When HBO landed on the scene in the 1970s, it unwittingly pioneered consumers to subscribe to premium TV programming over copper cable wires. That was unheard of back then. Of course, it is now the norm when we sign up for cable TV. We expect to be presented with several packages, including deluxe networks such as ESPN, HBO or Showtime that require an additional fare. However, a new business model is emerging.
It's no secret that consumers in droves are tuning out ads using TiVo or DVRs. This is forcing the networks to try all kinds of new distribution models. Of course, in some cases these accompany ad-supported, on-demand full streaming of shows. Though the various models differ, they share some things in common.
For starters, pretty much all the networks are now letting people own ad-free programming forever by selling it over the web. In addition, they're peddling content on an a la carte or a subscription basis, whether it be on Google Video or Apple iTunes. Last, but not least, they're using these same platforms to tease out ad-free portions of shows for free using podcasts. Notice how many times I said "ad-free."
As the technology gets more sophisticated and the generation that grew up with the internet, iPods and always-on connections become adults, a day is coming when a lot of TV content will be paid for a la carte and consumed ad-free.
Now, some content will always remain free and ad-supported. However, in the future -- as technology progresses -- you will have to pay for the best programming or enhanced versions of it, even if it's carried by ABC, NBC, Fox or CBS. These shows will be sold a la carte, as subscriptions or in packages and they will all be delivered over the internet protocol. Once purchased, you will be able to watch these shows on any number of portable devices/phones, a computer or on your internet-connected HDTV.
So what happens to all those advertising dollars? Easy. It's used to create branded entertainment to compete with shows from the pros. A la carte TV will flatten the playing field.