Internet: the Future of Television?

by

Daphne Soegijono

Professor Paul Bielecki

Film and Video
(355:201:D8)
12/10/09
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In 1884, Paul Gottlieb Nipkow, a German university student, invented a scanning disk,

which is a spinning disk with holes drilled in it that allows the display of “moving” images. This

is the start of the developments of television (TV). TV sets were first developed in the 1930s. At

first, “the display (TV screen) had a small motor with a spinning disc and a neon lamp, which

worked together to give a blurry reddish-orange picture about half the size of a business card”

(Genova). In the 1950s, color TV and remote control were introduced, and television quickly

gained popularity. In the past decade, the TV industry has been trying to perfect Plasma TV and

HDTV. TV has gone a long way, from the business card-sized screen to the 37-42 inch TV sets

that is widespread now; from monochromatic to high-definition colored TV; from offering three

channels to 200 that is offered by cable networks today. Television has become such a significant

part of our lives that we see it everywhere, and it has become one of the public’s main sources—

if not the main source—for news or entertainment. It is estimated that more than one billion

television sets have been sold worldwide. Watching television is the most common leisure

activity. According to a survey, in 2008, each person spends about 3 hours a day watching

television.

It’s not only the media that’s changing; the way we consume the different types of media

is also changing. Music used to be listened to through the radio, or by buying cassettes or CDs.

Photographs have to be processed from their films. Now, everything is digitized, because it is

easier and cheaper to maintain digital files. The television industry has recently moved to all

digital broadcasting. We can buy mp3 music online, downloaded straight to our computers

without having to have the physical CD. Digital cameras have taken over; instead of processing

pictures, we can just download the images to our computers and share them through many social

networking or photo sharing sites. Media players in today’s world are capable of storing and
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delivering all types of media instead of just one. From TV, the Internet, cell-phones, and iPods,

people are “splicing their time among myriad media choices, channels, and platforms” (Berman

1). So why do we need all these devices if one can do the things that the others do? This seems to

be the trend in today’s technology advances, the merging of all media. The question becomes:

which of these devices will survive and which will be reduced to names in the history of media?

Will television remain as the most popular form of media? Cell phones and iPods (or other mp3

players) might have the ability to play TV contents, but they are more popular for their

portability—something that is definitely not what we’d think of traditional TV sets. The Internet,

and our computers, is a lot closer to television; and it has the biggest chance of replacing TV sets

as our main media platform. Is the Internet going to be the future of mass media? Or will TV sets

and the Internet converge into on-demand, interactive, digital TV?

The Internet is a global system of interconnected computer networks that use the Internet

Protocol Suite (TCP/IP) to facilitate data transmission. It is filled with all kinds of data and

information about anything there is to know in the world, and it can be accessed by anyone from

anywhere in the world, at any time. Users are able to share information from their computers to

other users in the network. Internet visionaries started their invention in the 1960s. Over the past

few decades, the Internet has been “developed to facilitate the efficient exchange of articles, data

and other scholarly information between peers in the world of academia” (Currah 443). The

invention of the Internet was intended for educational purposes. “The early Internet was used by

computer experts, engineers, scientists, and librarians. There was nothing friendly about it”

(Howe). In just over 40 years, the Internet has greatly expanded into a user-friendly medium,

which is used for education, entertainment, communication, and even businesses. Faster Internet,
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wider availability range, and broader array of services have made the Internet a substantial part

of visual media and culture.

Compared to television, the Internet is fairly new to the scene. Like television, the

Internet managed to become a vital part of society, but it has done so in a much shorter time

period. The numerous selection of services provided by the Internet greatly contributes to its fast

growth. While television can only give us information supplied by television broadcasts, the

Internet has information in many different forms. Television and the Internet are the two biggest

platforms of today’s visual media. Both industries are competing in their developments to stay

ahead of the other. Some people believe that the Internet, as the most popular form of interactive

media, will be able to replace television as the biggest media platform in the near future. Bruce

M. Owen has previously analyzed the effects that the Internet and television have on each other.

Through his book “The Internet Challenge to Television,” he states, “the Internet is the first

potential substitute for broadcast television as an in-home entertainment delivery medium since

the rental video-cassette” (8). The possibility of the Internet becoming the primary form of media

will be the main focus of this research.

