The Webification of TV is happening

Rigid programming disaggregated into bite-sized chunks. Hypertextual pointers between content elements and between different media. Boundary-blurring. Interactivity. Digital graphics enhancing and transforming the live video experience.

The latest product from AOL, TiVo or Microsoft? A research project at the MIT Media Lab? WebTV founder Steve Perlman's hyper-stealth start-up Rearden Steel? None of the above. I'm describing what I saw last night on...television. You know, television? The old-fashioned, monolithic, radio-with-pictures TV that we've had for decades?

Admittedly, most of today's TV fare isn't worth watching (Fear Factor, anyone?). If you care about the evolution of the consumer Internet, though, you should watch what's happening to TV as a medium. Television programming provides a glimpse of the converged future. At the same time, it highlights the weaknesses of the broadcast model. In so doing, it poses the challenge that any true new media must answer.

The collapse of the dot-com bubble should have taught us the folly of focusing entirely on the technology-fueled new players in a market. Pundits and entrepreneurs once spoke dismissively about established companies. Now most realize that the greatest businesses impact of the Net will come as behemoths such as GE and Ford incorporate Internet technologies into their operations, saving billions and changing organizational structures.

Yet when it comes to media, new technologies still get the bulk of the attention. The April funding announcement from Rearden Steel provoked fevered guesses about the company's plans to transform home entertainment. Microsoft made headlines when it finally signed a customer, a Portuguese cable operator, for its interactive television platform. The TiVo and ReplayTV digital video recorders have consumed buckets of ink, despite scraping together barely 250,000 subscribers in two years.

No one seems to care about existing television programming. Yet Americans are still watching that programming, an average of seven hours per day in 98 percent of U.S. homes. And a funny thing is happening in this vast wasteland: It's becoming more and more Internet-like.

Like fish swimming in water, we spend so much time watching TV that we don't notice how much it has changed. Broadcast and cable television have become more graphically rich, more hypertextual and more real time, in large part due to the influence of the Web.

Need evidence? Flip over to "CNN Headline News." CNN is heralded as Ted Turner's masterstroke, but Turner's real revolution was "Headline News," CNN's kid brother. "Headline News" does away with the concept of programs. The whole network is one program with different subsections, repeated every half-hour. The basic structure stays the same, but the content is gradually updated throughout the day. Sounds a lot like a Web site!

And "Headline News" hasn't stood still. It has incorporated sophisticated news tickers and moving graphics, and added a refresher segment of top headlines and integrated pointers to upcoming stories throughout the broadcast. Now it's taking its boldest step yet. Starting Aug. 6, "Headline News" will shift to a format that fills almost half the screen with information such as news headlines, weather maps and stock tickers. "ESPNews" is making a similar shift, and it plans to keep running the scrolling news tickers even during commercials.

The Webification of TV is happening everywhere you look. At the end of shows, networks list upcoming programs, a sort of poor-man's hyperlink. Reality shows such as "Survivor" and "Who Wants to Be A Millionaire?" as well as Webcam-enhanced episodes of programs such as "The Drew Carey Show" incorporate live action, telephone calls and Web sites into multimedia events. If you watched the NBA basketball playoffs on NBC, from time to time you'd have seen shots of celebrities in the crowd, coincidentally including the stars of other NBC shows (conveniently identified with airtimes).

The sporting events themselves are high-tech extravaganzas: First-down lines magically appear on football fields, advertisements are edited in behind batters during baseball games, hockey pucks acquire glowing red tails, Superbowl instant replays feature effects straight out of "The Matrix," and race cars sprout moving info bubbles as they circle the track.

How did this happen? Digital technologies were supposed to supplant TV. Technology pundit George Gilder wrote a book called "Life After Television" way back in 1992. More recently, TiVo went so far as to run commercials for its digital video recorder showing network executives being thrown out of office windows, which didn't go over well with its investors, such as CBS, NBC, Liberty Media, Disney, Cox and Comcast.

But there's the rub. The major investors in TiVo and its erstwhile competitor, ReplayTV, included most of the other major players in traditional broadcast and cable TV. These companies have the most to lose in a post-television future, but also the most to gain if they can co-opt the new technologies.

As with e-business technologies more broadly, the greatest challenge for the established TV industry is to find a viable economic model in the age of the Internet. The economics of TV are heavily tied to interruptive advertising, which loses its value when people control what they watch and when they watch it. And that's why TV, like legions of dot-com start-ups, faces a fundamental business challenge it has not yet solved.

My own experience since I got a TiVo is typical of every other subscriber I've spoken with. To put it simply, I watch more TV now, but fewer commercials. Furthermore, I have no sense of when and on what channel a program originally aired. Take those usage patterns and extend them to tens of millions of homes--which will happen as the devices and services become more affordable--and broadcast industry economics no longer add up.

The Associated Press story about "Headline News" and "ESPNews" changing their formats included a wonderful quote that inadvertently makes the point. Kathy Haesele of Advanswers Media, a St. Louis media-buying firm, took issue with "ESPNews'" decision to continue running news headlines at the bottom of the screen even during commercials.

"Advertisers pay a lot of money for those commercials," she said. "I don't know why news should be distracting the viewer." Silly me--I thought people watched "ESPNews" for the sports!

These tensions don't mean that TV will disappear and be replaced by the Net any more than TV killed radio or airplanes eliminated railroads. As new media emerge, the old media will survive but be transformed. There will be opportunities on both sides of the divide, but only for those willing to change with the times.

The times are indeed a-changin'. Mainstream consumers are learning to expect more from their media. They are becoming comfortable with rich interactivity and the collage of user-driven content from multiple sources the Net is so effective at delivering. And surprisingly, TV is helping to take them there.