THE CRITICSMARCH 2008 THE ATLANTIC

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CONTENT

TV can avoid the music industry's fate and survive the digital age,but only by beating the Internet at its own game.

The Revolution Will Be TelevisedBY MICHAEL HIRSCHORN

One of the most exhausting thingsahout new-media Moonies is their

cultish conviction: either you "get it"or you don't. But they're right, up to apoint. Its like when you're finding yourway around a strange city: you have tosee the whole thing in its full concep-tual clarity hefore you can even hegin tounderstand the particulars. The classiccase study is how Steve Jobs shanghaiedand basically destroyed the CD business.Tlie major record labels, in giving Apple'siiHines the right to sell individual songsfor 99 cents each, undermined theirown business model—selling bundles

of songs gathered together into some-thing called an "album" for up to S20a pop—because they didn't see thatpeople were ahout to consume musicin an entirely new way. The labels sawiTunes as free money; "ancillary," in thelegal vernacular. Johs took their cheapmusic and used it as a loss leader to sellhis expensive iPods, and the traditionalmusic business now lies in tatters.

Since I work in the traditional TVbusiness, I'd been resolutely not seeinghow the exact same thing is happeningto video. Certainly, I'd heen followingthe rise of Web-based video services like

YouTYihe, Joost, and Hulu (the latter twobeing, to different degrees. Big Media-funded attempts to create satisfjing expe-riences roughly analogous to watchingTV, except on the Weh). More recently,Miro, a nonprofit, launched a high-definition Web channel. And iTunes wentvideo as well, offering a mix of profes-sionally produced video and video pod-casts from amateurs and quasi-amateurs.Like the record labels before them, TVnetworks and studios licensed some oftheir content to Apple, allowing iiXinesto sell shows and movies with the sameone-price strategy it had applied to music

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($1.99 for TV shows; $9.99 for movies).The video iPod, competing with video-enahled cell phones and other viewingdevices, allowed visual content to gomobile as well, auguring a period of videoeverywhere, immediately, all the time. Allof this seemed like peripheral noise, digi-tal noodling, because it was ohvious: peo-ple love TV. They'll never stop watchingTV. YouTuhe is popular, hut doesn't counthecause it's not really TV: it's short-formcrap. Produced TV is shinier, more pleas-ingly narrative. These are eternal values.

A recent visit to Houston, though, con-vinced me that I just hadn't been gettingit. My friend Mike and his wife had doneaway with their TV entirely and insteadhad set up their 20-inch iMac wide-screen as the focal point of a kind of jerry-rigged home theater; with no grievous

Sony BRAVIA taking up too much space inyour living room. Then, that content willbe edited, poked at, commented on, paro-died, and rehroadcast hy you the formerviewer—now "user"—to whomever youchoose. Who gets paid by whom to deliverwhat to whom in this new dispensation is,as in every moment of grand tectonic dig-ital shift, the $60 hillion question.

And it's far from ohvious that thepeople being paid now will he the peo-ple being paid a few years from now.The post-World War II model of expen-sive video driving a massively profitablecontent-production industry (that now-legendary SIO million pilot for Lost, those$200 million movies) is in some peril-much as, tor the first time, it is conceiv-ahle that one or more of the major recordlabels could go out of business entirely.

Who gets paid by whom to dehver what towhom is, as in every moment of grand tectonic

digital shift, the $60 bilhon question.

loss in quality, they were feeding it withcontent from iTunes, various other Web-based media services, and DVDs. In doingso, they had dispensed with those hef^cable bills and had asserted an icono-clastic form of control over their medialives. It turns out, anecdotally at least,that lots of other people are doing thesame. And that was my Homer Simpson

"D'oh!" moment. Video without a TV con-sole was not only possible, it was likely.

The traditional TV-viewing experi-ence doesn't have to die (for reasons I'llget into later), hut to save it, the media-industrial complex will have to act in non-traditional and uncomfortable wa\-s—andwill also have to rethink what "TV" is. Cur-rently, it means watching a professionallyproduced \ideo program—passively—ona television console that is fed with con-tent delivered as part of a subscriptionto a cable or digital service. In the future,TV will mean a cacophony of professionaland amateur short- and long-form con-tent shipped via a variety of platforms to avariety of devices, only one of which is the

Among many other matters, the writers'strike (still ongoing at press time, pos-sibly to he followed by an actors' strikethis summer) is a final, great battle royalover content profits at what might be thelast moment when such profits are worthfighting over—like steel workers' strikesin the '80s.

