Commentary

Past Media Timelines Suggest Streaming VOD To Surpass Linear TV In 5 Years

It’s been said that those who ignore the past are doomed to repeat it. This week, in  “New Challenges Chip Away at Cable’s Pillar of Profit,”The New York Times’ David Carr opined that cable and satellite distributors' strategy of bundling television programming is facing multiple challenges. He cites the Aereo case now before The Supreme Court, Netflix’s forceful letter to investors (meant for regulators) against the Comcast purchase of Time Warner Cable, HBO’s decision to sell some archival programming to Amazon Prime streaming service, and a Millward Brown report that screen time on phones has now surpassed screen time on home televisions.

This got me thinking about the accelerating speed of change in the way media consumers adapt to new mass communication models. Based on the sources cited at the end of this piece, we can see that the timelines for mass adoption of various new forms of communication over the past two centuries have become shorter and shorter. For the purpose of fair comparison, I’ve begun timelines based on the year when infrastructure for mass communication was reasonably in place to a point when an estimated 70% or more of U.S. households had access:

The Telegraph: Samuel Morse developed Morse Code and built the first telegraph system in the U.S. between Washington and Baltimore in 1848 with Congress’s financial help. By 1863 Western Union had finished its transcontinental telegraph line and by 1866, its network included about 100,000 miles of wire and its capital stock value was in excess of $40 million (1). Total timeline: 18 years.(Please note, the medium was developed around local central telegraph offices rather than connected to homes, as were other examples below).

The Telephone: Alexander Graham Bell won the first U.S. patent for his device in 1876 (though earlier inventions in Italy and France preceded it), and by 1880 almost 49,000 U.S. phones were in use. In 1948, the 30 millionth telephone (1) was connected in the United States, accounting for about 71% of U.S. Homes (2). Total timeline: 68 years.

Radio: In 1897, Marconi received the first British patent for radio, which at first was a wireless telegraph system. The technology for radio was developed through the First World War, after which (1919) Marconi’s resources were sold to GE, and the Radio Corporation of America (RCA) was born (1). By 1939, nearly 80% of the United States population owned a radio. Total timeline: 30 years.

Television: 8,000 U.S. households had television sets in 1946, and 56.5 million (1) or around 70% of U.S. Households had them by 1958 (3). Total timeline: 12 years.

The Internet: Though the ARPANET first functioned among a small group of computers as early as 1969, the development of IP (Internet Protocol – late 1970s), a domain name service (1984), the World Wide Web (1991) and browser (Mosaic in 1993) allowed for 150 million users worldwide -- almost half in the U.S., or 71% of homes -- to be connected by 1999. (1)  Total timeline: eight years.

For traditional TV (television) to transform from a linear, ad-supported mass medium that encourages ad avoidance on a single, in-home platform into T/V (Television/Video) -- a two-way medium that everyone can access wired or unwired, across all kinds of personal, portable and/or shared platforms, on-demand at any time of day -- may not be the slow-moving evolution that many expect. Carr’s Times piece takes a snapshot of a few weeks in the life of this evolution/revolution. If you look at other major mass media timelines, it seems to me that the infrastructure is now in place to reasonably suggest that no later than five years from now, the traditional ad-supported business model will be a shell of its former self.  Digital, on-demand, interactive, non-linear T/V that reports viewability, where advertising is programmatically and directly purchased across many viewing platforms, will be here in a big way very soon.

You may question whether TV and T/V are just two faces of the same medium. If so, please consider that the telegraph was improved to be wireless and became à radio, which was improved to be visual, and became à TV. The Internet was born at the same time that TV had begun to explore two-way interactivity through cable connections. The bold new idea then emerged: the convergence of broadband Internet delivery and interactivity with à the news, information and entertainment power of television. And here we stand at the edge of another leap forward.

Sources:

(1) Elon University School of Communications, Imagining The Internet, A History and Forecast 2000-2014

(2)  US Census Bureau Demographic Trends in the 20th Century, 2002

(3) TVB TV Basics - a report on the growth and scope of television, updated June 2012

1 comment about "Past Media Timelines Suggest Streaming VOD To Surpass Linear TV In 5 Years".
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  1. Jim Obrien from Aveco, April 30, 2014 at 3:44 p.m.

    The Millward Brown study is referenced out of context. Smart phone use includes simply looking at email... also sms and chat. This should not be confused with watching television. And btw most people at home are watching television while they have their smartphones on, thus the peaking of twitter references to TV shows. This is stunted where TV is tightly controlled (e.g. China.) It should be noted TV viewing continues to increase, not decrease - see Neilsen report that TV viewing is at an all-time high, and that viewership is increasing in every demographic except 12-17 year olds through Q4 2013.

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