It's open season on the television industry's business model. In recent years, the three pillars of the industry's profits -- advertising, regional programming and syndication deals -- have come under fire from a band of technology companies, including Sling Media, TiVo, Orb Networks and Apple Computer, that are rewriting the content distribution rules. As Wharton legal studies and business ethics professor Kevin Werbach notes, TV won't necessarily be viewed via TV anymore.
"Over the next decade, the idea of video content being limited to a single time and device will become quaint," says Werbach. "Broadcasting, as we know it, is an artifact of historical limitations on distribution, which are increasingly irrelevant in the digital broadband age." The only real question for Werbach is how quickly the transition will occur as technology shifts the place and time that television is viewed.
Other experts at Wharton agree with Werbach's thesis. Dan Hunter, legal studies and business ethics professor, sees television as a slow growth industry that will struggle to capture Internet-savvy generations now spending more time with web sites like MySpace than with their remote controls. Nelson Gayton, a Wharton adjunct professor who studies media and entertainment, suggests that technology will forever redefine viewing habits. Kendall Whitehouse, senior director of information technology at Wharton, acknowledges that media giants such as CBS, Disney's ABC and General Electric's NBC will have to change, but says that the TV giants seem to be willing to adapt to new technologies. "The TV industry realizes that the recording industry didn't handle the digital era well, so it's very aware of the dangers and the opportunities [of digital distribution]."
Indeed, the major television networks have cut deals to distribute shows for a small charge through Apple's iTunes or have launched on-demand viewing from Comcast or DirecTV Pay Per View.
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