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From...
Industry Standard

TV-Web convergence: Now? Ever?

graphic

January 29, 1999
Web posted at: 1:29 p.m. EST (1829 GMT)

by James Ledbetter

NEW ORLEANS (IDG) -- Trying to learn the state of convergence at a convention of TV executives is like trying to learn about the afterlife from a group of religious zealots: You can't see it, no one can tell you what it's going to look like or when it's going to happen, but everyone says we'd better get ready for it.

Nearly a month before the National Association of Television Program Executives (NATPE) convention began this week, Microsoft's WebTV bought signs atop dozens of taxicabs for about $75 per cab per month throughout New Orleans. It even went so far as to buy space on the taxi receipts that TV producers and programmers would inevitably take home for their expense accounts.

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That 1999 is the first year Internet and computer companies have had a substantial presence at NATPE is compelling. Almost every panel featured some discussion of Web-television convergence, but it's unclear whether convergence currently is much more than a clever promotional hook for Microsoft.

No one doubts that the technology exists to combine television and computers in powerful and transforming ways. And some such marriage is almost inevitable. Beyond that, the details are elusive.

For example: What's the business model for the Internet-TV hybrid of the future? Will it be advertising-supported (like broadcast television), subscriber-supported (like cable), or e-commerce-supported (like some of the Web)? But many executives speculated on this nebulous future.

Halsey Minor, chairman and CEO of CNET, was blunt. "You've been covering this for a while, you know the way we operate is: First you build the businesses, then you build the business model."

He was only half-joking. "You don't know what the business model is until you know what the consumer wants," Minor elaborated. He predicted that the successful Internet-TV companies would be those who could prove that they attract lots of eyeballs, and then "the more eyeballs, the more advertising you get."

And it's possible that the power of e-commerce will transform television's business models as well. Tom Rogers, president of NBC's cable and business development, noted that unlike networks, "local stations are truly in the business of selling things," like cars and other retail products, and that they therefore "are going to have an easier time making the transition to e-commerce." Minor maintained that different revenue streams will emerge as broadband technology becomes more widespread; he included video-on-demand and the "tsunami" of music purchases that he predicted will come through MP3.

But more traditional broadcast advocates insist that fully converged television will crush and co-opt the Internet. "When this conversion happens," predicted Bud Paxson of Paxson Communications, "[given] the traction a CNN has, the traction a CNBC has, the Yahoos are not going to be there. You're going to have to have brands."

Another unanswered question concerns ownership of content. For the last several years, network TV has faced a crisis, as independent production studios have demanded more money to continue providing hit shows. Some stations have gone so far as to sell entire blocks of time including ad space to production studios. As a result, networks have pushed harder to own and control their own content (one factor behind the expansion of network-owned newsmagazines into every weeknight of prime time). By contrast, most Web companies perceived as successful some e-commerce sites, portals and search engines are aggregators of content that comes from someone else.

And, speaking of content, what exactly will all those eyeballs be watching? Will the converged "hit shows" of the future look more like today's TV shows, more like today's Web sites or more like some hybrid we have yet to see?

At NATPE, many seemed to believe that an answer to that question would begin to emerge this year. Mark Bunzel, a general manager at PriceWaterhouse Coopers, predicted that the best merged content will come from the large TV networks, which will use the Web to supplement informational shows, including sports and talk shows.

Some of that, of course, is already occurring. Patricia Vance, head of ABC Internet Group, for example, pointed to promotional information on Oprah.com, and predicted that more than a million people would go to Oscar.com this year on the night and day after the Academy Awards. Simultaneous Webcasts are beginning to subtly affect the content of some television programs; former New York City Mayor Ed Koch boasted to The Standard that his viewers are encouraged to vote on cases in The People's Court, with results posted during the same episode. That kind of symbiotic interactivity is, most executives agreed, a model for what convergence will look like.

But one vital aspect of television that is strikingly clear at a convention like NATPE is that the most profitable programs the E.R.s and the Seinfelds are fictional narratives. To date, that has not been the Web's strongest suit. Bunzel, for one, believes that successful narrative is unlikely to develop there any time soon, in part because narrative is not a great platform for e-commerce.

"I'm not one of these people who thinks: You're watching a show, and you tap on the female star's sweater, and it takes you to some place where you can buy it. That's technology in search of a solution," said Bunzel.

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