New reality: downloadable TV

Could downloading ad-free shows be television's future?

Roma Khanna has three televisions in her downtown Toronto office. A small set screens the all-news station CP24; a large high-definition flat-panel screen is usually tuned to MuchMusic. The third TV lets Khanna surf the other 31 channels she helps develop as CHUM Television's senior vice-president of content.

Khanna switches to PunchMuch, a digital channel launched last June. A music video by superstar punk-rock trio Green Day is playing alongside a scrolling series of text messages sent in by viewers via their mobile phones. “Play MCR,” writes a viewer under the nickname PunkS, requesting the band My Chemical Romance. That message cost PunkS 75¢. But for the same cost, PunkS can also vote for the video.

In fact, that's how all the videos get chosen, 22 hours a day: the video that has the most votes by the time Green Day ends, gets played. “This is totally programmed by the audience,” says Khanna. It's all automated, too: while other channels require hundreds of people, PunchMuch operates off a computer server in the basement, with one employee screening text messages before they go to air. “You might see the same video four times in an hour, which we'd never normally program,” says Khanna. “But that's what the audience wants to see.”

Is this the future of TV? It is probably one of the medium's many futures. PunchMuch viewers aren't the only ones voting with their thumbs. Television audiences, armed with a growing array of new technologies, are finding new ways of watching programs on their own terms–or abandoning TV for the Internet–and that's transforming an industry built upon force-feeding the masses 30-second spots.

TV is going on-demand. Cable and satellite companies are offering more video-on-demand services so people can watch shows (or, in the case of Rogers Cable, the CBC's coverage of the Winter Olympics) separate from any regimented broadcast schedule. Similarly, digital video recorders, a.k.a. personal video recorders, or PVRs (popularized in the U.S. under the TiVo brand), let you automatically save new episodes to a hard drive, pause live television and skip ads. And shows are becoming available for purchase over the Internet through new services like Google Video, and iTunes sells programs for download onto video iPods. New content is also available for video-capable mobile phones–everything from live streaming to the kind of original weekly series CHUM recently produced, which featured 10 episodes, each under three minutes.

The common thread? Viewers can now watch TV wherever and whenever they want–and in some cases, without ads–further fragmenting an industry that already offers hundreds of channels. Meanwhile, younger generations are tuning out in favour of the Internet. One survey last year showed that 18-to-34-year-olds who use the Internet spend on average 14.7 hours a week online, versus 11.6 hours watching TV. That increases pressure on TV broadcasters to prove their worth to advertisers.

In the U.S., CBS and NBC are selling a few shows through Google Video and iTunes respectively. Those services aren't yet in Canada, and the country's TV players are taking a go-slow approach to adopting on-demand models. “We have the luxury of just watching a little bit,” says Barbara Williams, senior vice-president of programming for CanWest MediaWorks. No one knows whether making shows available to iPod downloads actually grows total viewership, or if it just replaces an existing audience, she says. “Every company must make a decision about where they want to be on the curve. There's always the risk that if you lead, you bleed.”

It's a similar dilemma with high-definition television, or HDTV. The technology offers vastly superior image quality, but it's an expensive and risky proposition for networks. Out of the roughly 13 million Canadian television households, about two million have HDTV-capable sets, and of those only one in 10 actually subscribe to an HD service–not enough, generally speaking, for broadcasters to go HD. Producing in HD costs more, yet there's no payoff (yet) in higher viewership or more ad dollars. “The simple fact is the television business is based on eyeballs watching screens,” says Fred Mattocks, the CBC's head of production for English television, who supported broadcasting Hockey Night in Canada in HD this season. “Advertisers don't yet see a value proposition that makes sense.” If a network sells HD too aggressively, it undercuts its standard-definition broadcasts.

Back at the CHUM building, David Kines agrees the industry is going through a tricky transition. As vice-president of CHUM Television's music and youth specialty channels, he was behind the all-HD production of the 2005 MuchMusic Video Awards. “The viewers on HD are relatively small, but you've got to be there,” says Kines. The business decision to produce a show in high-def has little to do with a fatter bottom line, he explains. “At the moment, it's based on positioning, marketing, image,” he says. “It's an abstract financial equation.”

In fact, it's all becoming a bit abstract. Across the hall, Khanna says the television business has to redefine itself more broadly than what kind of signals it sends. “It's more about the content, how you have mediated it for your audience, and how you are listening to them as they consume it,” she says. “It's about the relationship with the audience. That is at the core of what we do. What does the consumer want from us, when do they want it, how do they want it?” Executives like Khanna will be keeping a close eye on viewers. Viewers will keep voting with their thumbs.