As the long-dreaded switch to digital television finally takes place, several competitors are waiting in the wings, eager to take a bite out of the pie that has so long been dominated by broadcast TV. While many consumers will make the switch, this could also be the step that shifts the paradigm from standard television to alternate methods of entertainment.
Several new media -- including cable, satellite TV, the internet, and even cell phone TV -- are poised to take huge chunks of broadcast's market share. With advertising rates already falling on traditional television, it is worth taking a moment to consider what could happen if broadcast TV no longer dominated advertising in America.
One big change would be political. In the movie Bulworth, the title character melts down during a news interview, rapping out a startlingly effective explanation of why politicians are often morally compromised:
I got a simple question that I'd like to ask of this network
[. . .] How come they got the airwaves? They're the people's, aren't they?
Wouldn't they be worth 70 billion to the public today
If some money-grubbing Congress didn't give them away for big campaign money?
[. . .]You've been taught in this country
There is speech that is free
But free don't get you no spots on TV.
If you want to have senators not on the take
Then give them free air time
They won't have to fake.
While it's reductive to blame all political corruption on the high price of television advertising, it is also worth noting that politicians who wish to run successful re-election campaigns have to raise thousands of dollars every day that they're in office; most of this money goes to paying for high-priced television ads.
Of course, the largest campaign contributors tend to be lobbyists for groups that are seeking either government assistance or reduced government regulation. It's hardly accidental that the government often ends up passing laws that are endorsed -- or even written -- by these companies.
To give an inkling of the ultimate effect of this trend, it's worth noticing that, between 1998 and 2006, the top lobbying expenditures in the country were in support of the finance, insurance, and real estate industries. Strangely enough, the government also passed legislation that allowed all three of these businesses to grow massively. In at least two cases, this has had devastating results.
As digital television replaces broadcast TV, it's becoming clear just how valuable those airwaves are. According to some reports, this has already netted $19.6 billion -- a startling sum, even if it's not quite Bulworth's $70 billion.
Perhaps more important, the digital TV transfer is beginning to show just how much power broadcast television once wielded. As television networks now find themselves crowded together much more closely, they are beginning to come into competition with a cellular network that is about to explode. In fact, FLO TV spent $558 million to buy channel 55, which it will use to broadcast television shows directly to cell phones.
For that matter, cable TV is also poised to enjoy a windfall as millions of television viewers are foregoing the annoyance of digital boxes and antennas. Between the long lead-in to the crossover and the dire predictions about digital television, cable just seems a lot easier.
Added to this, some cable companies have taken advantage of the confusion to hard-sell consumers on new cable signups.
As if all of this wasn't enough, many consumers are now getting their TV programming off Hulu or similar services. The growing popularity of the internet as a channel for entertainment and news also bodes well for politicians looking to circumvent the traditional television media.
A few years ago, Howard Dean's failed internet campaign was considered evidence that the web was not yet as powerful as traditional television. However, with TV undergoing a major shift, it remains to be seen if HDTV could offer a death-knell for the old money chain of lobbyist-politician-broadcast ad. One can only hope.