Smoked Signal

As television leaps into the digital storm, will the blizzard lead to a blackout?

On paper, at least (although many of you aren't even reading this on paper), February 17, 2009 should mark a distinct milestone in the digital revolution. On the day the FCC requires television broadcasters to turn off their analog signals and move exclusively to digital transmissions, the defining medium of the last half of the 20th century will join a technological transformation that has disrupted the music industry, shaken newspapers, redefined retail and shopping patterns and fundamentally changed our media habits.

This should be a big deal, shouldn't it? When the biggest and best financed media kahuna finally leaves waveforms behind, isn't that the great tipping point, the moment we move decisively from the analog age of broadcasting to the digital future of personalized, mashable media or multi-cast, interactive programming? Well, maybe not so much.

For most Americans, and even for the TV industry generally, 2/17/09 will be a feint in the long, thoroughly unpredictable reorientation to digital that has taken decades to show its true impact in other platforms. Unlike the great political upheavals, the digital revolution is a protracted affair; there are no emperors to depose and no Bastilles to storm.

After the introduction of the compact disc in the mid-'80s, it took almost 20 years for all the elements of digitization in music to assemble and undermine the industry. It took a decade after the emergence of broadband for search and social networking to evolve as the new engines of media distribution. And major fiefdoms in the media nation remain decidedly, stubbornly analog. In going digital, television is unlikely to follow any set schedule or pattern for digitization, except that it will join the other platforms in entering an abyss of unpredictable change that likely will occur over the next decade in fits and starts. And it will start with a jerk.


What will February 17, 2009 look like? "A world of grief and angst is about to be unleashed," argues Shelly Palmer, managing director, Advanced Media Ventures

Group, and the author of Television Disrupted. The FCC and the industry have so poorly explained to consumers what exactly the end of analog TV means that many industry experts foresee a painful interregnum of confusion.

In fact, the switchover does not affect cable and satellite customers - more than 75 percent of Americans - who will continue to get service the same way they always have. But others don't know whether they need to buy new TV sets, or even whether any change on their part is required. The simplest medium has suddenly become complex, Palmer says: "I used to just turn on the TV, and now I have to do what?"

Plus, the 15 to 20 million over-the-air (OTA) TV customers who will need an analog-to-digital converter box to receive the new digital signals may not be aware of the transition at all. Only 48 percent of consumers know a change is coming, a CTAM (Cable & Telecommunications Association for Marketing) Pulse survey found. Even the U.S. General Accounting Office criticized the FCC in December, saying it lacked a clear plan to guide the industry and consumers. It's true that a $697 million digital TV (DTV) education plan rolls out this year from the National Association of Broadcasters, and the FCC did launch a voucher program that gives OTA users $40 vouchers toward buying the necessary converter boxes. But analyst Paul Kagan, CEO, PK Worldmedia, says, "This change is FEMA, squared. They are making people look at the back of the set instead of the front."

For a short while advertisers and media companies might lose some of the people focused on the front of the set: It's estimated that 15 to 25 million households still get their TV via rabbit ears. As much as 20 percent of an audience that naturally over-indexes for OTA network viewing could get shoved off the media grid in 2009 until they figure out what is going on.

"I worry about that a lot," Kagan says. "As an advertiser, if you told me 20 percent of my population would be intermittent for some period, I would want make goods to the moon."

Worse, this is a consumer disruption that, for the time being, adds no new features to people's TV experience: No snazzy return path for buying QVC items, no HD resolution they didn't already have. After all the fuss and confusion, "there is zero consumer impact, only a negative impact for the business: Viewers will go missing," Palmer says.

Inner Tube

As with every digital platform that has preceded the TV switchover, the ultimate benefits and formats for a DTV future are entirely unknown. History showed with both music and the Web that digitization is a long and iterative process, one that generates unanticipated killer applications only over time, through trial and error. The digital music revolution started in the mid-'80s as a plus for the industry, when CDs helped the labels resell an entire back catalog of music in a new format and under higher pricing. But the industry grasped digitization's true and drastic consequences only when CDs met the Internet and music-sharing.

"The dramatic shift is in the network," says Andrew Keen, author of The Cult of the Amateur and host of the online video interview series AfterTV. "I associate analog with one-to-many, whereas digital is where TV goes onto the Internet and becomes many-to-many."

In the living room, this meeting of movable, digital media with an ultra-high-speed network for swapping and stealing is a long way off, however, and we may never see the analog-to-digital revolution have the same impact on video it had on music. "The TV and film guys haven't been hit with their perfect storm yet," Keen says. "But they will."

Other key hallmarks of digitization - expanded choice, on-demand time-shifting, and interactivity - also are not slam dunks for DTV. "No one has embraced video-on-demand as much as cable had hoped," says Leo Kivijarv, vice president of PQMedia. DVRs have fractional penetration and use. Early attempts to meld the Internet and television, even Apple TV, have generally failed, and most viewers still graze a limited range of channels on the programmer's schedule. Our perception of a population hungry for on-demand, niche content being served by a digitized mediaverse of limitless choice may be skewed, Kivijarv argues.

