The television of the future will provide entertainment on demand; whatever, whenever, and wherever you want. It will be far superior to TiVo, which only lets you record the programming that your cable or satellite company offers. It will outshine Apple's new video iPod—who's going to watch an hour-long drama on a 2.5-inch screen, anyway? And it will be far more grandiose than even that Qwest ad from the late 1990s, where a motel clerk tells a traveler that he can watch "every movie ever made, in every language, any time, day or night" from the comfort of his room.
You'll not only be able to watch every film, but also every TV program, news show, documentary, music video, and video blog, and all of it will be playable wherever you go. Great, you think: Thousands of channels, millions of choices, and still nothing worth watching. Nevertheless, "nonlinear TV"—watching the tube on our schedule, not the broadcasters'—is our destiny. The revolution will not be televised, however, until the companies that funnel the content into our homes figure out how to control it. The best advice for now: Study the music industry and do the exact opposite.
When Hollywood and cable executives look at the record companies, they see an industry in decline. What they should see is a business that failed for too long to offer its customers what they want: portability, searchability, and the chance to buy the two songs you like without the 10 you don't. Music companies, fearful of piracy, dragged their heels on offering digital downloads, so their customers made it happen themselves via Napster, Kazaa, and the like. Rather than create a legal and lucrative alternative, the record industry has launched a flurry of lawsuits against its own customers and continued to blame piracy for falling CD sales. Meanwhile, Apple's iTunes Music Store has sold half a billion songs since April 2003. When users can download only the songs they want at 99 cents a pop, the industry's traditional business model—charging a high price for a heavily promoted, shrink-wrapped product—gets obsolete pretty fast.
The reason Hollywood and the television biz haven't yet read from the same script is bandwidth. While a typical music file takes a minute or two to download on a fast connection, a full-length movie can take hours. Hence there was little demand for downloads of Shrek, especially with the advent of TiVo and the various digital recording schemes that cable companies offer. But this has started to change with the emergence of a peer-to-peer distribution system called BitTorrent.
Once you've downloaded the BitTorrent software, you can grab files from users who already have the stuff you want on their computers. With peer-to-peer music swapping services, downloading is a lot faster than uploading, which creates digital traffic jams when users swap the same file. While it doesn't make much of a difference when users trade music, it does when swapping extremely large files like movies and TV shows. BitTorrent gets around this built-in bottleneck by letting you take small pieces of the file from different users. The more popular the episode, the more people save it to their hard drives, and the faster the download.
Of course, this isn't legal now. It isn't exactly illegal either, since BitTorrent does have legitimate purposes—you can swap any file using the BitTorrent protocol, not just copyrighted movies. The Motion Picture Association of America and the TV networks would probably have a hard time suing it into the ground like the music industry did with Napster. What they should do is co-opt it: Follow Steve Jobs' lead and charge $1.99 per episode, using BitTorrent as a distribution pipeline.
Even if Bram Cohen, BitTorrent's creator, won't stand for this, media conglomerates could set up a network of servers that holds all of their programming and use BitTorrent to distribute the content to consumers—for a price. What's Cohen going to do? Sue them for copyright infringement?
Although it's impossible to stamp out piracy, Apple has shown that consumers will pay for music if it's available. All Hollywood has to do is make it an easy, fun, satisfying experience. Many networks have started to experiment with putting their shows online. Before ABC cut that deal with Apple to sell episodes of Lost and Desperate Housewives, MTV (which is owned by Viacom) had already put 8,000 music videos on the Web. MTV Overdrive also includes highlights from Total Request Live and online-only outtakes and commentary for shows like Laguna Beach. The channel's recent acquisition of Internet video service iFilm likely means it will add more content in the months to come. And it's all free, paid for by advertisers like Toyota and Procter & Gamble. (The appeal is stifled somewhat, though, since unlike with real television you can't channel-surf away from the ads.)
The audience for MTV Overdrive isn't huge yet—according to an MTV spokesperson, about 73 million total viewers have tuned in to the TV version of Laguna Beach as compared to 6.3 million who've watched the online programming. I'd bet that a good amount of people who've tried Overdrive haven't become repeat visitors. The biggest problem is quality. Streaming video, with its lag times, skips, and disconnections, is just not ready for prime time. Until it can offer the reliability of analog and digital cable, it won't look like anything but a weak sister.
The networks don't have to distribute programming via streaming video, however. Television viewers don't watch most content in real time. They see it well after it has been shot and edited. West Coasters also typically watch Desperate Housewives three hours later than East Coasters. The only content that necessarily has to be seen in real time is breaking news and sports. People will tolerate iffy quality if the news is important enough. For all the rest, Hollywood and TV should forget about streaming video and provide digital downloads of movies and TV shows. Otherwise, consumers will figure out a way to get them without paying for it—and they'll be sorry.