You are expecting change to be linear. It was this rate of change up to this point so it will be this rate from here to this point in the future. Technological progress doesn’t work that way. There is a build-up period, a break-away moment, and then a new paradigm. Take CD players. Their break-away moment was the release on CD only of Michael Jackson’s “Bad” album. Sony paid Michael a truckload of money to only release that album on CD to force his millions of fans to switch over to CD players. It worked.

What you laid out as changes are part of the build-up. Think of it as standard finding. Beta vs VHS. Competing systems occur during build-up. Which eventually dominates is not the break-away moment but the last part of the build-up. It lays the ground work for the break-away moment. The break-away moment is the reason for the public to make the shift. A new album by a mega-star singer. In the case of TV and p2p, I think it will be a p2p-only must-see hit TV show that everyone is talking about.

SHEM, they have been predicting brown-outs for the internet since the internet was started. It hasn’t happened since additional capacity has always been added and will always be added. Go out and about in any city and you’ll see new fiber optic cables being laid down. Right now, the telephone companies are practically panicking to keep ahead of cable service providers. The reason for their panic is the fact that more and more homes are disconnecting their land-line telephones and completely going cellular. Providing DSL and internet truck lines is the future of telephone companies. Call up your local telephone company and they’ll love to tell you how they’re getting ready for that future.

As for the death of cable TV, you’re right and wrong. Right that the companies will not die, but wrong that cable channels will still exist. Cable TV companies will be the lines over which many of us will get our internet as they are now for many people. They will be competing with telephone companies, power companies, cellular companies, etc. But cable TV channels will die since they’re based on a gatekeeper business model. Once a business model is shown to work that enables content makers to turn a profit by giving away their content free over the net (my white paper suggests a couple of such business models … click on my name to read it), they’ll just do so. Initially, these production companies will still provide content for cable TV channels but what the cable TV channels don’t option, the content makers will sell themselves to us advertisers and then release over the net. It won’t take long for content makers to just forgo pitching cable channels. Why they’ll forgo such pitches is because they will then have established relationships with us advertisers and have no more need for such middlemen (a.k.a. broadcast and cable channels). Us advertisers will then look who gives us the best bang for our buck and go with what does. As the p2p content providers are able to cut out a whole layer of middlemen, their costs will be lower and thus their price more attractive to us advertisers.

And as the download numbers for TV shows off the net increase, they become more and more competitive with cable TV networks. The cable TV channels’ main sales pitch to us advertisers is how many eyeballs watch their shows. Look at the download numbers of clips on YouTube.com, p2p networks, and such. They are now commonly exceeding the numbers of the average cable TV show and some far exceed cable TV’s Top 20 shows. Google “The Evolution of Dance” for one such example … and a good chuckle.

MIKEY, first, a LOT has changed in the last six years. If you research the industries that the white paper covered, you’ll see this.

Second, many of the predictions I made in the white paper still hold and definitely the general thrust. Would I make changes to it now? Yes, but not to its core. Also realize that the client I did the white paper for was wanting to know about the build-up that was just starting to take place in 2003 and is still taking place. I wasn’t foolish enough to put any timetable into the white paper as those predictions are simply not possible. Anyone that gives a prediction out further than a year is blowing smoke out of their lower orifice.

And I don’t consider what I predicted to be cataclysmic to the general public at large. Just the opposite. They’ll be welcomed and that’s why the change will take place.

For viewers, the change will give more choice and freedom (a.k.a. freedom from rigid programming schedules). No gatekeeper telling you when you can watch a show. You determine that.

For content providers, it means they don’t have to deal with those same gatekeepers who currently hold the fate of their shows in their hands. Content makers will not have such a single point of failure as they do in their current business model, but will become more financially stable. Content makers can lose an advertiser as they’ll have more than one financially supporting their shows … unlike what would happen if they “lose” a network (a.k.a. get canceled). Fans of “Chuck” won’t have to worry their pretty little heads about some head-in-the-sand network executive canceling their show. As long as download numbers are good for “Chuck”, advertisers will come and stay on board and new episodes will be pumped out.

As for handling the load of downloads, capacity is always being added and technology is always being advanced. Local p2p will help with this. Local p2p is a new p2p advance that has your p2p program search the net for what you want downloaded and, here’s the new twist, downloading from the sources closest to you. This advance will reduce the overall traffic over the truck lines of the web.

ROBERT, now for replying to your second comment.

P2P can handle live events. Google “p2p live streaming” to read up on how this is done.

