The End of Television As We Know It

Chromecast_dongleWhen I first saw Apple TV, I wondered what it was, and whether it was worth $100. By the time I saw Google’s Chromecast, I thought I understood what it was, and why it was worth $35. Neither device looks like much. Apple TV looks like a square hockey puck. Chrome cast looks like a thumb drive. Looks can be deceiving.

These devices expand the capabilities of a TV set by connecting it to the internet. If you want to watch Netflix on a TV set, you can connect Apple TV, receive Netflix on your iPhone or iPad, then throw the signal over to the TV screen. Many devices now contain apps that allow you to watch specific TV brands (I hesitate to call Netflix a “channel” in the old school linear sense). At first, this seemed to be a clever stunt. In time, with the arrival of “House of Cards,” it became clear that Netflix, and these unassuming devices, were a pure form of disruptive innovation—taking place on the very same screen that NBC, CBS, etc. had owned for decades.

When Verizon FiOS pixelates the cable version of HBO GO so horribly that it cannot be watched—a very common occurrence—I must choose between “Last Week Tonight with John Stewart” on YouTube, the HBO GO app on my Samsung TV, the same app on my  iPhone, my iPad, and DVD player. Apart from “NCIS”—which we watch live Tuesday nights at 8PM because my wife enjoys texting with a friend as they watch the live broadcast—we mostly disregard the TV schedule. Mostly, we watch via DVR or VOD. The TV set is becoming a remnant of past behavior. Heck, we’ve been “time-delaying” TV programs and movies since the early 1980s.

The almighty TV set was the king of center of home entertainment, and information. For news, weather, entertainment, a movie, or a sitcom, the TV set was the go-to. That’s no longer true—which changes everything. Last week, the east coast of the U.S. was covered in snow—on the busiest travel day of the year. In the past, I would have learned everything I wanted to know by watching the detailed forecast on The Weather Channel. The night before the big storm, The WeFat Guysather Channel wasn’t at all concerned with weather forecasting. Instead, TWC was running an episode of “Fat Guys in the Woods” (in case there was any doubt that TV is in its pitiful final stages…). Nowadays, when I want a weather forecast, I no longer consult the TV; I find extremely local, extremely detailed, extremely up to date weather information on the internet.

Like most people, I prefer to watch TV programs on the largest available screen. We used to own six TV sets. Now, we own just two, and we could probably do with just one.

What I need is either a cable box and its built-in DVR, and a fast internet connection.

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The cable box is the source of hundreds of channels—local broadcasts, speciality channels (TCM, AMC, GSN, TLC, whatever)—an extremely crowded timetable that shows which program is airing which channel at which time.

Or, I can search for the programs that I want to watch, whenever I want to watch them, and just click a button. This is the on-demand approach used by Nmarquee-promo-apps-deviceetflix, HBO GO, Showtime Anytime, YouTube, and a hundred other 21st century channels.

While their interfaces are not the best, the newer approach makes more sense than the 20th century EPG (electronic program guide) that has become so bloated, and so ineffective, that it reminds everyone why TV Guide no longer arrives in zillions of U.S. households every week.

(The TV tuner, which receives local broadcasts, offers far less than cable or the internet, but, it’s free. For the most part, that TV tuner is ignored by 80% of Americans. More on that below.)

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Consider the broadcaster, the network, the local TV channel. The scheduling viewing part of business is rapidly fading. The idea of watching scheduled television is becoming old-fashioned. Ratings now include post-scheduled viewing, and will eventually be dominated by it. Today, more than half of TV viewing occurs off-schedule. The large broadcast networks are desperate for appointment viewing, but there aren’t enough mega-events to keep the viewers on a regular schedule. Sure, The Super Bowl, and lots of sporting events are best enjoyed live, and there’s the occasional awards show, or special event (like NBC’s updated live theater-on-TV version of “Peter Pan”), but that’s not enough reason to keep television schedules intact as an industry standard, not by a long shot.

Consider this: Netflix has more U.S. subscribers (37 million) than Comcast (30 million). Netflix costs less than $10 per month, or just over $100 per year. Comcast costs ten times that amount (but includes a internet connection needed to watch Netflix on television). At the same time, prime time viewership continues to drift downward—for broadcasters, the audience is 1/3 the size that it was in the mid-1980s. Of course, Netflix is not a television channel, not in the 20th century sense.