Another side of this discussion about TV’s future says that instead of the Internet taking

over, it will converge with television into one form of media that satisfies more customers’

demands. Although television has been the most dominant force in visual media, it will never

stop evolving. Understanding that the Internet is quickly making its way into people’s lives, the

television industry incorporates the Internet to their services. Seeing how consumers prefer on-

demand and interactive media, they have made television sets and developed television programs

that are more user-interactive. Be it for making more profit or satisfying customers, the television

industry cannot afford to slow down in their developments because if you don’t stay ahead of the
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customers, they will leave you behind, especially in this technologically advanced era. “The end

of television as we know it” is a study done by the IBM Business Consulting Services, which

focuses on the convergence of television and the Internet. They believe that the way we watch

television, and what we expect from television, is changing, but it is not to be overshadowed by

the Internet.

Owen wrote his book at the beginning of the rise of the Internet, right before it exploded

into the force that it is today. The Internet has changed significantly since this book was written.

For example, when the book was written, only “[l]ess than half of American households own a

computer, and at this writing only 15 percent have access to the Internet” (Owen 12) and most of

them only used e-mail services for work. Now, an estimated 25% of the Earth’s population

regularly accesses the Internet (Internet), using a far wider range of web applications. Without

anticipating the rapid growth of the Internet, Owen believes that the Internet can pose a challenge

to television. Thus, the advancements made in the past decade further supports the idea that the

Internet threats the existence television. In looking at the years ahead for both industries, we

have to consider three important areas of research: advertisements, the market, and Internet

services such as peer-to-peer (P2P) file sharing and video streaming. This analysis will hopefully

clarify what the future holds for both television and the Internet.

First, we evaluate the Internet services that allow users to obtain TV contents. With the

improvements made in the past few years, the Internet is now capable of broadcasting television

programs. One of the ways the Internet is stealing TV services is through video streaming. Just a

few years ago online video streaming would not have been a convenient service; but after the

introduction of broadband Internet, we are able to watch high-quality videos on the Internet

almost instantly. This service is called IPTV, which is a convergence between the Internet and
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television. IPTV is “the use of an IP broadband network to deliver quality TV content.

Consumers may begin receiving quality TV directly over the Internet” (Berman 7). The fastest

growing IPTV in the United States is Hulu. Users “don’t have to pay anything, download a

special player or even register. In exchange for watching relatively brief ads, you get access to

complete high-resolution episodes of top TV series” (Collins). Websites like Hulu allows users

to control what they want to watch, when they want it, even what advertisements they want to

see, completely free of charge. Instead of having to sit in front of the TV at a scheduled time,

Hulu users can set their own time to watch their favorite TV shows to fit their daily schedule.

They can also set their own pace because they are able to pause, rewind, or fast-forward the

videos they are watching. Hulu now draws more than 40 million visitors a month, and in October

about five billion minutes of full episodes and short video clips were viewed. However, Jason

Kilar, Hulu’s chief executive, says, “the television set has a very healthy future, I absolutely

never see that going away” (qtd. in Collins). Hulu was not intended to be the substitute of

television; it was meant to be just another option for TV viewers.

Even though it is carried through the Internet bandwidth, IPTV broadcasts television

programs. So in order for it to function, IPTV still needs the TV industry and its broadcasting

system. But, if the general public prefers the playback control and interactivity to television in its

passive form, IPTV will be able to eliminate television sets. “Triple Play” by Francisco J. Hens

and Jose M. Caballero explains converging networks, which includes IPTV. The authors explain

why IPTV is not (yet) suitable to replace television service. “First, the Internet basically is a best

effort network that cannot permanently guarantee the delivery of television with an appropriate

quality of service. Second, there is not enough bandwidth for standard or high definition TV.