As for downloading a TV show with commercials in them, if the content maker is uploading his show with commercials in them to p2p networks, most people will download that copy. They’ll know it is an unaltered copy and not one that some sick-minded teenager vandalized. Many content makers will enable you to subscribe to their shows via your p2p program so when a new episode comes out, it will start downloading it. Once the download is complete, it will notify you of that fact.

However, I believe the commercial break will not make the transition and TV shows will mainly go back to the “sole” sponsor model, which was used during TV’s “Golden Age”. Not that most shows will have a single sponsor but likely a primary one that sells product placement advertising to other advertisers to cut down on production costs. That is currently being done by advertisers offering other advertisers co-op dollars to mention their products/services in their ads. Content makers will then go around pitching their show ideas to us advertisers and try to convince us why their show idea would be a great vehicle through which to sell baby diapers. Some of us advertisers might express an interest but require the content makers to get other non-competing advertisers to come on board before we’ll commit. Us advertisers love to spread risk around … which is one of the reasons why commercial breaks came about. In the future, mass communication majors will be required to take courses with titles like “Pitching Advertisers 101″.

As for impatience of viewers wanting to select and watch something right now, p2p live streaming can do that. But I think what will more likely happen is that viewers will end up subscribing to far more TV shows than they have time to watch so they’ll be more selecting what is already downloaded and waiting to be watched than what might be out there. This becomes both a boon and a challenge to content makers. Boon in that once you get a viewer to subscribe, they’ll very likely watch your show and continue to subscribe to it. It is a challenge in that content makers will need to convince people to initially download at least one episode of their show. But this isn’t something new. This is the challenge of all broadcast and cable TV networks right now. The challenge will just migrate to content makers and their supporting advertisers. And that’s where blogs like yours can help influence things.

Scott’s vision (at least based on his comments, if not the white paper) is heavily P2P download centric. So it probably wouldn’t be a good model for sports and other events people want to watch live anyway. His vision also involves advertisers heavily embracing the P2P download model. I struggle with getting my arms around that because because for reasons of bandwidth and download expediency (and perhaps other reasons), I’m not sure you could find a P2P download of a TV show WITH the commercials still in it if you tried.

The bigger hurdle for me to jump over is radical behavior changes in terms of consumption. While I personally don’t have any problem with deferring a lot of stuff for later viewing and could embrace a P2P mechanism that worked more or less like a DVR with scheduled downloads, I would not project my tolerances to the larger television viewing audience. Even under optimal conditions over a broadband connection a P2Pdownload of a one hour TV show (even if stripped down to 42-43 minutes) carries quite a bit of wait time. If your plan is to download now to watch tomorrow (or even in an hour or 30 minutes) that’s not a problem. But there is a huge population of people, clearly the largest presently, who just want to turn on the TV and watch something NOW. I’m not sure that is a problem technology can solve, because it’s not clear it’s a problem.

Look at how many major sites were crippled by the Michael Jackson story, and that’s a relatively small surge in audience by television standards, and most of that online surge was textual not visual.

How the internet will ever be equipped to handle mass audiences on a scale remotely approaching television I don’t really understand.

I notice that your paper was copywritten in 2003. You make some very, very aggressive forecasts but it’s been six years since you wrote this white paper and many of the traditional media models you examine are just as strong today as they were in 2003 if not stronger.

Given that so little has changed in six years, what do you think is a realistic timetable for some of the cataclysmic changes you expect?

Anyway to Scott, Cable TV will NOT be dead at least for 20years . I’m sure there will still be people out there who will never need Nintendo Wii like I have, or XBox360. Many people will always prefer traditional TV.

In a day and age where you can reserve DVDs for a dollar online and pick them up at your local grocery store via Kiosk, it’s going to be longer than another five years before the technology gets to a price/value/hassle level where internet connected homes will routinely be connecting their TVs to their computers/Internet. That’s not wishful thinking of the broadcast networks, that’s just reality. DVRs pose a much bigger threat now and beyond 2013 to the iTunes/pay download model than free online TV.

I’m not sure we’ll have even hit the phase of “Your broadband internet is $40 a month — so long as you subscribe to our TV content offering too, but if you don’t and you want access to free streaming TV sites…” by 2013, but we’ll see.

But in the article, it is clear that even the authors of the report don’t think nothing will change. Change will happen. The old regime is fighting to keep its old business model alive but knows it is very likely doomed. The start of the last paragraph says it all “The report goes on to state that free online TV will challenge the paid model of TV download services…” The rest of the paragraph is wishful thinking by the broadcast networks. And the “challenge” isn’t in the networks’ favor.

The turning point will be when the home internet-connected computer becomes connected to the living room TV. That hasn’t happened yet. It is in the process of happening though. Once it does, broadcast and cable TV networks (a.k.a. gatekeepers) will be dead.