MtvstationidAlthough many business leaders proceed with a comfortable pair of blinders that protect their minds from digital interference, every 21st century broadcaster, network, local TV channel must assume that the business of scheduled television is not a long-term proposition, and must also also assume that their job is to promote viewership of individual programs anytime anywhere via any device that the viewer wants to use. Apart from QVC, almost none of the original 24/7 cable experiences remains intact (MTV no longer shows music videos 24/7, CNN no longer shows news 24/7, The Weather Channel no longer shows weather 24/7, etc.) Still, the old TV channel brands face a bright future—on many platforms, not as TV channels.

We’re no longer watching “broadcasts” in the old sense (an antenna feeds lots of people within a Federally-designated geographic area, or one set up by a local municipality for cable service). Instead, we’re watching video files that are accessed, one by one, from servers all over the world.

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Final piece of the puzzle: As citizens, what do we need from our television and internet systems? Local TV stations, and their related licenses, and broadcast networks are no longer as useful as they once were. There are better technologies available today than there were in 1949 (when the current TV system took shape), and in 1980 (when cable TV got started in a big way).

Family_watching_television_1958The broadcast spectrum is free, but we allowed, and encouraged, the likes of Comcast, to replace the use of free TV spectrum with a service that now costs more than a thousand dollars per year. Quite reasonably, the U.S. government figures, why reserve the spectrum for television broadcasters if so few people are watching those broadcasts over-the-air. In fact, why not sell off the spectrum for other purposes? That’s starting in 2016—probably about 10-15% of the TV spectrum will be sold by local TV stations to the government, which will flip the spectrum and resell it for wireless internet use.

What about the other 20% of us? About half of that remaining 20% subscribes DISH or DIRECTV satellite services—comparable to cable TV system. The remaining 10% includes  many seniors, those under the poverty line, and some clever hipsters who do what their parents never could (live without TV). If we are going to TV away from those in need, we should provide a FREE alternative (that should include the internet).

The change is upon us. Its impact is evident at home, on the road, in government and corporate offices, in TV stations with large amounts of empty office and studio space. It’s been a long time coming, but the future is here.

 

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Welcome to Silicon Alley (Hollywood 3.0)


Aerial_Hollywood_SignThe next big thing has already begun… on Silicon Beach. If the term is unfamiliar, think in terms of a third generation’s reinvention of Hollywood (with a far larger SoCal geographic area)–first came movies, then TV, now Internet. This fast-growing community makes use of the (hungry) local creative community, welcomes investment from 20th century moguls, and offers instruction and consulting to old school Hollywood studios.

Read all about in this article, published in Variety just before Thanksgiving.

Smaller than I thought

Just out of curiosity, I decided to explore the list of top U.S. newspapers by circulation.

Some things that I found interesting:

1. The top newspaper in the USA is not a general interest paper. It’s the Wall Street Journal, with a circulation of about 2 million.

2. The second largest paper is USA Today, and the third is The New York Times.

3. The daily circulation of The New York Times roughly equals the population of Rhode Island–just about 1 million people. On Sundays, the Times circulation equals the number of people in Idaho (1.3 million). And the NY Times is the biggest local paper in the USA.

4. Other big papers in the USA include The Washington Post, The Daily News (NYC), Chicago Tribune, and Chicago Sun-Times. Each is around the half million mark–roughly, the population of  our least-populous state, Wyoming.

Before this end-of-journalism web madness began, daily New York Times circulation was about 1.1 million in 1998. Not much of a change from today’s 1 million. In 1990–years before the internet’s introduction–The Daily News peaked around 2.3 million per day, but by 1990, circulation was down to 1.2 million, and now, it’s about half that amount. Based upon various conflicting, but helpful, sources, I believe newspaper circulation is down by around 1/3 since 1990–but that’s two decades ago, certainly plenty of time to reinvent an industry. In Chicago, that means 1 in 9 households gets a paper (either Sun-Times or Trib) every weekday. I’m curious whether that number was, say, 1 in 5 around 1960, or maybe even 1 in 3 around 1940. I’ll do some research on those details, and get back to you.

Regardless of the specific numbers, the trends are no secret. It’s clear that the music and newspaper industries made their technology decisions late in the game, limiting their options, struggling with their status quo for too long, allowing competitors to dominate. And, it’s pretty clear that the internet is a better way to deliver news than, say, newsboys standing on street corners. I wonder whether we still need print editions. And I wonder just how much energy, and paper, we spend printing, trucking and recycling millions of newspapers every day of the week. And on Sundays.

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