Third, there are some protocols and multicasting methodologies that are not supported” (Hens
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53). The Internet offers a limited amount of the TV service, with restricted quality. Looking at

how both industries are developing, it is unlikely that the Internet, or IPTV, will be able to fully

replace television, even with the Internet’s upper hand in interactivity and on-demand videos.

The video quality of IPTV is significantly lower than it is on TV, especially with the new

HDTV. High quality video on the Internet also requires a very large amount of bandwidth that is

not yet available. Unreliable Internet connection and limited bandwidth will interrupt the

delivery of the video. IPTV is a great new concept for watching TV, but the technology that is

currently available does not provide enough support for it to be better than regular television.

Sharon Marie Ross investigates how the Internet’s development has altered how

television is made and consumed. Her book “Beyond the Box: Television and the Internet”

provides a better understanding of what it means to watch television in an era of profound

technological change. In her book, Ross states, “changes in distribution of TV programs have

included a shift in viewers’ expectations about how and when they can access stories, with the

primary thematic being convenience: viewers want TV on their own terms – when they want it,

where they want it” (221). Hulu provides this anytime, anywhere form of media to its users,

while traditional TV still dictates what, where, and when their programs are to be watched. As

mentioned above, IPTV is a big challenge to television, especially when the time comes when

the Internet’s technology supports it. The television industry doesn’t just sit back and watch the

Internet grow and wait for it to take customers away. Responding to customers’ demands, the

television industry also provides on-demand video for their customers. Cable services also

provide user interactivity and Internet access through their machines. Recordings of TV shows

through VCR or other devices let users watch their favorite shows when they want it. Users are

also able to fast-forward through commercial breaks. This can be regarded as a convergence
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between the Internet and TV, where TV is incorporating one of IPTV’s advantages to their

devices. For the time being, this type of convergence is more likely to succeed than IPTV.

Internet users are also able to download episodes of television programs and movies

through P2P file sharing. P2P file sharing is a system where users from around the world

contribute to the global sharing system. Instead of having a central server that holds all the files,

P2P file sharing uses the users’ storage available to other users, so other people can download

files directly from a person’s disk storage. Even without subscription to television services, the

public is able to watch their favorite television shows by downloading them through P2P file

sharing. The advantages of P2P file sharing includes being able to download and keep your

favorite shows, being able to watch them at any time, and avoiding commercial breaks. P2P

eliminates the need to house data in centralized servers, which saves on storage space and costs.

P2P also facilitates faster downloading and exchange of files, which benefits users. Therefore,

for some people, it is more convenient to use only their computers to acquire services of both the

Internet and television.

P2P file sharing became popular in 1999, when Napster was released; it allows users to

share copyrighted mp3 music files without permission. Napster only lasted 2 years, forced to

shut down by the recording industry due to copyright infringements. But it is far from the end for

P2P file sharing. In fact, it was just the beginning. “The average number of users worldwide on

P2P networks has steadily increased, from 4.32 million in September 2003 to 6.78 million in

September 2004 to 9.28 million in September 2005” (Currah 444). The release of BitTorrent in

2001 helps the advancement of P2P file sharing. If Napster focused on mp3 music files,

BitTorrent distributes larger amounts of data, offering a wide variety of TV shows and movies.

In February 2009, BitTorrent is estimated to contribute 27-55% of all Internet traffic. In his
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research, Currah found that “at least 2 billion Hollywood films are acquired over P2P networks

each year worldwide. And this figure is growing” (444). P2P is preferred because it is

completely free. Moreover, the files downloaded are saved in the users’ computers; they can

access the TV shows or movies whenever they want, even when they don’t have Internet

connection. P2P file sharing consumes a large part of the total Internet bandwidth, showing the

large number of people using this service, around the world.

