Category: Television

The future of on-line television

If enough people start getting their TV online, it will drastically change the nature of the medium. Normally, the buzz for a show builds gradually; it takes a few weeks or even a whole season for a loyal viewership to lock in. But in a BitTorrented broadcast world, things are more volatile. Once a show becomes slightly popular – or once it has a handful of well-connected proselytizers – multiplier effects will take over, and it could become insanely popular overnight. The pass-around effect of blogs, email, and RSS creates a roving, instant audience for a hot show or segment. The whole concept of must-see TV changes from being something you stop and watch every Thursday to something you gotta check out right now, dude. Just click here.

What exactly would a next-generation broadcaster look like? The VCs at Union Square Ventures don’t know, though they’d love to invest in one. They suspect the network of the future will resemble Yahoo! or Amazon.com – an aggregator that finds shows, distributes them in P2P video torrents, and sells ads or subscriptions to its portal. The real value of the so-called BitTorrent broadcaster would be in highlighting the good stuff, much as the collaborative filtering of Amazon and TiVo helps people pick good material. Eric Garland, CEO of the P2P analysis firm BigChampagne, says, "the real work isn’t acquisition. It’s good, reliable filtering. We’ll have more video than we’ll know what to do with. A next-gen broadcaster will say, ‘Look, there are 2,500 shows out there, but here are the few that you’re really going to like.’ We’ll be willing to pay someone to hold back the tide."

And how is this for an application of the Alchian and Allen theorem?

"Blogs reduced the newspaper to the post. In TV, it’ll go from the network to the show," says Jeff Jarvis, president of the Internet strategy company Advance.net and founder of Entertainment Weekly. (Advance.net is owned by Advance Magazine Group, which also owns Wired‘s parent company, Condé Nast.) Burnham goes one step further. He thinks TV-viewing habits are becoming even more atomized. People won’t watch entire shows; they’ll just watch the parts they care about.

Read the whole thing, which focuses on how BitTorrent is revolutionizing the delivery of media and the enforceability of copyright.  Of course we are still waiting to hear where the revenue will come from…

Tivo Blues

I am on holiday in Canada.  Never having known anything different, the children are terribly confused and distraught to find that at Nana’s house their shows are not on whenever they want them to be on.

I use the opportunity to tell them about progress – when Daddy was little he had to get off the couch just to change the channel! – I refrain from further explaining that the CPI does not adequately account for improvements in the quality of life.  Tivo is great.    

Dog the Bounty Hunter

Check out Dog the Bounty Hunter, the latest reality-tv show on, believe it or not, A&E (Thursdays at 10/9C is the regular time-slot but it repeats often). As you know, I have a special interest in bounty hunters but the show is good entertainment. Surprisingly, it’s not just the chase that’s interesting but also the life-story of the arrestees and Dog and his family.

Monetary economics on Gilligan’s Island

Did the Castaways use paper money? Yes.

In early episodes, we see Mr. Howell hiring various services from other castaways. We eventually learn he’s been writing checks on a mainland (and therefore inaccessible) bank. This works while the group consider their condition temporary, but the checks are quickly devalued and eliminated when the castaways begin to prepare for the possibility of an indefinite stay on the island.

In Episode 9, “The Big Gold Strike,” Gilligan and Mr. Howell find a gold mine on the island, which Howell convinces Gilligan to keep secret from the others. By the time everyone learns about the mine, Howell has already taken the lion’s share of the most easily accessible gold. He’d like to hoard it for himself, but the other castaways begin charging him for their goods and services. Soon everyone has a small fortune in gold, which they all try to smuggle aboard a tiny escape raft. Their collected wealth, of course, ends up at the bottom of the lagoon.

In later episodes, monetary exchange takes place in US paper currency.

Might such fiat dollar exchange occur in the real world?

The market can reclaim money from government…This is why the castaways value Thurston Howell’s paper dollars: because whatever absurd amount he may have brought with him for “a three-hour tour,” that amount is now fixed. Dollars are the most stable currency available on Gilligan’s Island, and the government has nothing to do with it. Or rather: the absence of government has everything to do with it. If people are allowed to pick their own preferred money, they will pick whatever holds its value most reliably.

Here is the full analysis, courtesy of the Mises Institute.

My take: Fiat money would not survive on Gilligan’s Island, at least assuming that no rescue is expected. Skipper and Gilligan will return to barter, based on some useful island commodity, probably a storable foodstuff. Perhaps they will continue to use dollars as a medium of reckoning, for mutual convenience. But why accept dollars as a medium of payment? Given that only seven people live on the island, there is market power and room for dollar prices to slide over time. (To see one potential problem, imagine the polar case of only two traders — would you mind losing all your dollars? — surely prices would then fall in response.) Dollars would offer little stability of real value, if only because you might start to doubt whether other people would continue to accept them.

