The future of Television

I was reading a two part article on the future of television and have found myself quite interested in the dynamics of what it might become.

Hyperdistribution and swarming are key events that are currently taking place and could become the central cause of the downfall of the broadcaster.

The basic model of television program distribution begins with the producer who pitches an idea to a broadcaster. If the broadcaster likes the idea, they in turn present it to an advertiser, which can dictate the future of an idea — if the advertiser rejects an idea, the broadcaster may also decide to scrap the idea.

Once an idea is accepted by the advertiser and the broadcaster, production begins. The advertiser pays the broadcaster money to hawk it’s wares in commercials interspersed in the program, and the broadcaster turns around and pays the producer for the idea. It is at this stage that the audience figures into the equation: the audience gets to view the program [for free].

Unforunately (or fortunately depending on how you want to see things), P2P programs like Bittorrent are circumventing the broadcaster (and the advertiser) and are tying the producer directly with the viewer. (Hyperdistribution and swarming)

There is also the DVR phenomena, which is rapidly lowering the monetary worth of a TV commercial — viewers can now skip through commercials quickly and efficiently. This is a definite problem with DVRs and broadcaster and advertisers know it.

And so there are two vastly distinct problems that broadcasters are facing right now: file sharing online and DVRs that are effectively removing commercials from TV programming.

Mr. Pesce, author of the article linked above, mentions one method that could ultimately save the broadcasters and the advertisers, but would require radical changes in the way these two groups currently handle their business models. (He does note that for sporting events and other live events, conventional broadcasting models will continue to work for the time being.)

Direct imprinting of an advertisers logo in a corner of the screen, or perhaps a short little animation that runs on the sides, that”s not so noticeable that it detracts from the actual program. This should be akin to the TV station id logos that many programs already carry right now — small enough that most people don’t really notice, but present enough for people to know that it”s there. These downloaded episodes (or DVDs) have a much longer shelf-life and could potentially provide a much more targetted and focused platform.

Now that takes care of the advertiser.

Broadcasters will need to change their business models and assume the role of agent. That means they will match producers with potential advertisers. Broadcasters are unique in that they have strong connections to both groups and can probably provide the best matches from the two groups. In the end though, broadcasters will need to understand that their role in the entire process will slowly phase-out to the point where they may not longer be needed, at least in the traditional form.

Hyperdistribution is nice and all, but what of those that don”t have broadband connections? This is where Mr. Pesce suggests what AOL did back in the early to mid-90”s with their CD mailings. The cost to manufacture a DVD and send them out en masse probably wouldn”t cost quite as much as it might seem. Viewers will also have the ability to watch these discs whenever they want to, which means that the chances of them getting viewed are much higher. Content that can be started and stopped at any point in time will become increasingly more important as viewers squeeze more and more things into their available time.

Mr. Pesce is suggesting that the TV industry embrace piracy and try to take advantage of what the medium can provide. Hyperdistribution will most likely become a mainstay in the years to come.