Doug Herzog, president of Comedy Central and Spike TV, didn't have his epiphany about the future of television at work. He experienced it on a recent vacation.
Herzog knows the explosive growth of DVR (digital video recorder) technology, which allows viewers to record dozens of shows for later viewing, means that the era of "sitting down at 8 p.m. on a Thursday to watch a particular show because some network tells you to is over."
But getting a firsthand glimpse into the true potential of the tube -- watching what you want, anytime, anywhere, via any number of electronic devices -- was a revelatory experience.
Before he left on a recent trip, Herzog, an avid Yankees fan, signed up with Major League Baseball's MLB.TV, which enables subscribers to watch certain baseball games from anywhere, via broadband computer connections.
Down in Costa Rica, as his family relaxed at a remote resort, Herzog watched American baseball to his heart's content.
"That changed the game for me," Herzog says. "Now I get it."
And Herzog hasn't even seen what subscribers to SkyTV in Britain can do: They can change the camera angles on the soccer games they're watching, and place a bet while they're at it. And they can dump the game's official announcers in favor of commentary from rabid fans.
And though Herzog's sons were watching a "Spider-Man" flick on their portable gaming device on the plane to Costa Rica, a couple of years from now, they might be watching "Chappelle's Show" or "South Park" on their phones.
More than one media pundit has opined that TV is going to change more in the next five years than it has in the last 50. But how does this affect you?
Here, we take at look how television will look in the future: how DVRs and video-on-demand will allow you to access your favorite shows when you want them, how cutting-edge technology will allow you to take TV with you wherever you go, how the Internet may one day become television's secondary (or primary) home, and how advertising will change in this brave, new TV world.
1. Running your own network -- wherever you are.
"Timeshifting" was the hip term among media executives for the past couple of years. It referred to consumers' ability to watch TV and consume other media at their own pace, thanks to DVRs, which let viewers pause live TV, fast forward through commercials and record dozens of shows for later viewing. The rise of DVR technology, which is now available to many cable subscribers, means TV watchers can tune into the nightly news at 1 a.m. or turn on a cooking show at the dinner hour, not when it aired in midafternoon.
There's no doubt that the aggressive rollout of DVR technology by cable firms -- DVRs are also available as stand-alone devices and through satellite TV providers -- has helped ignite the timeshifting revolution. DVRs will be in 25 million homes by 2007, according to the research firm the Yankee Group; Forrester Research estimates that 41 percent of homes will have DVRs by 2010.
But timeshifting is making way for a new buzz term, "placeshifting." Media execs realize that TV audiences don't necessarily want to be parked in front of the TV on their couches. If you can e-mail your friends from an airplane and watch movies while hurtling down the highway in your car, why shouldn't you be able to watch "Law & Order" on your computer, your hand-held gaming device or your phone?
A few months ago, DVR pioneer TiVo made TiVo-to-Go available on the firm's Web site. TiVo-to-Go is a computer program that allows subscribers to download TV shows they've recorded on certain TiVo devices to their computers.
"The response has been phenomenal," TiVo CEO Mike Ramsay says. "Clearly mobility is really important. What we're looking at is a lifestyle. It's about consuming media on the go."
Media companies are working on ways to get TV into your cars -- and not via discs that you pop into a mobile DVD player. Satellite radio firms, for example, are exploring ways to get TV programming into the cars of their 5 million customers. And next fall, consumers will be able to get satellite TV from DirecTV as an option on the Cadillac Escalade. A recent report by the consulting firm Frost and Sullivan predicted by 2011, 3 million cars will have satellite TV -- and 36 million cars will have some kind of video capability.
At least five major cellular services provide some sort of television content on their phones, according to Jimmy Schaeffler, chairman and senior research analyst at the Carmel Group, an independent media research firm.
And these days, what they're offering is more than just "mobisodes," or specially created mini-episodes, of shows such as "24" and "The Simple Life." In April, Sprint began offering real-time feeds of the Fox News Channel to its subscribers as part of its multimedia Sprint TV service, and Verizon's new V Cast service, which costs $15 extra per month, enables cell phone users to watch music videos, "Daily Show" excerpts and "Sesame Street" clips, play games and also get news feeds.
These kinds of TV add-ons are the wave of the future, according to Schaeffler. "With cell phones, the question is how receptive users will be to longer-form video," Schaeffler says. "I don't think there's any question that they'll watch clips."