Is American television taking over the world?

No, quite simply:

European broadcasters are meeting their legal targets for showing European programs, according to European Commission figures… The research from the commission, the European Union’s executive authority, indicates that, on average, two-thirds of the programs shown on European television are made in Europe, which is safely above the 50% minimum level set by the European Union’s Television Without Frontiers directive [TC: how’s that for an oxymoron, a protectionist directive that speaks of doing away with frontiers?]. The figures for 2001 and 2002 cover the existing 15 European Union countries at that time — the EU expanded to 25 countries in May. The proportion of European programming broadcast was 66.9% in 2001 and 66.1% in 2002.

Here is the link.

People wish to share their movie stars with global audiences more than they feel the need to share their TV stars in the same way. Hollywood movies sometimes take up to eighty percent of those same European markets. In part the large movie screen offers more room for good special effects, an area where Hollywood has a near monopoly. But the biggest single factor is demographics. Moviegoing, a social event, is the province of the young. The young are the most peer-conscious group around, and that is why the cinema occasions such charges of cultural imperialism, while TV screens are filled with local content.

Oh Oprah!

Cover headline from “O, The Oprah Magazine” (June, 04):

The Wrinkle Report: Treatments that actually work (science finally does something good for women!)

What, anti-biotics weren’t enough? And what is Oprah saying about what women value? Reminds me of the Barbie that whined “Math is hard,” when you pulled the string out of her back.

I know, I know, Oprah is a saint but even saints ought to be questioned.

What TV ads do people wish to skip?

…Just over one-third of beer ads were skipped through by those taking part in the research, whereas 93% of fast food and credit card commercials were passed over by viewers fast forwarding through the breaks.

MindShare predicted that there would be an increase in the amount of live event television such as sport on TV channels in the future, because these are events that people would be more likely to watch at the actual time of transmission than record.

The company also suggested that broadcasters could start charging a premium for advertising in such events, and could even raise the price of their firstinbreak and last-in-break slots to reflect that more people tune out during the middle of an advertising break.

TV sponsorship was also under much less threat from skipping, said the research.

So how will the market evolve?

What seems clear is that the sectoral make-up of TV advertising is set to change dramatically, consolidating around a smaller number of key industries.

Other industries will increasingly use advertiser-funded content, product placement and sponsorship to get their messages across on TV, or switch to other media altogether.

Outdoor and retail media, being the other two mass media, are likely to benefit from the sectorspecific shift away from TV.

Here is the original article. Earlier Alex wrote on Queer Eye and the Future of Television. Thanks to Eloise, whose blog post put me on to this.

Free trade with Australia?

It is widely known that the United States and Australia have been working on a free trade treaty. It is less widely reported how the treaty would handle culture. The Australian government feels it has been taking an unpopular stance, and has been reluctant to publicize the likely outcome. So what might the treaty bring?

The proposed deal caps the amount of local [Australian] content at existing levels of 55 per cent on free-to-air commercial television and 25 per cent for commercial radio, and at 10 per cent on pay TV.

If the government reduces these content levels, they cannot be raised again.

The deal also prevents the government from regulating local content levels for new media without consulting the US, which can challenge any proposed changes.

McLeod’s Daughters actress Bridie Carter told the hearing that the agreement would trade away Australia’s cultural identity.

That’s 55 percent local content, Bridie, hardly the death of Australian culture. Why not just shut out American TV altogether? And what does 2004 hold for Bridie’s show McLeod’s Daughters?

Life on Drovers Run in 2004 offers new faces and unexpected surprises [sic], heartache and laughter, and for two-star-crossed lovers, a wedding.

How about this remark:

“The Free Trade Agreement … threatens to reduce what is left of the vibrant Australian voice to a mere whisper in the future.”

In reality Hollywood gives Australian directors and stars a world platform that they otherwise would not have. Peter Weir, Russell Crowe and Mel Gibson earn huge box office around the world.

Here is the full story.

By the way Pat Boone just issued a call for cultural censorship. When will it become clear that cultural protectionism is simply another attack on free speech?

Here is a recent article on the (slow) progress of U.S.-negotiated trade agreements around the world.

Why can’t you choose your cable channels?

I don’t ever watch Bravo but still I must pay for it:

In the dream world of some television viewers, they would pay their cable or satellite companies only for the channels they want. Some might not pay for MTV, because they don’t want their 8-year-olds watching it. Others would turn down ESPN Classic, because they’ve already seen the 1975 World Series. Others would eschew TeleFutura, because they don’t speak Spanish.

