TV networks fight back amid online turmoil

Michael Rogers Columnist • Profile • E-mail

This week marks the start of the television “up-front,” when advertisers traditionally buy much of their commercial time for the upcoming season.

No one’s quite sure how it will go this year: advertisers are worried about the rapid proliferation of the digital video recorders that let viewers zap their commercials, so they may see television as less valuable. Marketers are also reserving more of the dollars they once spent on television for the Internet. But at the same time, the television folks are embracing the Internet, with one big advantage: as the last medium to come to the Web, they have some history to look back on. And both print and the music industry provide key lessons in what not to do.

Magazines and newspapers were the first on the Web in the mid-1990s and adopted the then-reigning ethos: everything for free. We can always start charging later, went one theory.

More visionary folks saw that the Internet would someday be an incredibly powerful advertising medium: We’re going to make it up on advertising. But it turned out there is enormous competition for ad dollars on the Web — community sites, games, search engines, and soon even application software, all competitors that print never had to face in the real world.

While many magazines and newspapers are attracting a large Web audience and lots of advertising, the revenue may never match what they made in the real world.  Print’s future on the Web: downsizing.

Next up was the music industry. Early on there were smart people in the recording industry who saw the potential of legal downloading: What business wouldn’t like to sell direct to the consumer with no physical distribution costs?

But the industry was both complacent and overly concerned about upsetting the existing CD distribution chain. Thus they dragged their feet on downloading and were entirely overwhelmed — with no legal alternative to offer — when Napster appeared in 1999. Seven years later, illegal downloads still vastly outnumber legal online sales.

Now that video-capable broadband reaches more than half of American homes, it’s television’s turn to leap.  And they’re doing something that’s collectively very smart.

Five networks — ABC, NBC, CBS, Fox and WB — have announced a panoply of varied Internet initiatives that include both streaming and downloading, both for-pay and advertiser-supported, and even a deal with BitTorrent, the current number-one technology used by those offering illegal video downloads.

Some of the approaches virtually ignore the local stations (the current distributors); others cut them in on the deal. When you step back, it almost looks like an industry-wide research project, throwing a half-dozen business models at the wall to see which ones stick. As soon as winners emerge, you can bet the rest will follow — television executives are, if nothing else, very good at copying each other.

MORE FROM PRACTICAL FUTURIST

Practical Futurist Section Front

Will the Internet transform storytelling? What evolutionary psychology says about social networking At this radio network, the audience is the star Is the Internet dumbing us down? Who will fix my wired (and wireless) home? Will road warriors choose electrons over airplanes? Who will be the TV Guide of the Internet? Why is U.S. always last for new phones? Weighing the risks of biotechnology What will make the laptop obsolete? Practical Futurist Section Front   Add Practical Futurist headlines to your news reader: