The Future of Television in a Multi-Channel World: With New Technology Allowing 500 Channels to Be Brought into the Home, Can the Networks Survive?

Article excerpt

CABLE OPERATORS and their high priests of hardware promise the viewer's moving finger a positive plethora of programming, an Aladdin's cave of interactive pleasure, but consider the following. Psychologist George A. Miller conducted a series of experiments in the 1950s. In them, he demonstrated that, when individuals are confronted with a large number of options, they tend to reduce those options to the number they can deal with effectively. He found that number to be "seven, plus or minus two." Today, the average television viewer has 35 channels to choose from. Guess how many he or she watches with any degree of regularity. The number is seven, and it was seven back in 1985, when the selection was limited to 25 channels.

For all the excitement and popularity of the home-video revolution, the average time spent watching prerecorded material for a family that owns a VCR actually has declined for every year it has been measured. Today, prerecorded material comprises less than five percent of that family's total viewing. The new 500-channel toyland will bring the video store into the home, but Hollywood isn't making more and more features, just as television networks aren't making more and more sitcoms. There is a limit to the ability to generate creative product.

Georges Pompidou once observed in singularly French fashion: "There are three roads to ruin--women, gambling and technicians. The most pleasant is with women, the quickest is with gambling, but the surest is with technicians." This is not a politically correct view, but a prescient one.

Technology alone is not the enemy, but the cable monopolists have used it brilliantly and found a way to charge their audiences for its use! The new technologies--direct broadcast satellite (DBS), digital compression, and fiber optics--have sprung up on top of, not in conjunction with, the old media. Think of television as a giant pyramid. At the base is broadcasting, then cable, and at the peak are newer and newer technologies designed to capitalize on the lifetime of work at the pyramid's base.

These new technologies boast of more and more choices, but in reality have found a brilliant way to place a dollar value on endless repetition. It isn't creativity that drives this process, because the new technologies offer precious little original programming. It is old wine in a bright new bottle. Furthermore, the captains of coaxial have found a way to charge more for the bottle than for the vintage wine inside.

There is a way to combat this trend. If the new interactive world were a free market in the most fundamental, egalitarian way, the viewer would be offered an a la carte menu, and only the channels selected would be paid for. Viewers could pick and pay for the six, seven, or eight channels they truly wanted and used, instead of leaving it up to the cable operators to make deals with each other. After all, why should CNN, MTV, or USA, with demonstrably small audiences compared to television networks, be able to generate comparable profits?

If the audience were not forced to pay for channels no one watches, there would be two immediate consequences. First, money would be allocated based on true marketplace demand for those channels people actually watch, and second, the survival of the programming base necessary to achieve critical mass would be guaranteed. Without that, in the artificial economics of today's monopolistic cable systems, original programming is in serious jeopardy, as the product is diluted.

Americans are very good at being dazzled by the promise of the new, and not very good at preserving the best of the old. Technology should not be their master. It should be their servant.

My rule for the brave new world of 500 channels is a simple bad news/good news reaction. The bad news: The more channels there are, the less there is on them. The good news: The more channels there are, the more value for networks' creativity. …