Thinking About The Future of TV All Wrong

family wathching flat tv at modern home indoor
I’m convinced that most of the commentary from the pundits and speculators around Apple TV and the future of TV in general is all wrong. There are some bits that I think have merit. Thinking about channels as apps for example is on the right path. Letting networks and brands have more control of their viewers is also on the right path. Thinking through how we will interact in active vs. passive ways with our contnet is also on the right path. But at a fundamental level there is something not being emphasized enough in this whole discussion of the future of TV.

TV is a Communal Experience

Right now, for most people, the TV is a communal experience more than it is a personal one. For example most people’s TV screen is in a communal place. It was designed from the beginning to be something that people gathered around and enjoyed together. This is not going to change. By nature of the size of the screen and its location, if more than one person lives in a house, the large TV monitor is a shared experience.

Most of the commentary I read around the future of TV brings with it a bias of an extremely personal revolution rather than a communal one. I get the sense as I read much of the ideas put forth around the future of television that many assume that the TV screen and the entire broadcast experience itself will become more personal. Now, while I think the TV experience will become more personal, I don’t think it is the large TV screen where the revolution will take place.

The large television set is a communal computer not a personal one. Therefore, its evolution will happen within the communal context.

Second, Third, and Fourth Screens

Using a smartphone, tablet, or traditional PC while watching TV is now common place among owners of such screens. These devices have something in common which the TV does not. These screens are highly personal. They are owned and customized and are portals to a very personal computing paradigm. So it is on these screens that I am expecting the coming TV revolution.

As we gather around the TV, it is the most personal screens which we have customized, where it makes the most sense to bring the personalized experience with broadcast content.

Nearly every major network studio has an iPad app. Some have Android apps but not all of them. Not only do the networks have apps but now many individual TV show brands are also beginning to have an app. One only has to look at the Colbert Report app for a shining example of the possibilities when TV shows themselves start creating software.

A Hybrid Entertainment Experience

The key to thinking about the future of TV is to understand that the TV set itself will remain a communal and shared screen. But our personal devices, like tablets and smartphones, will increasingly become the avenues by which what we watch on the big screen becomes personal and even intimate. Of course both these screens will still function as independent entertainment experiences, but the real revolution will come when you use them together.

The real shift is that content companies (like the big networks) will also need to become software companies. It is my belief that the televsion is the laggard in the computing paradigm. It is the screen that is yet to truly be a platform which software developers can take advantage of. When this happens the TV revolution will begin and take us on a path no one yet envisions.

Why Content is the Biggest Roadblock for Apple TV

It appears as though the “Apple is making a TV” discussion is coming back around. Probably because of rumor reports that “sources in the know” are talking about a brand new product category.

Apple has a hobby business in a product called Apple TV. At some point in time this hobby will become a business, the question is when. The other question is will it be in the form of a full blown television? Will it simply be a set top box? Or perhaps will the iMac become a 40′ or larger monitor /TV?

These are all interesting questions and I can see good arguments for and against all of them. However the real issue as I see it is the content industry.

Problem #1 Hollywood
What many people don’t know is that Hollywood is nearly impossible to deal with. Unlike the record labels whose business is more distrubution, the movie studios and TV networks prefer controlled distrubution. Both the TV studios and the movie studios carefully control when, where and how their content is distrubuted.

They have exceptionally strong legal rights to their content and because of that they are in the driver seat. Take for example Starz, HBO and Showtime.

If you have ever wondered why there is no digital “subscription” service for first release titles of movies it is because Starz, HBO and Showtime own the rights to first run movies as a subscription service. This is why as a part of their subscription services comapnies like Netflix, Apple, Amazon etc can not offer a digital download or streaming subscription service which includes new releases on DVD.

This is why the only options to date to get a first release on DVD digitally is to buy it or rent it.

For any company to offer a subscription service to download or stream new release movies they would have to get HBO, Starz and Showtime on board, not to mention the studios, who I think have more lawyers than employees.

This is why in 2006 Starz tried to launch their attempt at a movie subscription service. The challenge with Vongo was that it didn’t have movies newer than 6-8 months depending on the studio.

The primary reason for this is because the studios want people to go buy DVD’s not subscribe to a service for the cost of a DVD that allows them to stream it as many times as they want. Because of that only the premium pay-per-view model is available for a movie in digital form until it has been on DVD for at least 6-8 months. So all though Starz, HBO and Showtime on the rights to a subscription movie service they studios don’t give them those movies until 6-8 month’s after it has come out on DVD.

Historically Blockbuster and now Netflix and Redbox get away with offering a subscription service for physical DVD’s because of copyright laws. Legally anyone can pay full price for a DVD and sell or rent that DVD at whatever price they can fetch. Unfortunaly digital copyright laws work differently.

Hollywood tighlty controls their first tier window of physical and digital DVD distribution and I don’t see that changing anytime soon. The fact of the matter is the purchasing of DVD’s is what they want people to do and they will protect that business to all ends.

To make a long story short, it would take a miracle for us to see a subscription service to stream new release DVD’s.

Problem #2 Comcast, Dish, DirecTV and others
What about a service to subscribe to network TV shows? We do this already since we pay a fee do Comcast, Dish, Time Warner, DirecTV or someone else. So it would seem logical to assume someone can offer something similar through the Internet.

The only problem is those above service providers pay hundred’s of millions of dollars for the rights to offer that content as a subscription service. The reason we get 100’s of channels for a fee each month is because hundreds of millions of dollars were spent to reserve the right to distrubute that content.

Put yourselves in the shoes of ABC, NBC, CBS etc. They get massive amounts of money up front for their programming. Do you think they are going to jeapordize that by letting people stream or access their content for free or cheap?

Although some networks today allow next day viewing for free with mandatory ads I am betting that at some point in time that model changes as well. What’s more is that even though supporting free streaming by ads is a business model, it comes no where close to hundreds of millions of dollars up front.

Hulu is in fact already experimenting with only allowing people to watch a show online the next morning if a fee is paid then anyone can watch it after seven days with ads.

I would expect in the near future if you want to stream a show for free online you will need to wait at least a week after it has first run. This will instantly kill any chance at the water cooler affect of a show and most likely discourage online streaming all together.

If you add up all the business model issues facing any company who hopes to offer or disrupt the current TV ecosystem it amounts to a monumental challenge.

The bottom line is the biggest hurdle for Apple to make Apple TV a business is not a technical one, it is a legal one.

I completely agree that the televion will someday become the next big platform to deliver rich content and services to and that it NEEDS to be disrupted in a major way.

But to quote a friend of mine who is a Hollywood lawyer:

“Two things drive Hollywood – fear and greed.”

I’m not optimistic that either of those forces will work in the technology industries favor.