels that exist now, only with those channels that don’t offer live programming decoupling their lineup from a schedule. Most of the bigger-budget shows will be associated with some sort of “network” that charges substantial fees to Internet service providers to allow them to access their content, even if it’s just a brand name for content produced by a studio. It’s technically getting rid of the middleman, but in a way that mirrors the current TV landscape and, more importantly, preserves the revenues the biggest-budget productions require.

It’s also wrong. I don’t believe we’ll need to set up “barriers to entry” to pay for most of our TV shows, in part because I don’t believe it’s possible; “barriers to entry” is another word for “a reason to pirate”. Piracy is only going to get easier; I have on my computer RealPlayer SP, which pops up a button whenever I’m watching a video on the Internet to download the video to my computer. Not all videos can be downloaded, but there are videos with ads that can – and when I watch the version that RealPlayer downloaded, there are no ads. If a respected, legitimate video player is making piracy that easy, the fight against it might be futile.

We have shows that are paid for entirely through ads. They’re called broadcast television, and while it may be a wasteland now, that’s only because of the increased competition from cable; before cable came along, broadcast television had no shortage of groundbreaking shows. All in the Family, M*A*S*H, and the early seasons of The Simpsons (back when it was still good) all aired on broadcast; so did Star Trek, Hill Street Blues, and Twin Peaks. Even today there are independent producers making money by making high-quality videos on the Internet off ads alone (though probably the majority of the ones I know of use footage from older, more popular shows or otherwise relate to other things rather than be wholly original creations themselves). Today’s television landscape┬áprivileges┬áthose who take advantage of the “dual revenue streams” of advertising and subscriber fees; the Internet turns that on its head. It’s too democratic for every video producer to charge subscriber fees and succeed. I don’t believe pay-per-view or the equivalent of premium channels will go away entirely (Netflix seems to be becoming the HBO of Internet “premium channels”), but neither do I think the biggest budgets will become the sole province of movies either.

That said, I don’t want to discount that model entirely, but I would rather see it in a more decentralized form, where anyone can and does make money off of what they put on the Internet. Whenever you access a page, your ISP automatically pays the producer of whatever content you’re accessing, and passes the costs on to you. Had this model been in place from the beginning of the Internet we wouldn’t have spent the better part of two decades trying to figure out how to make money off the Internet and struggling through such gimmicks as micropayments. I’m not sure if it’s realistic now, and it could give ISPs a real incentive to attempt to repeal network neutrality laws so they can block sites they don’t like.

But I do think that one of these days, your bill for the Internet alone will start to rival what you pay now for cable and Internet combined, and producers will want to tap some of that. That may take the form of charging you directly for content, it may take the form of charging ISPs, or it may take the form of some variant of the automated-payment system I just laid out. Or it could be a combination of all of the above. But it’s not going to turn the Internet into the same cable TV model we have today.

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