For media companies in hot pursuit of the young male demographic, which has, amid much hue and cry, partly deserted TV for gaming and Internet surfing, getting TV on mobile gaming devices is a must. But do-it-yourself types may have once again beaten the Old Media companies to the punch on that front: Days after the launch of Sony's PSP hand-held gaming device, Web users posted instructions on how to hack the device so that its snazzy, 2-by-4 inch plasma screen could be used to play TV shows.
The engine of the mobile-TV trend is the growing availability of high-speed, broadband Internet access on phones, game devices and laptops.
"Mobile broadband is a killer application," Schaeffler says. "Clearly that's the trend across every [consumer] device. It gives you so much more in terms of content-delivering capability."
Though they're intrigued by the idea of exporting TV to new platforms, media executives don't want to share the fate of music-industry types, who were beaten by Napster and its file-sharing brethren. BitTorrent, a file-sharing program that enables viewers to swap TV shows and movies illegally -- and which eats up one-third of the Internet's bandwidth on any given day, according to some estimates -- is already an entrenched tool among the young and tech-savvy.
But so far, your Aunt Mildred doesn't know what BitTorrent is or how to use it. Before she figures it out, TV execs should have a few new ways to get her the TV shows she wants, when she wants them.
2. Living in an on-demand world.
The problem with DVRs is that you generally need to tell them in advance what you want them to record. What if, around the fabled water cooler, you heard how great last week's episode of "Deadwood" was -- but you hadn't recorded it? Wouldn't it be great if it were available at the push of a button?
It is. Premium cable subscribers with access to HBO on Demand can call up the network's western anytime.
Some TV types see video-on-demand (VOD), which is available to a growing number of the cable industry's 74 million subscribers, as the salvation of the industry. David Poltrack, the executive vice president of research and planning for CBS, believes so much in VOD that he calls DVRs "transitional technology."
Cable giant Comcast has bet big on VOD, and predicts that this year, its customers will order up a billion video-on-demand (VOD) programs. Even though most on-demand programming is free right now, cable and TV executives are betting that advertising tied to VOD programming will help pay the bills.
"The average [Comcast] user of VOD views 27 shows and [that] equates to 12 hours a month of on-demand viewing," Page H. Thomson, vice president and general manager of Comcast on Demand, told Advertising Age in April.
"The real hope for us all is VOD -- it's what I call the virtual DVR," says Poltrack. VOD is a "virtual" because consumers don't need an "actual" place to store VOD programming -- they can access it at will. And they don't have to use up the space on the hard drives of their DVRs to save what they want to watch -- the huge VOD servers of cable companies have the capacity to hold every TV program ever made.
CBS has a dedicated research facility in Las Vegas, where Poltrack and his staff have been measuring consumers' increasingly positive attitude toward VOD.
"It's one of the frustrations of this business right now -- cable companies and satellite companies are rushing to provide people with DVRs, and that's sort of undermining the VOD market, which is really the better solution for all of them," Poltrack says.
It's a better solution, Poltrack says, because it's a potential gold mine. Poltrack envisions a scenario in which, just after an episode of "CSI" finishes airing at 10 p.m., it's instantly available on VOD -- where it would cost perhaps $1 for a commercial-free version, or 50 cents for a version with commercials.
Then, after that VOD "window" closes, the network would take "CSI" off the market until the DVD boxed set for that season of "CSI" came out months later.
The explosive growth of the TV-on-DVD boxed set market, which has been a cash cow for media firms, and the growing popularity of the on-demand content that's available now, has convinced many media executives that asking consumers to pay for TV is not such a crazy idea. Advertisers like the idea too: Who's to say General Motors or Home Depot or Keebler couldn't create their own VOD shows -- which consumers could access for free?
"My missionary zeal right now is for VOD," Poltrack says. "If we offer this to the public in a reasonable way, give them what they want right now," the future of TV could be rosy. "If we don't, we'll be fighting the video version of Napster."
But Poltrack realizes that "what the public wants on VOD is current hit shows" such as "Desperate Housewives, "CSI," "Lost," etc., which aren't available on VOD.
But once VOD is truly an all-you-can-watch buffet, Schaeffler sees VOD and DVR co-existing nicely -- and between them, making more money for content providers.
