Television viewers haven’t abandoned the tube for the ‘Net – at least not yet

Broadcasters thought audiences would disappear from in front of their TV sets to spend more time on computers. But that's not happening. Consider three recent deals. Viacom Inc received regulatory approval for its $46-billion U.S. purchase of CBS Corp. By combining two traditional broadcasting companies, Viacom chair and CEO Sumner Redstone will ultimately own TV stations reaching 35 per cent of the U.S. national viewing audience, and several cable companies. BCE Inc traded away almost all of its interest in the highly profitable Nortel Networks Corp. It then bought CTV Inc. with its collection of specialty/cable channels, for $2.3 billion. BCE will use CTV's well-known brand to stake out turf on the Internet. Then, Internet upstart America OnLine Inc used its soaring stock market valuation to propose a merger with Time Warner Inc, estimated at US$164 billion. All those deals involved the purchase of content companies for exceptionally high valuations. Broadcasters have known for a long time that content is king. Now it looks like others agree. Broadcasters grew rich in the 1950s and 1960s as the only medium able to deliver content attracting mass-market audiences. That changed with colour TV, cable distribution, and remote control devices. Next broadcast satellites made their debut. Then, the 1980s ushered in new specialty/cable, and personal computers became common fixtures in offices and homes, leading to the creation of the Internet. Digital television is next, turning TV sets into two-way interactive communication devices. TV sets let users search the ‘Net, e-mail friends, or shop from home. Major broadcasters have already begun to capitalize on digital technology by launching their own web sites packed with information and entertainment. Viacom's Redstone recently said the Internet represents a new form of distribution for television, not a direct competitor. "Technology paves the way. But make no mistake: content is the fuel that drives this industry forward." What do these changes mean? The average viewer still spends as much time in front of the TV set as they did 30 years ago - three and a half hours every day, according to Nielsen. That's almost twice the time spent listening to radio, and more than 12 times the 17 minutes a day spent reading newspapers. Most people still consider television their primary and most trusted source of information. When the TV Bureau surveyed Americans about whom they'd believe if they received conflicting news reports from different sources, 53 per cent chose television, while newspapers came second at 23 per cent. That trust and confidence that has been built over 50 years, and in the future could be one of the most important differences between television and the Internet. On the Internet, "information" can come from anywhere. By contrast, if NABA (North American Broadcasters Association) members like CBS or CNN report that something happened, viewers feel pretty confident that it did. Broadcasters will continue to face fierce competition from every direction. Last month, the CRTC received applications for 460 new digital specialty channels even though no more than a few hundred thousand Canadian households are likely to have the equipment necessary to receive the new channels for several years. The CRTC has abandoned its traditional licensing procedure, and will probably hand out digital licences to most of the digital applicants, as long as they meet a few basic conditions. Bill Roberts is secretary general of the North American Broadcasters Association. The above column is an excerpt from his speech to the North American Institute Media Workshop in Mexico City on May 12.

Television viewers haven’t abandoned the tube for the ‘Net – at least not yet

News | 05/31/2000 4:00 am EDT

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