The storj' of digital video is not nec-essarily going to be the same as that

of digital music, though the parallelsbetween Napster and YouTiibe are fairlyuncanny. It's not self-evident that watch-ing long-running movies or TV shows onvery small devices will become a massbehavior. According to a recent study, themajority of Internet users watch roughly3 hours of \ideo on the Web each month,compared to the average persons 4.5hours of TV each day. For all the hypesurrounding Web video, it was not sur-prising that NBC, responsible for 40 per-cent of iTunes's video sales, had earnedonly S15 million last year on those sales, apoint NBC Universal's chief, Jeff Zucker,

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made (uncontested) in announcing hewould pull NBCU shows off iTunes at theend of last year. (This content is mostlygoing to Hulu.com, NBC's joint venturewith Fox, where NBC hopes to sell adver-tising time much as it does on the air.How this will work better, given the still-unproven Web-video advertising market,remains undetermined.)

The video stor\' is different from themusic story in another crucial way Beinga music fan traditionally involved goingto the record store (remember tbose?) orordering from Amazon and committinga large sum of money to a product yonknew about only via one or two songs, andthen usually being disappointed by whatyou got. The iTunes mnsic model, andthe illegal-download model, representeda quantum leap in consumer satisfactionover the previous iteration: you could payfor only the songs you wanted (or not payat all!), and there was a convenient sort-ing system that meant you could get ridof all those CDs and broken jewel cases.The traditional-TV model is altogethermore user-friendly. It's free, or at least thecosts are buried in cable bills (where, myHouston friends notwithstanding, years oflearned behavior dictate that this is sim-ply a cost to be borne), or tbey are buriedin tbe more recent "triple play" offeringsfrom Comcast and other companies thatbundle cable with phone and high-speedInternet, obscuring the costs even more.

Watching video on the Web, contra-trend, remains more of an analog experi-ence than watching it on TV. On TV, yoncan click through hundreds of offeringsinstantly, or choose from dozens moreyou've recorded on your digital videorecorder, and there's a handy electronicprogram guide to tell you what's on andwhen. On most Web video sites, how-ever, clicking frcjm show to show involveslaunching and relaunching players andthen sitting through seemingly inter-minable 'pre-roll" ads (and it's almostalways the same ad). The quality remainssubpar, with poor definition, small playerwindows, and unsynced audio and video.The selection is spotty, and there is nocentral guide to what is available whereand when. It's easy to say these problems

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will be solved, but there's always tbe sus-picion tbat the experience is intentionallybeing made unsatisfying so tbat peopledon't leave tbeir TV .sets too quickly. AsiMark Cuban, tbe not-as-boorisb-as-be-appears Internet entrepreneur-cum-Dallas Mavericks owner-cum-reality-TVstar, bas pointed out, tbe curve on Webinnovation bas stalled, even as band-widtb bas begun to top out. In otberwords, only so mucb data can be tbrusttbrougb tbe Internet's distributed nodes,and tbis structural limitation makes itunlikely tbat a satisfying, seamless Web-video experience will be on offer any-time soon. For tbese reasons, witb greatcounterintuitive brio, Cuban last yearpronounced tbe Web "dead and boring."

Tbis is wbere tbe problem and oppor-tunity lie for traditional lY. Tbe Hip sideof tbe music business's obstinacy is akind of we-need-to-be-down-witb-tbe-kids type of berd mentality-. It dictatestbat unless you tbrow everytbing online,you don't "get it." But "getting it" doesnot necessarily mean giving in to tbebraying of tbe digerati, especially wbenyou will destroy your business in tbeprocess. In tbe past couple of years, tbeTV networks bave tbrown tbeir sbowsonto tbe Web willy-nilly, some on tbeirown sites, some via AOL, Yaboo, and sofortb, and some on new ventures like tbeiiforementioned Hulu. Tbe logic is tbatif tbey don't, someone else will; indeed,a dedicated surfer can find most anysbow tbrougb sub-rosa peer-to-peer file-sbaring systems tbat are used by anastonishing proportion of Web surfers,perbaps as mucb as 70 percent of tbetotal. In tbe age of distributed media,\'ou give tbe people wbat tbey want wbenthey want it, wbere tbey want it. "If tbeywant tbeir show to succeed, tbey've gotto get it out in front of as many people aspossible," an analyst for tbe technologyresearcb firm Forrester said of tbe BigFour broadcast networks, articulatingtbe moment's conventional wisdom andfollowing it witb a typical note of alarm:"Tbe window is very short."

