"The Future of Television" - The Digital Revolution
Monday, February 04, 2008SUSIE GHARIB: Super Bowl 42 made television history last night with nearly 98 million viewers. It was the second most watched program ever on TV. Television is woven into the fabric of American life -- in our homes, schools, restaurants, even on airplanes. But while television has evolved over the years, it's about to take a giant leap forward, as TV stations in the U.S. move from analog to digital. Tonight, New York bureau chief Scott Gurvey begins a four-part series, "The Future of Television," looking at the technology of tomorrow, today and yesterday.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Once upon a time, there were in the United States three commercial television networks, plus PBS. We watched what the networks wanted us to watch, when they wanted us to watch it. Today, television -- video entertainment may be a more descriptive term -- is everywhere. It's on our computers; it's on our phones. We carry it with us; we buy it in a store. The broadcast networks must compete for eyeballs and they're losing. TV viewership peaked in 1983, when 105 million people watched the final episode of the CBS comedy "MASH."
According to the Nielsen Company, average broadcast prime time viewership has fallen from 45 percent of households in 1985 to 28 percent in 2007. Next year, broadcasters face another challenge. On February 17, 2009, virtually all TV stations across the nation are scheduled to turn off their analog transmitters. That will leave broadcast television a digital affair. Viewers with sets that receive only analog over-the-air signals must buy a converter box. The boxes are expected to cost about $60 and arrive in stores in March. The government is offering two $40 rebate coupons per household. You can also hook up an analog TV to a wired or satellite provider or buy a new digital TV.
SHELLY PALMER, AUTHOR, "TELEVISION DISRUPTED": The transition from analog to digital is going to devastate in a way that I don't think many people appreciate.
GURVEY: Shelly Palmer has written a book titled "Television Disrupted." He worries the switchover will mean fewer viewers for over- the-air broadcasters.
PALMER: All of those sets cease to work. So operators will have the ability to give you basic cable in analog. They want you to switch to digital. But if you don't want to, you may only be getting broadcast television, not any of the basic-tier cable. No one knows how that's going to play out.
GURVEY: Nielsen says 13.5 million households currently have nothing but broadcast over-the-air television. That's 12 percent of all households and does not include homes with over-the-air analog sets in secondary locations. That's a lot of homes where there will be less viewing of traditional TV. But the broadcaster's loss is a gain for consumers, who now have greater choice and control and it's a gain for scores of businesses which supply services and content for the new technologies. Mike Vitelli, senior VP for consumer electronics giant Best Buy, says the digital conversion means increased sales of new TV sets. Best Buy also plans to be a big supplier of converter boxes.
MICHAEL VITELLI, SR. VP & GENERAL MGR., BEST BUY: we want to make sure that everyone of those households that have an over-the-air antenna, that they're getting analog signals over the air, that they get a converter box and make sure that their set is going to be ready to receive the new digital signals.
GURVEY: Broadcasters lost the ability to dictate the consumer's viewing schedule years ago when the first home video recorder hit the market. Today, the Slingbox can record your home television and play it back to you anywhere you have a computer and an Internet connection. Jason Hirschhorn is president of Sling Media's Entertainment Group.
JASON HIRSCHHORN, PRESIDENT, SLING MEDIA ENTERTAINMENT GROUP: What that means is that you know prime time or day parts or all those things we use to talk about in terms of ratings, those are at any time, anyplace, anywhere. And it's a pretty exciting time. It's really about access on your terms.
GURVEY: The new technologies have also been a boon for non-traditional distributors of television. Shawn Strickland of Verizon manages his company's push into fiber optic video services.
SHAWN STRICKLAND, VP VIDEO SOLUTIONS, VERIZON: The actual primary intent of the FIOs (ph) network was to serve up a better broadband experience. But we quickly realized that there was an opportunity to be in the TV business once we'd built the network. And that the world was shifting, consumers were sifting toward wanting bundles. And so that really was the impetuous that drove us into the television business.
GURVEY: So for every company that might want to get out of the television business, there appear to be many more that want to get in. The new technologies have destroyed the wall that used to separate the content producers from content consumers. We'll take a look at the new opportunities that has created tomorrow. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
