End of the Free Lunch (Is Television Doomed?)

As someone who, for both hobby and career, follows closely matters of importance in the entertainment industry, I have been alarmed for some time about the future of television programming. What I've got to say, I've been told, sounds very much like chicken little warning us all that "the sky is falling!" and yet, I remain convinced that there is real reason for significant concern.

First, a little bit of important background, history, and economics:

The early television programming was delivered to consumers purely over the airwaves, and could be received free of direct charge by anyone with a television antenna. We all know that, in a society driven by a free market, the providers of goods and services only do so in exchange for a profit of some sort, and those who make television programs are no different. Since they could not realistically charge consumers for watching their show (everyone could receive their product automatically on the airwaves), their profit had to be derived from some source, and so sponsorships were initiated. Building on the models established in the radio industry, advertisers were solicited to pay the production costs plus a profit margin for a show, and in exchange, they were given careful and conspicuous mention before and after the program to the "captive audience" of program consumers, as well as (in some cases) placement within the content of the show itself.

What began in 1948 as an attempt to bring local Philadelphia station broadcasts to consumers whose signal was blocked by nearby mountains became the next major transition in the industry: cable television. The ability to bring out-of-market stations thereby allowing a greater selection of programming was the first creative application of that technology, and it wasn't long before it was realized that a provider of these signals through CATV could include channels not available by airwave broadcast and charge a price for the service. This developed into the two additional relationships programming might have with consumers: first, stations that charge a miniscule, nominal fee to cover the cost of the cable transmission technology, but which earn their production costs and profit margin like broadcast (using advertising); second, premium stations that charge a significant fee covering transmission costs, production costs, and the profit margin, allowing sponsor and advertising-free programming. The latter have slowly grown in popularity and breadth of programming, but still only provide some alternatives, and never truly threaten the "free", advertising based system; in recent years, "on demand" programming over digital cable lines has been another advance in this arena, but continues to not truly threaten the mainstream.

So how is the sky falling?

A more recent advance in only the past decades, satellite television, developed technology that has become more and more common with the development in recent years of digital cable, allowing selected programming to be recorded onto a hard drive for playback at a later date. Hand in hand with this technology are the natural controls over that playback, allowing pause, rewind, and fast-forward. The result, as I have seen evidenced in the changing habits within my household and most of those around me who also have digital cable, is that programs are seldom viewed at the time of broadcast, since the patience to wait until after the program is recorded rewards the consumer with the ability to fast-forward through the advertising.

This will eventually be a BIG problem. A problem that may change the entire complexion of the economics of this industry. Consider: a television network derives funding for production costs and the profit margin fron one place only: advertising. If the "fast-forwarding" practice eventually becomes so pervasive that a majority of consumers are bypassing the advertising, the value of that advertising will drop, eventually to almost nothing. This robs networks of their only income, and therefore makes it impossible to produce and deliver programming. Do not be fooled into thinking that the situation is any less dire for non-broadcast cable networks - they too derive their only income from advertising (your "cable bill" pays only for the technology and power to deliver their product to you, the "shipping and handling", so to speak). Indeed, only one construct exists in the current television industry that can survive this apocolypse: the premium program (such as a pay station like HBO or a pay-per-viewing service like InDemand).

So, imagine this: as income from advertising plummets to nothing, the cable television networks each become a premium network one by one... Comedy Central... The SciFi Channel... The Discovery Channel... followed, eventually, by even the national broadcast networks, which all either collapse and fold or convert into premium networks... ABC, CBS, NBC, FOX, WB, even PAX... all gone. The world now looks like this: those who can afford $5/month can subscribe to a station... those who can afford $500/month can still afford their 100 channel basic cable, while all the rest must choose what FOUR channels their $20/month will now afford... if you can afford none of this premium programming, all is not lost, you can still pick up a channel on your antenna: PBS, funded through charity grants, fund drives, and government assistance. Hope you like PBS.

Can you see the sky falling now?

Some hope to cling to...

Okay, okay... even I don't think it will come to that. But we are fooling ourselves to think that things will stay the way they are now; as far as "free" programming goes like that on broadcast network or cable networks goes, the system will need to evolve to survive. Some of the possibilities I have heard about recently include the following:

• ...technological patches incorporated into the data of a program that forces display of the advertising in order to display the desired portion... unfortunately, because the technology that enforces such viewing is unlikely to be able to do so one topic at a time (advertising, then program, then advertising, as we're accustomed today) as it would require defeating simple vcr control functionality, the alternative is much more reminiscent of the internet approach, wherein banner advertisements are shown concurrent with the content on the same page simultaneously. Ick.
• ...more creative, direct incorporation of advertising directly within the content itself. Remember the scene in the movie Wayne's World with rampant product placement? Bingo. It might not be quite so bad as that, though - some fairly unintrusive product placement is already a common paid advertising practice today and we barely notice. But it always begs the question: will the art itself suffer significantly because plot and cinematography have to be written specially to cater to these sleazy but necessary motives?
• ...more creative, interesting advertising that people actually choose to watch. Ridiculous, right? Well, there exists some evidence already today to suggest that this isn't so far fetched. First, a great many people look forward to watching the commercials during the Super Bowl because of the very clear intent that advertisers show to make the ads entertaining. By lengthening ad time and adding engaging plot and/or humor of real quality (rather than the insultingly mindless gimmicky stuff most common today), a few prime examples have already proven it possible to gain an audience, such as the Jerry Seinfeld / Superman short films from American Express (downloaded in droves when released), or a recent bizarrely successful spoof of soft pornography actually advertising a seat cushion (actually ordered by the thousands by hotel patrons on their in-room movie system). Would it be so bad if commercials were generally that entertaining, and if they took up 15 minutes all at once before the beginning of a regular hour long program, then presented in its 45 minute entirety without interruption?
• ...pay-per-view on an immensely grand scale, at ultimately minimalized prices... would you pay to watch your favorite programs each week, commercial free, as many times as you want, for $0.25 per episode? The idea has been floated... but there is no question that this would greatly limit productions, since only the sure-fire programming would get produced. Oh, wonderful... a million different shows all staring the talentless trainwreck that is Paris Hilton.

If no movement happens the alternative is grim!

Whichever options the industry decides to pursue and experiment with, I desperately hope that they move quickly, because the default evolution right now is, perhaps, the worst option of all: more and more reality programing and pseudosport events. That's right, one of the reasons all those horrendous reality programs survive season after season without being cancelled while quality shows are tossed left and right is because of this conundrum. Not only do reality shows cost much less to produce (requiring much less advertising income to recoup those costs and turn a profit), but, put very simply, live "event" programming is the only kind of programming that transcends the DVR, because people want to watch it live. Nobody wants to have to hear at work about what deplorably unforgiveable thing enemy-to-humanity Simon said to the last American Idol contestant last night - they need to see it now. The same goes for any reality program, or sports as well (hence the expansion and invention of genre after genre of never-heard-of-before pseudosports), since we all want to see the big game live.

Please, television industry, I'm begging you. Before too much more of your programming is absorbed by the social cancer that is reality shows, look up, and see that the sky is falling - and work to see how we can save the henhouse.