TV networks and studios claim that P2P file sharing has restrained them from gaining

maximum profits because a significant amount of people are downloading their favorite shows

instead of watching them on TV. This “poses a direct and unprecedented threat to [the

industry’s] economic reproduction” (Currah 445). Having said that, studies have shown that

those who use P2P file sharing instead of watching TV are mostly people who do not have

access to the shows that they want to watch. Therefore, it does not directly affect the number of

people watching TV. TV shows and movies that are distributed around P2P networks are

copyrighted materials, owned by studios. Users of these networks are sharing these materials

illegally. “Studios have endeavored to criminalize file sharing and so deter consumers from

participating in P2P networks … by filing lawsuits against the providers of file sharing software

and against consumers who are believed to be providing large amounts on a P2P network”

(Currah 445). A large amount of people has abandoned this service to avoid any legal problems

(even though the chance that it would happen to individual users is very low), even though it

cannot be compared to the number of people who still use it. Currah later explains that “despite

these efforts, file sharing activity continues to blossom; and moreover, computer programmers

are now seeking to build anonymous ‘dark nets’—P2P networks that are completely impregnable

to either regulatory surveillance or intervention.” P2P networks are very likely to grow. Even
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though there are many people against it, there are more who stands by it. Nevertheless, as

mentioned above, most of the users are not able to watch the shows on TV; so even if they

eliminate P2P file sharing, it would not increase the number of TV viewers.

The Internet services available today bring more options to the public in watching TV.

However, they do not seem to pose a big threat to the existence of television itself. A

convergence between the two is more likely than the Internet taking over. But, we should not

conclude our research prematurely. We should look at the forces behind the cameras that keep

the TV industry running. Advertising plays a big role in the television industry, because they are

the primary source for the funding of television networks. As Owen states, “[t]he extent of the

television industry could never be greater than the supply of advertising dollars” (6). Companies

and organizations buy television advertisement spots, most commonly 30-second spots, and what

they spend are used by the networks to fund their broadcasting services. Advertisers look for ad

spots during which the TV show has the most viewers, usually during prime time and special

programming like the Super Bowl. During those times, because of a higher rate of demand for

advertisements, the price to place ads goes up, and TV networks try to maximize the advertising

time in each programming. In today’s television programming, an hour-long TV show only runs

for 42 minutes, while a 30-minute show only has 22 minutes of programming. The rest of the

time, which is roughly 30% of the total time, is filled by advertisements.

With the rise of the Internet, advertisers also try to sell their products through online

marketing. The advantage of using online advertising is that the content is not limited by

geography or time. Anyone who has access to the Internet can view the advertisement anywhere,

anytime, whereas TV ads have to be seen right there and then. Watching TV is often a

“background activity” as people have their TV on while doing other things, not necessarily
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paying attention to the TV. Using the Internet requires a back and forth interaction between the

machine and the user, which makes Internet users more engaged to their activity than TV

watchers. Consequently, online advertising has a better ability to get the message across.

TV ads come in one form: video messages. In contrary, online advertisements come in

many different forms, such as banners, pop-ups, and click-throughs. This challenges advertisers

to be more creative and attract more customers. Even for video commercials like those on TV,

Internet advertisements can be more appealing to customers. Ross explains, “those commercials,

because you’ve filled out surveys, are designed specifically for you – for your age group, for

your income. There are items that you might buy – that you can click on and buy” (223). When

TV viewers are interested in the items that are advertised, chances are they would stay in front of

the TV and watch the rest of the program, possibly forgetting about their interests. Online

advertising, on the other hand, allows users to click directly on the advertisement and buy the

products without leaving their chairs. This advantage of online advertising appeals to both

customers and advertisers.

