Experts agree: IP-based digital services are the future of television

Only a week after over-the-air broadcasting was celebrated at the NAB Show in Las Vegas, the scene shifted last week to New York City for the Ad Age Digital Conference. There, the future of terrestrial broadcast television was not envisioned as so bright.

Panelist after panelist told the conference that the future of television resides in the patchwork of digital services now emerging on the Internet. Most of those panelists are heading companies that are trying to reinvent the television business model. 

One panelist, Chet Kanojia, the CEO of Aereo, the Internet television service being sued by broadcasters, said that when his company is combined with Netflix (opens in new tab), Hulu (opens in new tab) or iTunes, (opens in new tab) it allows users to effectively cut the cable and get essentially the same programming for one-tenth the price.

“[Aereo] is an alternative for consumers who chose not to consume TV in conventional way,” Kanojia told the conference.

He noted that one of the major problems with cable is that operators are charging customers big money for hundreds of channels when they only watch an average of seven or eight. A breaking point, he said, will come soon.

Threats by broadcasters at NAB to remove their programming from the air if Aereo continues its service, Kanojia said, would disenfranchise the 54 million people who are still using antennas. But, it would also free up spectrum that other companies might use to serve those who are disenfranchised, Kanojia added.

Discussing how Aereo will be able to expand its channel offerings without falling into the old traps of cable pricing, Kanojia suggested that a free or low-cost news package is likely on the horizon.

Aereo, he said, sees the future of television content as being a “skinny live, deep library” with what people need in real time — news and sports — being available for live viewing and rest delayed.

Shawn Strickland, CEO of Redbox Instant, a movie service, said the average streamer subscribes to 2.2 services — seeking different things from each service. He suggested there are many models out there that can co-exist.

“The over-the-top industry is working to reinvent the business model,” Strickland said. “It’s really a la carte.”

Actors, producers and writers are also turning toward digital platforms as hubs to create content. “Desperate Housewives” star Eva Longoria, a panelist, said she is introducing an original animated series called “Mother Up” to Hulu.

“Hulu has become a great destination for content,” Longoria said. “You are not contained to the normal laws of telling a story, can get creative with time, content and characters. It’s a good destination for us.”

In the same way the creative community took an interest in cable after hits like AMC’s “Mad Men,” it is now turning to digital after the success of “House of Cards” on Netflix.

As a TV actress, Longoria said there is a nervousness over the changing TV landscape.

“TV in general is an elevator that’s gone down,” she said. “It’s not affecting just one network … Those [big] numbers just don’t exist.”