What creature will succeed the couch potato?

With a major shift in TV-viewing habits on the horizon--thanks to TiVo, the video iPod and more--the industry is scrambling to figure out what's next.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
5 min read
LOS ANGELES--On the day after Christmas, a long-standard survey of people's television watching habits will take a first step into the digital present--and future.

For decades, the Nielsen Media Research audience measurement service has told networks and advertisers roughly how many people are watching, for example, ABC at 9 p.m. on a Wednesday. But as a growing number of people use TiVo or another service to record prime time shows for viewing later in the week or for watching on a laptop during a flight, the Nielsen ratings have gotten increasingly fuzzy.

In late December, Nielsen is finally taking one of several steps aimed at adapting to this new audience. Ratings will be broken out by how shows are watched--live, later in the day or within a seven-day period. Over time, Nielsen will also move to measure viewing that takes place via iPods, cell phones, laptops and other digital devices that are gaining TV privileges. The company also will track audiences for on-demand fare.

"I don't even try to figure out what's happening today. It's more important to try to figure out where we're going to be in 10 months, and then try to figure out how to get there."
--Steve Schwaid, senior VP, NBC Universal

The steps are a radical change for Nielsen, reflecting an overall paradigm shift that's shaking up the television world. The audience is taking control. And TV companies are scrambling to catch up.

"Viewers are tearing down the technological walls that once isolated their TV sets," Nielsen CEO Susan Whiting said Thursday at the Digital Entertainment and Media Expo here. "They represent formidable challenges, especially the younger generation, who are often more comfortable with change than their elders."

Indeed, what's increasingly evident in television's rush into the digital age is that the archetypal couch potato may be an endangered species. How companies react to this new kind of viewer, one who's increasingly as active as a video-game player, will recast the foundations of the media business over the next decade.

Executives at digital video recorder company TiVo have had a ringside seat as the change has unfolded, being able to track every click and button push of their customers' remote controls. What they've seen surprises even them. The average TiVo household clicks a button 350 times a day, and more than 70 percent of viewing involves skipping ads, said Chief Executive Officer Tom Rogers.

What that shows is convergence: not the traditional idea that a TV is becoming a computer, or vice versa, but that consumers' use of both is converging on an active engagement with content, he said.

"There has been a sense that the TV viewer is a leaning-back, passive person, and that the PC is a leaning-forward, active experience," Rogers said. "In fact, the TV viewer is increasingly active, not passive, about viewing."

Money flowing, but confusion reigns
Myriad technological means to feed this hunger for activity are now arising, and a few companies are well positioned to benefit substantially from the change in habits.

Despite staunch competition from cable and satellite TV companies that offer their own digital video recording services, TiVo remains at the forefront of the trend.

In the last several weeks alone, the company has announced that it is working with a number of businesses, including Intel, Sony and Apple Computer, that aim to bring recorded programs to portable devices and laptops. TiVo is now sharply focused on using its device's broadband connection to the Net to help viewers find and organize content from sources other than their TV, Rogers said.

With these barriers between the television and the broader Net falling fast, money is flowing into other companies, such as Brightcove and iSeeTV that allow video producers to distribute their work online, outside the confines of the traditional cable or network channels.

Predictably, that's leading to an explosion in the amount of content available, and video search companies such as Blinx and the America Online-owned Singingfish, as well as search giants Google and Yahoo, are hoping to help make sense of the maze of video.

The networks themselves are contributing to this explosion in content with the early development of multicasting services, which use digital signals to send four to six video streams through the space ordinarily dedicated to a single analog TV signal.

For television networks and producers, it's increasingly difficult to figure out what this means for their own work. Certainly the interest in media hasn't hurt. According to Nielsen, television watching is at its highest level since the organization started measuring decades ago, up more than 12 percent from 10 years ago.

But with audiences less and less attached to schedules, or even to the television itself as a necessary viewing device, even TV giants worry about maintaining their traditional relationship with their audience. At this conference, and at those like it, much talk is devoted to how to build a brand that can cross media, and that's no longer confined to a certain slot in a TV guide.

ABC's experience with the shows "Lost" and "Desperate Housewives," which helped revitalize the network, are looked at as a powerful model, particularly since parent company Disney's release of the shows to Apple's iTunes store for download to computers and to the video iPod. But for all their experimentation with different platforms, ABC executives are adamant that the TV is still the hub of their content universe.

"At the moment, the primary platform, the driver of content, is the TV," said Anne Sweeney, president of the Disney-ABC Television Group. "Watching something on a computer is very different than sitting comfortably on the couch at 9 o'clock."

The industry is in a deeply experimental mode as programming finds its way to cell phones, PDAs and laptops, and as shows encounter increasingly professional competition from online sources. It will take years before it's clear how real, mainstream consumers enter the world of the active viewer, and whether that will match the patterns of today's early adopters.

That uncertainly has left the TV industry in a state of creative confusion, realizing that it's in the midst of perhaps the biggest change since cable networks began laying cable, and not knowing what, exactly, the future will actually look like.

"I don't even try to figure out what's happening today," NBC Universal Senior Vice President Steve Schwaid said. "Let the operations guy do that. It's more important to try to figure out where we're going to be in 10 months, and then try to figure out how to get there."