The Future of Digital Television

by William Crawford

I was an early adopter of Digital Video Recorders. Two years ago I bought a 30 hour, Panasonic branded ReplayTV from an online bulk buying company that has long since departed. Between the incentives offered by the dot-com retailed and by Replay itself they almost paid me to take the thing off their hands.

As a result, I don't think I've watched more than a handful of commercials since the summer of 2000, and my life has improved as a result. I can watch an hour of TV in 40 minutes, without having the experience broken up by advertising. Of course, in doing so I'm rejecting the implicit contract between myself and the TV providers, but it's only an implicit contract and I'm not really under any obligation to watch the ads. And since I'm just one person, it's not like my opting out is going to make any difference. Millions of people doing just what I'm doing will, and barring government intervention the TV business model of the 20th century is dead.

However, all is not lost for Viacom, Time Warner and the rest. The ReplayTV has actually increased my direct spending on television. Without it, I'd probably just carry the basic cable package, and that only because I need the infrastructure for my home office broadband connection anyway. I just don't have the time or flexibility to set up my life around TV schedules. Premium channels would just be a waste of money, since the intersection of when HBO is showing something that I want to see and when I have time to sit in front of the television is vanishingly small.

Instead, I have the extended cable package and recently added six channels worth of HBO for an extra six or seven dollars a month. This would have made no sense before, but with the ReplayTV I can sit down for five minutes every few days and scout ahead on the interesting channels (or even do it from a web browser) and have it record whatever I might want to see. I can then watch them, or not, as time and inclination allows.

The biggest victim of DVRs might turn out to be the video rental industry. Since combining HBO and Replay, I have rented far fewer movies. The new technological mix isn't quite video on demand, but it's quite close. It's one of those technological compromises that so often sits between current practice and the grand vision of the future, a clever way to push existing infrastructure ahead.

So I pay for my cable and time shift the programming, skipping past the advertisements as I go. Since I have the capability to skip the ads, I'm going to do so, but I wouldn't be averse to a different method of television funding, since widespread DVR use will make the current system untenable.

The UK model is very interesting: a fee of around $185 a year, per household, entitles you to own as many TV sets as you'd like. That fee goes to support, among other things, the BBC. But I do see problems here. Broadcast TV can be a powerful force for social and personal improvement, even if most of it is junk. If a TV fee prevents even a few children from watching PBS then society has probably lost on the deal, although it could simply be argued that TV fees are a highly regressive tax (they are) and leave it at that.

Instead, I'd be more inclined to pay for cable television on a per-channel basis. There are only a few that I actually watch, and even at HBO rates I'd end up paying about the same as I do now for the smaller subset of channels; more than worthwhile if commercials are reduced. I suspect this will happen anyway, as broadcasters or basic cable channels are forced to launch premium versions of their current channels. The free versions will become increasingly intrusive, probably with text crawls on the bottom of the screen at all times and advertising embedded in the programs themselves.

Broadcast flags, such as the one proposed by Hollywood via the FCC, may be the worst of all possible solutions. These flags, embedded in digital cable or broadcasts, would instruct hardware to disable the fast forward button, or even to prevent recording and time-shifting at all, effectively turning new technology into old technology. It's possible, again, that cable companies will offer an additional service to disable the broadcast flag for those willing to pay an extra fee. Providing this back door, however, would undermine the MPAA's position that allowing any digital copies at all out the door would open the way for widespread piracy. I would think that the thriving DVD market and the slow retreat from Macrovision copy protection would belie those claims anyway, but as computers get faster and bandwidth becomes more ubiquitous anything is possible.

Whatever the ultimate resolution is (and there will be one) it's up to the market to decide what it will be. The current situation for consumers with DVRs is a border phenomenon. Individual consumers can take advantage of the turmoil, but not forever.

Where is digital media leading us?