This is a true story.
In early 2012, my 21-year-old and I decided to watch a show together on ABC. She headed for the living room to turn on the TV, then paused and asked, "What channel is ABC?"
I was stunned.
I've worked in television most of her life. She's watched ABC on channel seven since she was three years old. So why didn't she know how to find ABC?
Broadcasting put shoes on that kid's feet and Cream of Wheat in her stomach. Of all people, she should know how to find the big networks on TV.
She certainly knows their shows.
But in the Internet-connected world where she spends more and more of her time, broadcast networks, television stations and even cable networks are losing their connection to the hits they help build.
Just look at the television business through her eyes:
• She used her first TiVo when she was eight.
• She had Comcast Video On Demand throughout her teens.
• She has watched shows on her laptop ever since that became possible and now uses her laptop and Roku for Netflix and Hulu Plus.
All of which is why people like my daughter, who rarely watch traditional channels, can find it difficult to make the connection between a program and its network.
In the new world of connected TV, it's not ABC, Bravo and Fox, but Netflix, Hulu and Amazon where we find what we used to call "network programming."
Now, 18 months after that discussion with my daughter, the new networks are gaining ground. Original programming, Emmy nominations, relentless media coverage -- clearly these new networks are becoming mainstream media brands.
And that's just the beginning.
While these new distributor brands are taking off, new programming brands are right behind them. Along with Hulu and Netflix, there is a new class of TV-program producer, in the form of magazine, newspaper and online video brands. They are using connected TVs to gain access to television audiences -- access that traditionally has been controlled by broadcast and cable networks.
New shows with distinctive voices and personalities are coming to TV, not via a cable or antenna, but through an Internet connection.
Vogue and Popular Science don't need ABC or Fox to reach viewers. Thanks to the growth of connected TVs, they can cost-effectively and directly serve their target audience. In doing so, they provide a more focused experience for their viewers than is available through traditional distribution systems -- fashion channels, food channels and tech channels delivering programming true to their editorial mandates and their audiences' expectations. Just like the cable networks used to do.
This isn't just a better programming experience. It could also be a better advertising experience. This new crop of niche networks and programs is where new, advanced advertising makes the most sense. What better place to offer high-end kitchen gadgets than to an audience of food-program enthusiasts?
At the same time, the connected-TV experience is becoming more TV-like. Online video no longer needs to accommodate desktop-computer users' short attention spans and their furtive workplace viewing habits. Online producers like Newsy and CelebTV, which have been wooing web audiences for years, are poised to reach millions more with their high-quality video and full-length TV programming. Now, whether consumers want to watch TV on a flat panel, tablet, laptop or smartphone, they have more and more program options consisting of real TV shows, not web clips.
And the final hurdles to adoption are finally collapsing. The technology is sorting itself out; smart TV app stores are jockeying with Roku, Chromecast, et al., enabling consumers to decide what works best. The business is settling into a comfortable combination of low-cost subscription and ad-supported options. So now it's simply a matter of scale.
As this online video ecosystem improves, how will established media companies -- determined to avoid the missteps of the music and print industries -- combat this competition? Most are zealously protecting the current business model at all costs.
That's a good plan if viewers continue to behave the same way they always have. But history shows us that every improvement in technology, from the remote control to the DVR, enables viewing behaviors that aren't necessarily kind to business models.
So what happens if dissatisfaction with rising cable costs pushes more viewers to cut the cord? Online video requires decent bandwidth, so cable companies still have a thriving business with cord-cutters. But the networks don't.
What happens if companies like Aereo succeed in siphoning revenue from the broadcast networks whose shareholders expect to see new and growing cable-subscription income?
And what happens when cable, telco and satellite companies realize there's an abundance of new, independent programming out there, free of the ruthless bundling and never-ending fee escalation that define their network relationships?
Will the big media companies be nimble enough -- and bold enough -- to react?
Or will it just get harder for my daughter to find ABC?
And by then, will she even care?
Start your workday the right way with the news that matters most. Learn more