"They serve different needs, and both will help grow the pie," he says.
3. Getting what you want online.
Showtime made "Fat Actress" available for online streaming the day the Kirstie Alley vehicle premiered, and the series premiere of "Battlestar Galactica" has been streamed by online surfers more than 150,000 times since it was posted online by Sci Fi in February.
"Almost as many people watched `Fat Actress' on our [cable] network as streamed it," says Bob Greenblatt, president of entertainment at Showtime. "A huge amount of people sampled the show, more than we could have gotten through just advertising."
So why isn't more TV available online? Despite having dipped their toes in the water, media companies are wary of illegal file sharing. They know it's already happening, but they fear they'll add fuel to the fire if they make downloads of popular TV shows more widely available without stringent copyright-management programs in place.
And TV execs have reason to be nervous: One how-to-download site lists the most popular illegally shared programs, which include successful -- and highly profitable -- programs such as "24," "The Sopranos," "The West Wing" and "The Shield."
"The studios are leery of rolling out movie downloading on a big basis," says Lynne Bartos, senior vice president of the research firm Ipsos-Insight, which polls consumers on their attitude toward media, the Internet and technology. "They're controlling that and testing waters with movies. Everyone is afraid that the floodgates are going to open -- they're really taking tiny steps."
The most daring embrace of new TV-downloading technology comes courtesy of the venerable British Broadcasting Corp., which this spring plans to allow a limited number of BBC viewers to use cutting-edge peer-to-peer technology to download selected programs from its archives.
"It's obviously something that people want," Ben Lavender, the head of the BBC's Internet Media Player project told CNET News. "Rather than being like King Canute and hoping the water won't come in over our feet, it's better to get out in front."
It's clear that some day in the near future, once the copyright issues have been settled, television is going to be available legally online -- which is why phone companies and cable firms are in a bare-knuckled competition over who will provide online services for your home.
A who's who of big media and communications companies, such as Microsoft, Sony, Comcast, SBC and Verizon, are engaged in a battle over, essentially, this question: What consumer device or Internet service are you going to access a whole season's worth of "Felicity" episodes, and where are you going to watch them?
4. Getting cozy with your "home media ecosystem."
Sure, it's possible to watch episodes of "Jack & Bobby," "Everwood" and "Veronica Mars" on your computer -- and all three were made available by online giant AOL in the past year -- but, despite the breakthroughs in resolution and overall snazziness of PC screens, most of us would rather watch TV on the biggest box we can find -- and that's still the TV.
All DVRs contain computer hard drives just like the hard drive on your computer; right now, the Big Idea in the media industry is getting that computer -- and all the other computers in your home -- to share information more freely. It sounds good on paper, doesn't it?
Just last week, the Wall Street Journal called the battle among phone companies, computer firms, satellite and cable providers to get in on the ground floor of the emerging "home media ecosystem" "the key battleground in what promises to be one of the most bruising -- and important -- global corporate fights in the next couple of years."
Let's hope that fight doesn't end in a draw for consumers. But most media types admit an easy-to-navigate computer-TV connection will take a lot of work. Ramsay, in fact, is positioning TiVo to be the warm, fuzzy, easy-to-use counterpart to the often-maddening PC.
A big part of the strategic thinking at TiVo, he says, is about making media easier to deal with. "That's important. A lot of computer companies want to get into the living room and offer all these features. But in the TV world, the simpler the better. Too many features" -- and PC powerhouses such as Microsoft have been accused of loading up their software with far too many bells and whistles -- "and people just say, `I'm just going to buy a DVD player.'"
PCs, he adds, are "noisy, they generate heat and they break a lot. I think there's a long way to go" in integrating them into the home theater system, and "hopefully TiVo is the device that will directly connect to your TV and has user interfaces for everything."
But TiVo has a lot of competition there -- everybody who's anybody in the media universe wants to provide the one device that will knit your media suite into a seamless whole. Industry giants such as Sony and Microsoft increasingly see their futures as providers of the technology, the software and the devices that will enable consumers to control and access their TV, music and movies. Smaller fry such as Sling Media and Akimbo have introduced devices and technology that allow consumers to take their TV on the road or send programs from the PC to the TV.