Compared to last year, this year’s TV ad revenue declines 15%. But that doesn’t

necessarily mean that advertising through the Internet is growing. Despite all the Internet hype,

online advertising has never really taken off. TV is a passive mode of mass media; therefore

what’s on TV is pushed to its viewers. This is why advertising works well on TV: whether they

want it or not, viewers have to watch a certain amount of advertisements. “Television exists to

sell audiences to advertisers” (Owen 32). The Internet, on the other hand, requires interactivity

from its users; they choose the information they want to obtain when they want it. And people do

not browse the web looking for advertisements. For the most part, advertisement banners, pop-

ups, or click through annoy Internet users that people try to block or ignore advertisements. Even
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though online advertisements are everywhere, major companies tend to stick with traditional

advertising, through print ads on magazines and newspaper or TV ads, because they are proven

to be more successful. Even though the drop in advertising is causing problems to the TV

industry, it is not caused by the growth of the Internet.

Through our analysis of IPTV, P2P, and advertisements, it seems that television still has

the upper hand over the Internet. Convergence of the two forms of mass media is more likely

than the Internet being a replacement for television. In spite of that, we will not be able to

correctly determine the future of television without examining us, the customers. This is what

this last part of the research is about: the market. The market is the most important aspect of an

industry because the industry wouldn’t exist without its market. Having a larger market is very

important in competing to be the bigger media outlet. This study of the market focuses on which

groups of people watch TV, use the Internet, or do both. The number of people in each group

determines which activity is preferred, and determines which will be the number one choice in

the future. The primary source for the statistics of television and Internet users is the Nielsen

ratings. Nielsen ratings are audience measurement systems developed by Nielsen Media

Research. The ratings determine the size of the audience of the United States’ television

programming. The method used by Nielsen has become the primary source of audience

measurement information in the television industry around the world.

TV consumers can be divided into two groups: the lean back consumers and the lean

forward consumers. The lean back consumers are “generally content with their traditional TV

experiences and uninspired to change viewing habits drastically” (Berman 12). This type of

consumers watches their TV following the networks’ programming schedule. They prefer to sit

on their living room sofas in front of their traditional TV sets at the time when their favorite
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shows are on. In contrast, the lean forward consumers “seek more experiential interactive video

experiences, with heightened control of aggregation, content sources, space-shifting (choosing

where video content is viewed), time-shifting, user contribution of content device

interoperability” (Berman 12). They are the ones who watch preview of episodes online, need on

demand features, and watch TV on their own time. Even without the Internet, television is

heading towards what the lean forward consumers want. Today’s digital TV “is going to offer

consumers more choice and greater interactivity” (Berman 12), which might cause discomfort

for the lean back consumers. The television industry knows that if they do not offer choices and

interactivity, the lean forward consumers will abandon them for the Internet; and for the lean

back consumers, even though they might prefer their old, traditional TV, the industry knows that

they are unlikely to abandon their habit of watching TV. TV will innovate its devices and

services to accommodate the lean forward customers, while trying to not upset the lean back

customers too much.

Even though the number of television viewers is still increasing, it is nothing compared to

the growth of Internet users. According to a survey, 35% of adults have watched at least one

television program via the Internet, and this number is most likely to grow. But don’t expect

online streaming video to replace viewing via traditional TV sets anytime soon. It is noted that

most adults (94%) still prefer to watch television on their living room sets (Nielsen). Studies by

Nielsen shows that during 2nd Quarter 2009, the number of people who watch video online

increased their viewing by 46% compared to a year ago. In addition, the average American TV

consumption remains at an all-time high (141 hours per month) compared to the same time frame

last year. “Although we have seen the computer and mobile phone screens taking on a significant

role, their emergence has not been at the cost of TV viewership,” said Jim O’Hara, President,
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Media Product Leadership, The Nielsen Company. “The entire media universe is expanding so

consumers are choosing to add elements to their media experience, rather than to replace them.”

