In Depth

The Future Has Already Arrived

Despite New Models, Modes of Viewing, It Will Always Be ‘TV’

Looking back at past decades, the television industry has undergone amazing changes.

Looking ahead, television is poised to evolve even more thanks to a myriad of factors, including alternate technologies, new models for advertising and ratings, time-shifting and mobility.

“TV will simply be the word we use, but it won’t be television by true definition of that word,” said Neil Goldberg, chief operating officer of the Internet video-on-demand company Akimbo. “Perhaps one cable with all of those services will still connect to the monitor. The underlying business models [ad-supported networks, subscription channels such as HBO] will all remain intact, though more choices and possibly a la carte pricing for additional services will appear.”

That future is already here in some ways, like high-definition TV. “People brag and compare TV set-ups now like they would cars. Size matters, high-def plasma screens, surround-sound speakers,” said Jon Steinlauf, senior VP of advertising sales for Scripps Networks, which owns HGTV, Fine Living, DIY Network, Food Network and GAC. “Over a quarter of the country is geared up for high definition, and HD transforms the living rooms of America from a 26-inch set with 480 lines of resolution to 50-inch televisions, flat panels and people signing up for HD services in droves. Distribution is flying off the shelves for HD.”

While the film industry struggles to find ways to bring people into theaters, TV viewers are gorging on emerging digital networks, in particular the proliferation of HD outlets.

“Cable operators are calling us to say, ‘We want your HD service, what do we have to do?’” Mr. Steinlauf said. “They want Food Network in HD because it’s beautiful. When people think of HD, the first thing they think of is football. But there are so many other formats of TV. Not shows like ‘Grey’s Anatomy’ with a lot of sets, but when you’re doing a home improvement show, it’s so much easier for the audience to see the color, the design, the process. In Food, the richness of the colors and the cooking processes, everything pops. What ESPN has been for men watching sports, we play a similar role for women watching our shows.”

The connection between home TV and personal computers also will change in the future, becoming more integrated into everyday life. “People will view all of their content, programs and data from large monitors that are easily and wirelessly connected to hard drives, PCs, telephones and Internet,” Mr. Goldberg said.

“The Internet is the second screen beyond the real screen,” Mr. Steinlauf said. “People will move over to the Internet to get more video experience from a series. We can show another hour of what happened in a 22-minute episode on the air. That’s a powerful proposition to a viewer; we can give you more in-depth information on a project. The television programmer and the Web content people sit together now more than ever to figure out what we can do to capture some of the excitement from the television side onto the Net.”

The future will include other innovations beyond the Internet. “We are working on technology that will become a part of society over the next decade,” Mr. Goldberg said. “Things like voice-activated remote controls, storage and content in a cloud (or out of your home). Full flexibility and portability across all platforms will occur effortlessly. When you walk into your home, your Web pages, e-mail, calendars and content will automatically sync. More importantly, due to all of the efficiencies and other technology being created today, there will be a significant saving on energy,” Mr. Goldberg said.

For the TV industry, changes in advertising and metrics will be substantive. According to Mr. Steinlauf, the shift to rating commercial minutes in the TV business has already irrevocably altered the future. “When the industry changed its currency last summer to commercial ratings, that was a watershed event in TV history,” he said. Where advertisers once paid for the 27 million viewers watching “American Idol” at $500,000 a minute, with 17 minutes of commercials and 43 minutes of entertainment, now a compromise has been reached to satisfy both the producers and the advertisers.

“It was resolved with what is called C3, a compromise currency. The methodology change was rushed into the market, but it’s the best solution in terms of what the clients wanted and what the marketplace can handle. Nielsen is working out the kinks,” Mr. Steinlauf said.

Ratings—in some form—will continue to drive television because of economics. “Each of the major cable networks will have a large audience in nonlinear options, anything from a DVR to on-demand channels to full-length shows streaming on Web sites,” Mr. Steinlauf said. “I think that the linear channels will still be driving all that. Hit programs will still originate on linear channels and then be spread around on some of these options and grow audiences. So total audience to a successful television series may be larger in 10 years than it is today because it will be available conveniently in other formats.”

Advertising will need to become more clever in the future to keep viewers engaged. “It is inevitable that there’ll be more product integration, but I also think we’ll see more targeted, smart advertising and long-form that people will actually opt in to see,” Mr. Goldberg said. “It’s starting to evolve to this anyway. Advertisers want to reach those consumers who are most receptive to their messages, and future TV will accommodate them in new and inventive ways.”

“Advertising in television will be as dominant in 10 years as it is today relative to other media. TV is getting so much better. Aside from switching to C3 ratings, the other major change in television is high definition,” Mr. Steinlauf said.

So, what will TV look like in 2018 and beyond? “We’ve been creating hybrid content, which is content that mimics the program that the viewer is watching, but integrates advertising in an organic way and usually takes the form of a 30- or 60-second segment,” Mr. Steinlauf said. “That’s a big area for the future. When you look 10 to 15 years into the future, look at the commercial breaks as content that’s staying within the context of the viewing experience. Commercial ratings and high definition have really given the TV industry a shot in the arm, so I’m bullish about the future.”