Nearly all observers are sure that someday soon, consumers will watch televisions anywhere, on any device—television, computer, or smartphone. Today, once major shows are aired, broadcast TV networks upload them onto their Web sites or to sites such as Hulu and YouTube. One survey reported that in one month alone, more than 178 million Americans watched 33 billion TV shows online.
Across the Atlantic, Britons use BBC’s iPlayer to catch up with missed TV episodes online. The BBC and other British networks plan to unite broadcast television with online media in a new, hybrid configuration.
In the United States, viewers have enjoyed watching TV shows on their computers for free. Those days may be over soon—or then again, it may take a little longer.
Advertising fees bring a total of $70 billion to broadcast and cable television networks. Cable and satellite providers pay broadcast networks billions more in retransmission fees and make billions in fees from subscribers.
But when broadcast television networks upload their shows to the Internet, viewers don’t have to pay cable and satellite providers, and the networks lose the revenue from cable and satellite licensing fees. Advertisers pay the networks for the right to embed their ads within the video content. But many advertisers shy away from online television because there is still no clear way to measure how effective their commercials will be. One observer says, “Advertisers aren’t going to pay for the right to sponsor content [TV shows] unless they know how many people are watching it. The technology is available, but it is still in the process of being implemented.”
Online television still has one major drawback: most of it is not live. CBS had live, online coverage of the recent NCAA basketball tournament, but that was an exception. Live broadcasts of shows such as American Idol and the Super Bowl charge the highest advertising fees. But online licensing problems and technical issues have made TV networks wary of live online broadcasting.
As viewers exercise their increasing options to watch what they want when they want it, some analysts predict that the only programs that large numbers of people will view at the same time will be sports events and news programs. Some viewers have even stopped their cable subscriptions and watch TV exclusively online via downloads from Netflix, iTunes, and Amazon.
Another difficulty is that no one has yet developed a way to make the potentially infinite array of Internet programming available on television in a user‐friendly manner. But as in Europe, Internet‐ready televisions will be available in the United States. Best Buy has announced that soon all the Internet‐ready televisions it sells will give buyers the option of subscribing to a Best Buy trove of downloadable broadcast materials. Other TV manufacturers will likely make similar offers.
Subscription television services may be the way of the future, although some generic shows, such as news, cooking shows, and how‐to programs will remain free just because they are not unique. Recently, Microsoft unveiled its Mediaroom 2.0, which combines client software with cloud‐based services to allow consumers to watch shows either on a flat‐screen TV, a personal computer, or, in the future, on compatible smart phones. Enrique Rodriguez, Microsoft’s corporate vice president for TV, Video and Music Business, says, “We want to make it easier for consumers to find and discover great content, to watch, listen and engage in new ways, and to do so anywhere and on any screen.”