2005: The Year TV Broke Out of the Box

At the beginning of 2006, we are at an exciting juncture in the history of television. Even as the old aristocracy attempts to cling to what was, the emerging new technology won't be tamed, controlled, or mandated by Congress.
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At the beginning of 2006, we are at an exciting juncture in the history of television. Even as the old aristocracy attempts to cling to what was, the emerging new technology won't be tamed, controlled, or mandated by Congress.

These are exhilarating times, especially for the television creators who have long chafed under the bottom-line-feeding gatekeepers. Bob Dylan nailed the situation well when he penned the lyric: "...something is happening here. But you don't know what it is. Do you, Mister Jones?"

SYSTEM MELTDOWN?

It was quite a spectacle watching legislators go through their annual year-end backroom ritual, negotiating the minutia of DTV broadcasting while--in the reality-based world--the entire traditional television distribution system was in meltdown.

In the last three months of 2005, more happened to change television than occurred in the 20-odd years of the clueless "DTV transition." In short, TV broke out of the box. And it's never going back.

Of course, it had been building throughout the year. From the historic summer Webcast of Live 8 to the migration of television news to the Internet after Hurricane Katrina, the shift away from traditional distribution rapidly evolved from month to month.

But it was Oct. 12 when the "big bang" occurred.

That was the day that Apple Computer's chief visionary, Steve Jobs, introduced the first iPod with video playback capability and a new version of iTunes that offered major television shows and other video programming for download at $1.99 a pop.

Boom! In only 20 days, Apple's customers bought a million video programs. The era of a la carte video arrived spontaneously, without the help of the cable companies or FCC chairman Kevin Martin.

"Selling one million videos in less than 20 days strongly suggests there is a market for legal video downloads," mused Jobs. "Our next challenge is to broaden our content offerings, so that customers can enjoy watching more videos on their computers and new iPods."

That, he did. By year's end--in less than three months--iTunes had sold 3 million videos. Also, significantly, what began as a handful of primetime ABC programs rapidly grew to more than 300 episodes of more than 16 popular TV shows. A flurry of deal-making will have pumped up this number by the time you read this.

THE RUSH TO PARTICIPATE

None of this gold rush was lost on the owners of television programming, ranging from the broadcast and cable networks to small independents. As established players scrambled to make a deal with Apple for new distribution, others were looking to mobile phone carriers to distribute their programs over new 3G networks.

Apple's success sent a real jolt of excitement through the independent video community. Now, a clear path is emerging that will enable video distribution to the end user without the need of television broadcasters and pay TV networks.

Some compared it to what is happening with music distribution. Many artists are finding success today outside of traditional record companies, choosing to make and self distribute their recordings directly to customers over the Internet.

Now, with affordable camcorders and desktop television post-production technology, programming can be made outside the traditional studio environment. It can then be marketed and distributed directly from a Web site.

Even self-distribution is being simplified. For example, America Online has joined a Massachusetts company, Brightcove, to create an automated distribution system that would allow independents to distribute their video over the Internet without the need to negotiate special contracts.

To simplify the distribution process, the proposed AOL-Brightcove system will offer a standardized revenue sharing deal that is activated after a program is uploaded to their server.

In observing this shift, it is interesting to note that the traditional broadcast networks are justifying their move to new outlets with the argument that--at least for now--Internet distribution is not affecting traditional broadcast viewership.

In fact, NBC-Universal Television CEO Jeff Zucker said that fact was an important reason NBC joined Apple's video distribution platform. During an interview with The New York Times, Zucker forecast that his network is about to break out of the box to several new television distribution platforms.

"A year from now, you will see us on ever more platforms," Zucker said. "Whether it is a cell phone or an iPod or a computer, we don't care what screen it is."

We suspect that when most TV programming is available a la carte and on-demand, that Internet distribution will affect traditional broadcast viewership. Wonder if Mister Jones will have figured it all out by then?