Reality is far different.

No U.S. cable or satellite company offers what are called “a la carte” plans. In order to get the Discovery Channel from Comcast Corp. cable company, for instance, Washington viewers have to pay for an “expanded basic” package that includes MTV, FX, MSNBC and 33 other channels.

Here is one relevant article.

Why are consumers forced to buy a bundle? Cable companies claim that choice would require expensive boxes, but few observers believe this claim.

More plausibly, price discrimination is at work. Consider a simple example with two individuals. John values Disney at $100 a year and FoxNews at $10 a year; Sally has the reverse valuations. Without bundling, the cable company will offer each channel for about $99, and sell a channel to each consumer, reaping $198 in revenue (N.B.: I am assuming that the cable company has a good idea of demand in general, although it cannot identify which consumer is willing to pay how much for what.)

In lieu of this set up, sell the bundle for $109 to each consumer, reaping a greater revenue of $218. The company makes greater profit.

More importantly, aggregate welfare is higher. In this case each consumer receives two channels instead of one.

Monopolies, regulated or otherwise, tend to bundle commodities when demands are scattered and the marginal cost of additional service is low. In this context, once the program is made, you can sell it cheaply to additional customers. So why not try to get the entire package into everyone’s hands?

You can spin your own numbers, with varying results, but the overall lesson is clear. While there is a general problem with monopoly in the cable market, bundling can make that problem better rather than worse. So don’t complain next time you have to “click-remote” through those Farsi and exercise channels.

Thanks to Curtis Melvin and Robert Saunders and James for relevant pointers. The ever-excellent Arnold Kling offers useful remarks on bundling as well.

The end of TV as we know it?

America’s 350 public TV stations have made a stunning proposal. They would like to give their analog broadcast licenses back to the government by 2006. While viewers would continue watching public TV via digital broadcasts, cable or satellite, public stations would save $36 million a year on electricity.

But our government says no:

The FCC requires TV licensees to simulcast both analog and digital signals at least through 2006, but transition booby-traps inserted in the 1997 Budget Act will stretch the process years beyond. They require that before analog signals are turned off in a market, 85 percent of local households have to be equipped with digital off-air reception capability. Arcane details make this mission impossible; even if every home received local broadcasts over cable, the 85 percent threshold would not be met under any likely scenario.

And why is the government wrong?

Allowing the TV band to be tied up for another decade ignores the enormous social value of spectrum. Wireless networks could productively use the frequencies to expand and improve cellular service, with added airspace dramatically decreasing costs. Entrepreneurs lust for access to the rich VHF and UHF frequencies to unleash mobile Internet-based applications offering consumers a cornucopia of fresh choices for voice, data, video and applications yet to be dreamed.

Read the full analysis by Tom Hazlett. And write your congressman to get rid of TV as we know it.

Make your TV a work of art

That’s right, put a digital copy of a masterpiece as a screensaver on your TV:

An expensive new digital television is big, beautiful, flat and can hang on the wall. Some might even consider the set a piece of art.

RGB Labs charges for subscriptions to images such as The Luncheon of the Boating Party by Pierre Auguste Renoir.

So why not display Picasso, Renoir, Monet and other masters on the screen itself?

Three companies have recently formed to help consumers do just that…

[One of them] Chandler’s company, Dream City, has acquired licensing rights to more than 1,000 pieces of art, including masterpieces from Cézanne, Van Gogh and Picasso. He sells them in $14.95, 30-piece collections as screensavers. A Web site offers step-by-step instructions on how to connect a PC to the TV and run a slide-show loop on your big screen.

The core idea came from Bill Gates:

Microsoft (MSFT) Chairman Bill Gates has displayed art on wall-mounted PC screens at his home for years. That’s where Chandler got the idea for Dream City.

He put a frame around a monitor hooked to an old PC, hung it on the wall and showed family photographs and art.

“At parties, people just stood there, mesmerized,” Chandler says. “I realized there was a business there.”

Here is the whole story, which includes a Renoir image on a big TV screen.

My take: The idea is a promising start, but I am repelled by the idea of copies of classic paintings in my living room. Looking at lower quality reproductions would depress me. It would also make me wonder why I cannot find anything more personal, more current, and more alive to enjoy. I am keener on the idea of art created especially for this medium, let’s hope that is forthcoming.

Addendum: Michael Giesbrecht writes: “You’re in luck, Tyler! Literally hundreds, if not thousands, of pieces of art, created especially for this medium, are taken to market each year, and have been for quite some time. Check out netflix.com. In the common vernacular, the medium is referred to as a “movie”. Many of them look great displayed on wall-mounted digital television screens.” You can put up a static image from these movies quite easily. I love Renoir but on my screen I want Blade Runner.

