beyond pt 0 23/1

consumers watch five per cent less TV news, ten per cent less TV movies
and ten per cent less TV talk-shows than offline consumers.
Cost savings
The development of direct response television of which web TV will play
a part will provide more efficient use of advertising investment. In the US,
direct response television advertising is now a US$18.6 billion industry
(Sydney Morning Herald, 22/6/99).
The Internet is making possible the same diffusion of broadcasting power
as with print. This is due to the lower costs of transmission. The
‘web-cam’, though usually delivering poor quality pictures, is a feature of
many websites. Lower costs is enhancing the development of community
television along the lines of community radio. Community radio employs
about 500 people and turns over $25 million. There would be potential
for this to increase two or three times in a television environment.
New costs
The preoccupation with the politics of ownership and the concomitant
attempt to impose regulation by partitioning technologies is likely to
divert funds which might otherwise have been invested in content.
The uncertainty of technological direction is also likely to see
some wasted investment, as with the duplication of investment in
cable networks.
Industry structure and new business models
The future industry structure will depend upon the regulatory
environment. There may be some new large players in the industry if the
government allows new entrants, notably News and Fairfax to commence
datacasting. Fairfax has argued that the opportunity cost of limiting access
to digital television to the existing broadcasters is $1 billion.
The strength of pay TV, which now has over one million subscribers, or
16 per cent of households, and has captured 7.3 per cent of the audience,
points to the value of a proliferation of channels. There is an inevitable
deterioration in the economics of content production when a given
program is one of a hundred different choices compared to when it is one
of four.
What will be delivered, where and by what is not so clear. George Gilder
remarks that television and the personal computer will merge in the same
way that the horse and cart merged with the automobile. In other words,
he sees the triumph of PC intelligence. 17
It is not clear what interactivity has to add to the genre of programming
developed for television, or whether new forms of interactive
programming will be developed. It is not clear how great the demand is
for people to be able to read and see the news and see, or be able to enter
a statistics database while watching the game. The most apparent
commercial benefit of interactive television is the ability to conclude
direct sales following advertisements, but there is not yet a new model
for programming.
17 http://www.forbes.com/asap/
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