A breakthrough device -- the TV equivalent of the iPod -- hasn't emerged yet. But just as iPod owners and cell phone users can't imagine life without these gadgets, someday, someone will invent a device that makes the home-media system sing.
5. Ads will start working for you.
A few months ago, according to Advertising Age, Bob Jeffrey, the CEO of J. Walter Thompson, "predicted that companies that today spend 70 percent to 80 percent of their advertising dollars on network TV will allocate just half that much five years from now."
The panic among advertisers and the broadcasters, as it sinks in that millions of folks are using DVRs to ignore the $60 billion worth of ads on TV, is palpable. "There's still time to head off Armageddon," counseled one typically cheery article in a recent issue of the trade magazine Broadcasting & Cable.
But not all the news is bleak. CBS' research, Poltrack says, shows that people who use their DVRs to fast-forward through ads are still able to recall some of the ads they sped through.
"In the process of fast-forwarding, they were committing their attention to the screen, and they do see the commercials go by," he says.
Viewers are already seeing a wave of ads that address the DVR fast-forwarding crowd: There are more ads now that feature large logos that stay on the screen for several seconds. And there are ads that are so bizarre and disjunctive ("Monkeys? In an office? What?") that even the most committed of fast-forwarders have to go back and take a second look.
But for the most part, advertisers realize they have to change their game. The days of blanketing the three biggest networks with a blizzard of ads and thereby reaching the majority of sentient adults are over.
And, oddly enough, the DVR may end up being the advertiser's friend.
"The advertising industry is increasingly interested" in using DVR technology to better reach consumers, Ramsay says. "They're looking to the DVR to take advertising to the next level. [With DVRs,] you get much more flexibility in the kind of promotions you can do -- you can send specific promotions to specific areas, it's targetable, it's also measurable. You can tell the advertiser how many people" clicked through an on-screen button to get more information about a product.
Bartos says the new ad technology that will arrive in the next couple of years will be a boon to both advertisers and consumers. Consumers might be able to watch a cooking show sponsored by Kraft and have a chance to click certain buttons to get coupons or recipes. Interested in that Ford truck? Hit a button and watch a short film about it. Even if you're fast-forwarding through an ad, you'll still be able to click the button advertising extra stuff.
Getting consumers to opt in voluntarily is the key, ad execs say; the future of TV advertising is in providing a gateway to more comprehensive information.
"It's about getting people's attention -- to the point that you can direct them to other information about a product" via a Web site, a phone number or a short film, according to Paul Rand, a managing director at Ketchum, a public relations firm that consults with various blue-chip advertisers and marketers.
But in the near term, two big changes are coming to the television networks. First, broadcast networks may start charging cable and satellite providers to carry their content in order to offset the decline in advertising. Second, shows themselves are going to contain ever-increasing amounts of product placement.
"ABC had an episode of `According to Jim' where the whole thing took place in an Olive Garden," Bartos notes. And advertisers are getting involved earlier and earlier in the process, and might, as in days of old, be the sole sponsor of individual programs.
"It's not just, `Hey, let's throw a Coke can in there.' The characters are going to be sipping Coke and it'll be a big part of the story line," Bartos says.
In other words, advertising dollars won't dry up completely. And for the few event broadcasts that remain -- the Super Bowl, the Academy Awards, the end of "Everybody Loves Raymond" and things like that -- ad rates will go higher than ever.
6. 500 channels? Try 5 million.
The biggest question about the future of television is, will there still be anything good to watch?
Most definitely. The trick will be sorting through the muck to find the good stuff.
In the not-too-distant future, TiVo's Ramsay says, technology will allow us access to millions of channels. And then, he says, "the challenge is, how do you help people find what they want in a world with infinite supply" -- a world in which every high schooler with a digital camcorder and a Web cam is a broadcaster and you can access dozens of channels from China to Chile?
And the catch is -- you were expecting a catch, right? -- is that it won't all be free.
The future is all about "on demand, anytime, anywhere -- but you'll have to pay for it," Schaeffler says.
Still, even in a world with 5 million channels, the good stuff will still rise to the top. At least that's Herzog's thinking.
"Content is still king," he says. "TV is going to extend and morph itself into several other kinds of platforms. It feels like we're at the beginning of a tipping point. . . . That's great news for content makers like us. We just have to figure out how to navigate it, because even with all the competition and all the fragmentation, it remains the biggest central force, always."
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