Children’s Television that I like too

Cyberchase is a PBS show for kids that teaches math. It’s designed for children 8-12 but my 5 year old loves it. I’m impressed too. My son picked up on the concept of negative numbers from one episode involving an elevator traveling from above ground to below ground. In another episode, the cyber-kids use backwards induction to save the world! The cyber-kids even figure out the value of having a medium of exchange. If you have kids, check it out.

I also recommend, Between the Lions, the hippest kids tv show I have ever seen. One episode featured the music of Charlie Parker, recurring bits are Dr. Ruth playing Dr. Wordheimer (she counsels words on how to blend together), Martha Reader and the Vowelles, Gawain’s Word and more.

Not as bad as it sounds

The U.N. convention on cultural diversity, championed by Canada and
France, would take cultural goods such as films, plays and music out of
the realm of trade negotiations. It would exempt them from free-trade
rules, allow governments to protect and support their cultural industries,
and enshrine the “cultural exception” that European nations have defended
in international law.

It amazes me how many “free speech advocates” have no qualms about restricting consumer choice in the cultural marketplace, which of course is another forum for speech and ideas.

That being said, this news is probably not as bad as it sounds. First, American cultural presence is losing ground when it comes to both television and movies, the two most sensitive cases. Most people want to see locally produced TV programs, which reflect their language and culture. American shows dominate the television market only in parts of the English-speaking world, such as Canada. In cinema, France has shown some ability to capture more than half of its home market, thanks to films such as Amelie. Even Quebec, a very small region, has produced some box-office winners (“The Barbarian Invasions”) as of late.

Quite simply, most of the rest of the world is becoming more entrepreneurial in its cultural production. New technologies, such as digital moviemaking and editing, will only accelerate this trend. So putting in quotas is addressing a dilemma that the marketplace is already solving.

Second, the importance of the quotas is often more symbolic than anything else. France, for instance, does not strictly enforce its quotas against foreign films in French theaters. Anyone who has visited Paris knows it is a wonderful place to see foreign movies of all kinds. The French, for all their noises about the cultural exception, are remarkably open to outside cultures; the musics of Algeria and Zaire have been centered in Paris for some time now. In part, granting the French a symbolic victory on trade policy makes it easier for them to be more open in the long run, and this is what I predict from the U.N. convention. What the French, and many others want, is the ability to win a symbolic victory, and then the ability to choose what they want in the marketplace.

Here is full link, and thanks to Eric Crampton and Michael Giesbrecht for the pointer.

Will Web TV destroy global culture?

Eli Noam is the pessimist, Richard Epstein is the optimist. I agree with Epstein, who notes:

…the use of internet technology also reduces the costs of various forms of global co-operation. The best path for content-savvy foreign producers is to enter into deals whereby they combine their content with the technical expertise that is more cheaply available from the high-tech American platforms. The distribution channels cannot tell American from Hungarian electrons, and if content from other nations has sufficient appeal, then no evident cost disadvantage should keep it from reaching the marketplace, so long as technical services can be freely bought and sold.

Noam is worried that the Internet might make it easier for American content to take over markets, thus limiting the scope for local programming. But American television programs are losing ground internationally. Increasingly American TV shows and movies are part of a broader menu of satellite programming, offering viewers a truly global choice. A 2001 Nielsen survey found that 71 percent of the top 10 programs in 60 countries were locally produced.

Here is the full exchange, my only complaint is that we don’t hear enough from Richard.

Digital TV in Berlin

Analog television is dead in Berlin. The German capital became the world’s first jurisdiction to go all-digital on the TV dial in August, when the last of its analog stations–along with viewers’ analog TV receivers–went dark. Contrary to the fears of regulators elsewhere, there have been no shrieks of outrage. The lessons for American policymakers: The paralysis that grips the digital TV transition in the United States can be overcome, and taking away analog TV is not political suicide.

Why is this a good thing?

Given a digital configuration, broadcasters could beam many times the number of analog stations currently on the dial.

And by taking a step beyond the “Berlin switch,” new wireless networks could be unleashed. The United States long ago set aside some 67 TV channels nationwide, but the great majority of them are unused. In fact, just seven TV stations broadcast in the average market. Going digital could open up this mother lode of leftover spectrum in the TV band to productive use.

Berlin just did the switch the drastic way, and families on welfare were given vouchers to purchase the new boxes. Regulators fear “stranding” 13 million TV sets in America, but a similar voucher plan would cost about $50 million in the United States, we are told.

For the full story, read Tom Hazlett on Slate.com.