"The people on Madison Avenue are hanging out with other people on Madison Avenue who have TiVO and VOD," he says. "The consumer has been very resistant to transitioning to an all-encompassing television screen as some expected."

Television is also unique in that it is the first truly social media platform that presents some natural barriers to interactivity. The '90s ITV marketers' fantasy of clicking on and purchasing Jennifer Aniston's blouse during a Friends episode becomes technically feasible in DTV but socially unacceptable.

"It comes down to issues of physical geography," says Mike Bloxham, director of insight and research at Ball State University's Center for Media Design. Not everyone wants to stop the comedy to buy Aniston's top or switch camera angles during the game. Bloxham watched DTV systems in the United Kingdom fumble through various models, and it became clear to him that interactivity is a very personal activity that quickly undermines the social dynamic of the living room. Soon enough, "you will have people bludgeoning each other with the remote control," he says.

Of course, TV's analog-to-digital switchover will also be shaped by history, context and the parallel evolution of other technologies. DTV is coming of age in an environment not lacking for interactive back channels, i.e. the second and third screens of Web and mobile. To avoid the carnage of rock 'em, sock 'em remotes, we may see big screen programming interactivity offloaded to these more personal devices. That Jetsons age of converged TV and pc may never take place on the first screen because there is no urgency for a robust return path; the other screens handle it better.

The Killers

Unlike the other two screens, TV does not move into the digital realm needing a killer app. It already is one.

"We are talking about a medium that is a legal narcotic," Kagan says. Our love affair with the defining medium of the last century continues in this millennium; time spent with the first screen continues to increase. Americans now watch 466.5 billion hours of television a year, according to magna Global. Not even consumer confusion over the switchover or increasing pressure on TV industry business models will kill that.

Even without any change in programming, DTV does provide a critical tipping point for programmers and advertisers by putting almost all the major platforms onto a digital infrastructure. On other media this has delivered a new level of audience understanding to marketers.

"It starts to get really interesting once we use the data from end-to-end systems that potentially changes how we do what we do," says Brian Wieser, senior vice president, director industry analysis, magna Global.

Putting all television on the same technological infrastructure as the Internet and mobile inevitably transforms media buying. Even if the TV experience remains predominantly passive and little changed in front of the screen, the DTV platform behind the screen aligns with and even accelerates trends from its digitized predecessors. Planners will be able to buy off of set-top box data, giving them the kind of precision in audience measurement they get online.

Combining the massive scale of DTV with this new infrastructure makes pipe dreams of the Web world economically feasible, such as addressable advertising and dynamic versioning of creative for discrete target audiences. And if digitization in other media has meant increased fragmentation, that's only a good thing for a TV screen that is being challenged by interactivity elsewhere. Media consumption tends to increase as programming and advertising reach more targeted niche tastes. Just as search introduced hundreds of thousands of new media buyers to the market, so could DTV.

"The best promise digital has to offer is it allows for platforms upon which more radical change can happen," Wieser says.

Nick at Nightmare

So while the back end of DTV has an obvious path towards more targetable, measurable messaging, the future of the TV experience itself on a digital platform is as uncertain as the Nielsen overnights. TV is going digital after the Web, and music and mobile set the bar high for choice and interactivity. Gen-Xers and Millennials will bring to TV expectations of greater participation or get easily distracted by the other screens.

A decade of experience with digital TV in the UK has shown that viewers get most interactive with social content, such as reality shows, game shows and sports, where voting and user input is organic. But for drama and comedy, "I don't think there will be more interactivity," says Ken August, vice chairman and U.S. media and entertainment leader, Deloitte & Touche. "That is not in our DNA."

The real consequence of expanded choice will be a habit August has observed in teens for a decade: grazing on "TV tapas." Young viewers spend five minutes each with a range of five or six trusted brands, which may ultimately include user-generated material, like a set-top YouTube. TV of the future may be less about intense interactivity than about creating destinations like Nick, Disney, TVLand or VH1, where audiences can land at any time and get what they expect.

"It is about creating branded editorial voices that will separate the things people go to from the limitless stuff that is available," August says.

That "stuff" could well become limitless, which is exactly what the TV industry needs, like it or not, in a multi-screen world. The move away from analog allows for nano-niche programming and experimentation with unique formats that satisfy audiences raised on the Web. Five- and 10-minute pods of content become possible when you're trying to satisfy grazers. Dedicated CSI or Law & Order channels are feasible, as is pulling short-form content from the Web onto the big screen. Surfing or grazing may well be replaced by "matrixing" - running multiple channels in several windows on our big-screen HDTVs.

What kind of nightmare scenario does that model pose for media planning and ad measurement? Todd Krieger, senior vice president, Denuo, assures us we shouldn't worry, as do most media planners.

"More choice is good. Digital and technical abilities provide a further hedge and bolster an eroding TV business that is under siege," Krieger says. "Digital may allow you to shake up the models a little."

As if more shake-up is what the industry needs. But after the sturm und drang of an inevitably messy analog-to-digital switchover, and after the unpredictable outcome of the current writers' strike, which threatens to send audiences elsewhere, TV may need all the hedges it can grow.

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