When Rich Becker plans what to watch on TV for the evening, he does it differently than most Americans. Rather than pawing through TV Guide or tuning into a listings channel, Becker surfs his iTunes software program on his computer and downloads the content he wants to watch onto his Apple (AAPL) iPhone. He then hooks the phone up to his TV set via a $10 cable he bought, and voilà, he and his family are watching customized content without any cable or satellite dish fees.Becker says smart phones, such as the iPhone and Google's (GOOG) Droid, are in essence portable content providers. "That's the future," says Becker, president at Copywrite Ink, a Las Vegas-based communications firm. Consumers will have one portable device that plugs in to any device, anywhere, allowing viewers to watch content whenever, wherever they wish.
The hold up isn't so much the technology currently available to us as much as it is developing a new stream of distribution, Becker says. "You have to decide what that distribution model going to be." Content could arrive via mass aggregators such as cable or direct to consumers via each broadcast channel, through services such as Hulu.com, which provides content for Fox and NBC. Another option is third party applications, the distribution channel familiar to iPhone users.
Convergence Still Has A Long Way To Go
This process -- the convergence of Internet and television -- has a long way to go before it becomes reality. Given the increasing number of companies offering alternative means to access content and an already staggering assortment of content providers, it will likely take years before a standard distribution method is adopted.
Long waits for technological shake-outs aren't unusual, of course. It took more than a decade to sort out whether VHS or Betamax would be the standard in videotape. More recently, it took two years for Sony's (SNE) Blu-ray Disc to win out over Toshiba's HD DVD to become the standard for high-definition viewing.
Then, of course, is the most important question. Even once technological hurdles are settled, how does the marriage of television and the internet benefit consumers? Some experts argue viewers will be the winners. Newly available devices and software, such as digital converter boxes and Boxee, already make it possible for enterprising viewers to watch content that would otherwise require a cable or satellite dish subscription.
Consumers Will Need to Embrace New Programming
Others, such as Hyun-Yeul Lee, assistant professor of communication at Boston University, believe consumers are destined to lose, even though its appears they have much to gain. "We're going into an era where everything is turf war," she says, similar to one currently being fought with mobile devices. As a group, Lee says, consumers stand to benefit least from the convergence.
A prime example, she says, is the recently announced joint venture between General Electric (GE) and Comcast (CMCSK) that will give the nation's largest cable company eventual control of NBC Universal, which produces movies and TV and sports programming. The agreement would turn Comcast into both a provider and distributor of news and entertainment, raising questions about whether content shown on channels not owned by Comcast would be broadcast with equal quality, a concern shared by the Department of Justice, which is examining the deal.
Even absent such controversies, getting consumers to embrace new ways of viewing programs will require education, Becker says. Consumers will line up behind whichever distribution model is adopted. Beyond learning new ways to access content, the sheer amount of it threatens to isolate viewers, he says.
In the days before hundreds of cable channels were available, viewers watched a handful stations and were exposed to a variety of programming, informing their world view. Today, however, with so much content available from so many places and only so much time to spend watching it, Becker says, consumers are more likely to end up "picking fewer things and being exposed to fewer new things than ever before."
Take the first steps to building your portfolio.View Course »