But as tbe music industry learnedvery quickly (and tbe newspaper industrybefore it), tbis model swiftly turns you

THE CRITICSMARCH 2008 THE ATLANTIC

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from a business to a charity, undermin-ing the value of your product even as itbrings your content to a larger audience.This is because advertisers and broad-rasters have yet to settle on a protocol tosell advertising to accompany the near-infinitude of available content, and con-sumers are not yet ready to spend a lot ofmoney paying for downloads. As NBCU'sZucker put it in announcing the end ofthe network's iTunes deal, "We don'twant to replace the dollars we were mak-ing in the analog world with pennies onthe digital side."

onveniently, there's a solution, and it'sright under the noses of the TV net-

works: make TV more like the Internet.In his various Web postings, Cuban hasbeen promoting huge innovations com-ing in high-definition television, includ-ing the arrival of ftill Web iunctionality innext-generation TV sets and set-top cableboxes. "If the question is 'What's Next,'"he concluded in one, "the answer beginswith 'Watch TV" Cuban co-ovras a high-definition TV network, and may beaccused of self-promotion, but I'minclined to trust him on this one. Thismeans, as Cuban suggested, embracingTV'sWebbypotential: near-infinite choice,the ability to manipulate and share con-tent, deep and meaningfiil interactivityaround professionally produced content,and a savvier, more "open source" strat-egy about how nonconventional contentis allowed onto and promoted on thebig screen. New set-top boxes recentlyannounced separately by Comcast andNetflix suggest a strong push to connectTVs to the Web. Web-enabled TV wouldlikely mean a profound loss of control for'W programmers, as the traditional pre-rogatives of scheduling became increas-ingly moot, and with them the meaningof "networks," since most shows wouldbecome equally accessible, no matterwhat network they were affiliated with.

As we move toward a fully on-demandculture (my 6-year-old son literallydoesn't understand why I can't replay asong he just heard on the radio), TV doesneed to follow suit, no matter how fash-ionable that sounds. But it does not have

to follow suit on the Internet (or at leastnot only on the Internet). There is no rea-son 'W itself cannot compete as Cuban'snext-generation version of the Web,offering endless choice (huge stockpilesof movies, entire seasons of TV shows),user editing and sharing capabilities(e.g., sending that Gossip Girl clip youjust watched to your friend in Cleveland),playback, storage, and WiFi, whatever.And because the data all flow throughthe same pipes already, but without thedestabilizing influence of the Internet, TVcan offer brilliant resolution, even on aflat-screen 60-inch set.

A recent article in the trade publi-cation Multichannel News warned thattechnical obstacles still prevent realiz-ing this kind of vision, but serious tech-nical problems bedevil Web video, too:a.s Cuban has been loudly blogging (theemperor has no clothes!), it's just not sat-isfying. This means TV has a buffer of afew years to figure out the bandwidthissues, the technical bugaboos, and thebusiness model. But I would sit throughads, and maybe even pay more for cable, ifI knew that I had some approximation ofa Borgesian library of video content avail-able to me at home—content that I couldtalk back to, manipulate, and share.

And here's the final twist. As TV andthe Internet converge into somethinggenerically known as broadband, thedistinctions between the two will soonbecome nugatory from a consumer pointof view. But will this resulting hybrid bemore like TV, plus interactivity; or morelike the Internet, plus TV? The distinc-tion will be worth billions to whoevergets there first and organizes this messin a fashion that's satisfying for consum-ers. The networks and cable companies,therefore, will need to move quicklyto find a way to package the differentstreams—professional and user-made,broadcast and Internet—into a huge,interactive library, all easily and pleas-ingly accessible on demand and portableto whatever device people are overpa>Tngfor at that moment.

When they do, they can call it Web3.0, and everyone will want to get it. fJMichael Hirsctiorn Is en Atlantic contributing editor.

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