Instead of replacing television with the Internet, more and more people are using both together,

even at the same time. As of June 2009, this panel shows 57% of consumers with Internet access

at home watch TV and go online simultaneously at least once a month. On average these

consumers spend 2 hours, 39 minutes each month simultaneously using the Internet while also

watching TV. Their online experience at home is in front of the television almost a third of the

time. This shows that TV is not going anywhere, but it’s getting stronger.

The main part of this analysis is the number of people who use the Internet or watch TV,

and how much those numbers have grown, or shrunk, in the past few years. It is also important to

see the different groups of people contributing to those numbers and how likely it is that those

groups will change their preferences between TV and the Internet. When the Internet started to

grow, those who use the Internet and those who watch TV are two different groups of people.

People with higher education spends less time in front of their TV sets, while early Internet

adopters are those with college education or higher. As time goes by, Internet becomes easier to

access and use, and the different groups of TV or Internet users start to merge. “Younger

demographics aren’t using the Internet as much as older demographics, yet the growth rate of

kids 2-11 online clearly outpaces the overall Internet penetration. The number of kids online has

increased 18% compared to 10% growth for the total active Internet universe (P2+)” (Nielsen).

Online usage is relatively flat since last year, though more people are viewing video online than

ever before. Certain age groups also view online video more than others do—adults aged 18-24

watch more than 5 hrs each month, while adults over the age of 65watch just over 1 hour of

online video. Kids are exposed to both the Internet and television at a younger and younger age.
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In the future, it is very likely that more percentage of people will watch television through the

Internet, because the younger generations are used to it from an early age.

Change is inevitable, both to the Internet and the television industry. The Internet is

offering television contents with the addition of user interactivity and control. To be able to

survive, television networks have to be one step ahead of the trend. Digital TV offers

interactivity and choices, which is the industry’s way of holding back the Internet from taking

over. The number of people who watch TV is still climbing, and the amount of time spent in

front of the screens is not reducing either. With the fast growth of the Internet and its services, it

seems like we don’t need to have a television set anymore. Anything that is broadcasted on

television can be broadcasted through the Internet. The ability to watch shows whenever they

want, more control over video playback, and less advertisements—or none at all—are the key

components of why people prefer the Internet to television sets. However, TV sets, especially

HDTV, has a much higher quality than computer screens; and television broadcasts have much

higher definition than Internet broadcasts. Until there is a major breakthrough in the Internet

development that enables high quality television broadcasting to be available at a much lower

bandwidth, and computer screens have better resolution and definition than TV sets, television

will not be going anywhere.

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Works Cited

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future industry perspective.” IBM Business Consulting Services. 2006. Study.
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channel16-2008jun16,0,1733921.story>.
Currah, Andrew. “Hollywood versus the Internet: the media and entertainment industries in a
digital and networked economy.” Journal of Economic Geography 6 (2006): 439-468.
Print.
Genova, Tom. TV History. Web. 22 Oct. 2009. <http://www.tvhistory.tv>.

Hens, Francisco J. and Jose M. Caballero. Triple Play: Building the converged network for IP,

VoIP and IPTV. West Sussex, England: John Wiley & Sons Ltd., 2008. Print.

Howe, Walt. A Brief History of the Internet. The Internet Learning Center. Web. 24 Oct. 2009.

<http://www.walthowe.com/navnet/history.html>.

Internet Usage World Stats. Miniwatts Marketing Group. 2001. Web. 24 Oct. 2009.

<http://www.internetworldstats.com/>

Nielsen. The Nielsen Company. Web. 4 Nov. 2009. <http://en-us.nielsen.com/home>

Owen, Bruce M. The Internet Challenge to Television. Cambridge, Mass.: Harvard University
Press, 1999. Print.
Simpson, Wes, and Howard Greenfield. IPTV and Internet Video: Expanding the Reach of
Television Broadcasting. 2nd ed. Burlington, MA: Focal Press, 2009. Print.