Digital Conference

The TV Experience Is Finally About to Catch Up to Technology

... For Better or Worse for the Industry

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The march of digital progress has been uneven so far, delivering consumers quickly from clamshell cellphones to Apple and Android smartphones, but leaving us stuck with the same old cable remote control and TV experience. That's about to change, for better or worse for TV's big powers, said Rich Greenfield, managing director-media and technology analyst, BTIG, during a conversation at the Ad Age Digital Conference on Tuesday.

TV programming will increasingly be accessed through devices like Apple TV or perhaps a similar machine from Amazon, rumored to be coming this week. But that will put your favorite shows right next to apps from Angry Birds to Skype, reshaping the way viewers consider TV and intensifying the competition for your attention.

"As you unbox the cable box and allow other devices to become the TV experience, you're going to get much better consumer experiences," Mr. Greenfield said. "On the flip side of that, TV is just an app."

That in turn will complicate the development of younger generations into the kind of expensive pay-TV subscribers their parents still are. "Those cord-nevers just don't evolve into traditional TV payers who are paying $75 a month," he said.

But that doesn't promise collapse for today's Big TV. "I do think you're going to see TV companies figure out how to offer smaller, cheaper subscriptions," Mr. Greenfield said.

Rich Greenfield
Rich Greenfield

It also means that projects to deliver pay-TV over the web -- so-called over-the-top services -- can't assume that their customers will want something that looks just like current, bloated TV packages. The challenge is getting the price point down without destroying the existing ecosystem. "How do we get a package that serves 21-year-olds who graduated from college and say $75 a month ... just doesn't make sense?" Mr. Greenfield asked.

Another disruptive technology, Aereo, actually benefits TV broadcasters more than they've admitted, because it helps more people watch broadcast TV without a cable subscription -- i.e., without "The Walking Dead" or ESPN beckoning from just up the program grid. "For a broadcast network, Aereo is the best thing that ever happened from an advertising perspective," Mr. Greenfield said.

Broadcasters hate Aereo anyway because it will undermine their leverage with cable and satellite companies when it's time to negotiate retransmission fees to carry their signals. That fight comes to head this month when the Supreme Court will hear the broadcasters' challenge to Aereo's legality.

Regardless of the outcome there, all this technological change will continue to put pressure on the decades-long standard model of TV advertising, according to Mr. Greenfield. Ad-skipping will require a lighter ad load per hour on TV, if commercials are going to have any hope of being tolerated, he suggested. But ads conceived as content to thrive online, conversely, can and should grow longer he said, citing Pepsi Max's popular videos starring Nascar driver Jeff Gordon as a good example.