|  
  
March 2009  
  
About twenty years ago people noticed computers and TV were on a collision
course and started to speculate about what they'd produce when they converged.
We now know the answer: computers. It's clear now that even by using the word
"convergence" we were giving TV too much credit. This won't be convergence so
much as replacement. People may still watch things they call "TV shows," but
they'll watch them mostly on computers.  
  
What decided the contest for computers? Four forces, three of which one could
have predicted, and one that would have been harder to.  
  
One predictable cause of victory is that the Internet is an open platform.
Anyone can build whatever they want on it, and the market picks the winners.
So innovation happens at hacker speeds instead of big company speeds.  
  
The second is Moore's Law, which has worked its usual magic on Internet
bandwidth.   
  
The third reason computers won is piracy. Users prefer it not just because
it's free, but because it's more convenient. Bittorrent and YouTube have
already trained a new generation of viewers that the place to watch shows is
on a computer screen.   
  
The somewhat more surprising force was one specific type of innovation: social
applications. The average teenage kid has a pretty much infinite capacity for
talking to their friends. But they can't physically be with them all the time.
When I was in high school the solution was the telephone. Now it's social
networks, multiplayer games, and various messaging applications. The way you
reach them all is through a computer.  Which means every teenage kid (a)
wants a computer with an Internet connection, (b) has an incentive to figure
out how to use it, and (c) spends countless hours in front of it.  
  
This was the most powerful force of all. This was what made everyone want
computers. Nerds got computers because they liked them. Then gamers got them
to play games on. But it was connecting to other people that got everyone
else: that's what made even grandmas and 14 year old girls want computers.  
  
After decades of running an IV drip right into their audience, people in the
entertainment business had understandably come to think of them as rather
passive. They thought they'd be able to dictate the way shows reached
audiences. But they underestimated the force of their desire to connect with
one another.  
  
Facebook killed TV. That is wildly oversimplified, of course, but probably as
close to the truth as you can get in three words.  
  
___  
  
The TV networks already seem, grudgingly, to see where things are going, and
have responded by putting their stuff, grudgingly, online. But they're still
dragging their heels. They still seem to wish people would watch shows on TV
instead, just as newspapers that put their stories online still seem to wish
people would wait till the next morning and read them printed on paper. They
should both just face the fact that the Internet is the primary medium.  
  
They'd be in a better position if they'd done that earlier. When a new medium
arises that's powerful enough to make incumbents nervous, then it's probably
powerful enough to win, and the best thing they can do is jump in immediately.  
  
Whether they like it or not, big changes are coming, because the Internet
dissolves the two cornerstones of broadcast media: synchronicity and locality.
On the Internet, you don't have to send everyone the same signal, and you
don't have to send it to them from a local source. People will watch what they
want when they want it, and group themselves according to whatever shared
interest they feel most strongly. Maybe their strongest shared interest will
be their physical location, but I'm guessing not. Which means local TV is
probably dead. It was an artifact of limitations imposed by old technology. If
someone were creating an Internet-based TV company from scratch now, they
might have some plan for shows aimed at specific regions, but it wouldn't be a
top priority.  
  
Synchronicity and locality are tied together. TV network affiliates care
what's on at 10 because that delivers viewers for local news at 11. This
connection adds more brittleness than strength, however: people don't watch
what's on at 10 because they want to watch the news afterward.  
  
TV networks will fight these trends, because they don't have sufficient
flexibility to adapt to them. They're hemmed in by local affiliates in much
the same way car companies are hemmed in by dealers and unions. Inevitably,
the people running the networks will take the easy route and try to keep the
old model running for a couple more years, just as the record labels have
done.  
  
A recent article in the _Wall Street Journal_ described how TV networks were
trying to add more live shows, partly as a way to make viewers watch TV
synchronously instead of watching recorded shows when it suited them. Instead
of delivering what viewers want, they're trying to force them to change their
habits to suit the networks' obsolete business model. That never works unless
you have a monopoly or cartel to enforce it, and even then it only works
temporarily.  
  
The other reason networks like live shows is that they're cheaper to produce.
There they have the right idea, but they haven't followed it to its
conclusion. Live content can be way cheaper than networks realize, and the way
to take advantage of dramatic decreases in cost is to increase volume. The
networks are prevented from seeing this whole line of reasoning because they
still think of themselves as being in the broadcast business—as sending one
signal to everyone.   
  
___  
  
Now would be a good time to start any company that competes with TV networks.
That's what a lot of Internet startups are, though they may not have had this
as an explicit goal. People only have so many leisure hours a day, and TV is
premised on such long sessions (unlike Google, which prides itself on sending
users on their way quickly) that anything that takes up their time is
competing with it. But in addition to such indirect competitors, I think TV
companies will increasingly face direct ones.  
  
Even in cable TV, the long tail was lopped off prematurely by the threshold
you had to get over to start a new channel. It will be longer on the Internet,
and there will be more mobility within it. In this new world, the existing
players will only have the advantages any big company has in its market.  
  
That will change the balance of power between the networks and the people who
produce shows. The networks used to be gatekeepers. They distributed your
work, and sold advertising on it. Now the people who produce a show can
distribute it themselves. The main value networks supply now is ad sales.
Which will tend to put them in the position of service providers rather than
publishers.  
  
Shows will change even more. On the Internet there's no reason to keep their
current format, or even the fact that they have a single format. Indeed, the
more interesting sort of convergence that's coming is between shows and games.
But on the question of what sort of entertainment gets distributed on the
Internet in 20 years, I wouldn't dare to make any predictions, except that
things will change a lot. We'll get whatever the most imaginative people can
cook up. That's why the Internet won.  
  
  
  
  
  
**