|The future of Television in a streaming world
Jim Laurel, June 2000
They say that death and taxes are the only sure things in life. But as our dependence on the global network for everything from business to entertainment increases, we should probably amend that list to include bandwidth. Telecommunications providers, cable operators, and wireless services are all rushing to fill the rapidly growing demand for high speed Internet access. It seems almost a certainty that broadband Internet access will be available to almost anyone who wants it in the next 5 years.
Oddly enough, television industry doesnt seem to believe what is happening all around them. Only a handful of the 79 television stations in the top 11 US markets actually made the FCCs November 1 deadline for beginning digital broadcasts, and the others have sought extensions.
Infrastructure isnt the only challenge to digital television. For starters, exactly what content will be aired over this new digital infrastructure? Is it interactive TV? Traditional TV combined with new services? Web pages enhanced with video? Or is it just better pictures and sound? There is a growing consensus that it is generally a good idea to combine the Internet and television, but which is it? Is it more interesting to enhance television with the Internet, or will television merely become components in web pages?
The march toward digital television is mired in standards battles, contention between the on-air and on-line groups at major broadcasters, and an unwillingness to take risks and try new business models. While the interactive and on-air groups at the major broadcast and cable networks argue among themselves, and international standards bodies battle for dominance, consumers are discovering another kind of digital television Internet streaming media.
Think about the inherent benefits of streaming media vs todays television. The FCC does not regulate streaming media, de-facto global standards are already in place, and there is a growing body of content. The major networks are no longer the gatekeepers of distribution. And anyone who can get their content to an Internet hosting service has global distribution from day 1, without the complex international distribution agreements currently required in television.
New technology is also lowering the barriers to production. Todays digital video technology and inexpensive PC-based video production solutions make it possible to assemble a workable web video production system for around $3,000.
While the industry tries to figure out what digital television should be, the Internet marches ahead with characteristic exuberance and vigor. The only thing that stands in the way of streaming media becoming the next television is bandwidth.
So what will the television world look like in the streaming media future?
- Internet portals become the new "networks". Time Warner and AOL believe in this one. After all, networks have always been in the business of programming organizing content that, with some exceptions, is mostly produced by third parties.
- The major networks will become Internet portals, or be acquired by existing portals. Those that fail to make this transition will fail.
- Cable companies will become mega ISPs. Their primary business will be offering high-speed connectivity and while they may still offer content, customers will have a choice of purchasing content packages from any of the Internet portals. Customers wont be limited, as they are today, to just those content choices offered by their cable MSO. The cable company just provides a pipe. You get your content any place you choose.
- New technology and virtually nonexistent barriers to entry will fuel a democratization of television and entertainment. Thousands of specialty web-based broadcasters will emerge to serve niche markets.
The entertainment industry believes that the general public will never be able to create compelling content, no matter what tools they have. That same mentality fostered the belief that the public would never want personal computers and that non-engineers couldnt create great software. Then the PC hit, and all of a sudden there was an explosion of new software in the market and the percentage of household with computers grows all the time.
Similarly, music companies dont believe that independent bands releasing albums on the web threaten their existence. But it is happening, and its sheer hubris on the part of the music industry to say they only they have the skills to identify and develop talent.
Im excited by the explosion of creativity that will result when technology makes it possible for anyone to realize their vision and share it with the world. The transition to streaming media as the next TV platform means choice and lower cost for consumers. Content producers will no longer face the oligopoly of networks, broadcasters and cable providers for distribution. And while the prospects may seem bleak for the old-economy television industry, Im convinced that there are tremendous opportunities for them if theyre willing to take risks and explore.