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Internet/TV convergence
``` [Dan Schiller has been saying for a long time now that the emerging Internet business model is basically television. The evidence over the last six weeks is definitely heading in his direction. Here is his analysis.]
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11 December 1996
Dear Phil:
Your rre missive, to the effect that PCs and television were on a converging course, seems to me to open up a wide and important set of issues. Why is this convergence - or collision - happening? What does it mean to transfer television practices to this new context? How far can this transfer develop; may the process of convergence become generalized as a developing model for the net? Here are some comments.
Internet Television: Net Makeover?
By Dan Schiller Professor of Communication University of California, San Diego December 1996
Television and the Internet are pressing against one another, in a trend that raises vitally important issues. Why is this convergence - or collision - occurring? What does it mean to project contemporary television practices onto cyberspace? Might the process of convergence become generalized as a model for the Web's further evolution; how far can it go? Let's map some of the abundant recent evidence.
1. Convergence is real
Television Systems: PC and TV manufacturers each seek enlarged markets. TVs that can stand in as Internet terminals, and PCs that can accept television signals are, in turn, obvious extensions of current consumer electronics markets. Similarly, U.S. computer software companies and broadcast television networks, program companies, and stations have commenced to jockey for competitive advantage as their industries merge. Nowhere has this internecine disagreement come through more forcefully than in the process of developing technical standards for digital TVs. Negotiators for computer companies recently staged an upset victory in the standards-making contest, setting the stage for what one analyst calls "a titanic battle for the nation's living rooms" between established set makers and personal computer manufacturers, "both of which want to build the digital device that will display these images."1 In truth, this epic contest will be even broader, in part because a stable Internet infrastructure has yet to materialize.
Strategic alliances have been quick to proliferate. Microsoft and DirecTV - itself a subsidiary of GM's Hughes Corporation, with minority participation by AT&T - have inaugurated DirecPC, utilizing a satellite-delivery system to furnish television over a PC for a monthly subscription fee akin to that charged by cable television system operators.2 Philips Magnavox and, separately, Sony, are marketing "Web TV" set-top boxes, while Time-Warner, like other giant cable system operators, is contracting with suppliers for similar equipment, to work with emerging systems that will beam TV-like Internet channels to suitably equipped television sets.3
Network Services and the ongoing initiative to transform the Web into a "push" rather than a "pull" medium: The Interpublic Group, a major advertising holding company, has partnered with Ifusion Com, to create an Internet broadcasting system named Arrive. Akin to analogous services offered by Pointcast, Backweb Technologies and Intermind, Arrive will deliver customized information, including advertising, directly to users' screens whenever their computers are idle. The result, writes one observer, is to relieve users of "the need to search through the overwhelming amounts of data available" - because preselected sources of information are brought to users automatically.4 In such a context, the ability to control the viewer's start-up screen acquires newly decisive importance.
Both Netscape and Microsoft have targeted the startup screen as what one writer calls a "platform[] for receiving Internet broadcasts."5 Microsoft's entry will utilize its Windows operating system software to create "Active Desktop" - a TV-like receiver that is already allied with a leading Internet broadcaster. One of Active Desktop's "premier" or default channels will be supplied by PointCast, whose on-line network already reaches an estimated 1.7 million subscribers with broadcast feeds of news and advertising.6 TheWall Street Journal tellingly refers to Microsoft's overall initiative, as "an important experiment in audience-building," and one with special appeal "to new consumers that haven't been moved yet to go on- line."7 (More momentarily on who these "new consumers" might be, and on how they relate to emerging "push" services.)
Another important initiative arrived last summer, when Intel, the leading semiconductor manufacturer, rolled out Intercast, a system allowing Pentium processor-equipped computers to receive video and audio signals. Intercast permits concurrent Web surfing and TV viewing, and sends out specially created content that complements or ties back into TV shows. The venture depends on a growing list of major broadcast programmers, including GE's TV network NBC, Time- Warner's CNN, Viacom's MTV and, interestingly, Boston public broadcasting station WGBH.8
And then there is America Online's recent hire of Bob Pittman, the wunderkind who launched MTV fifteen years ago, "to polish the surface of the first break-out brand in cyberspace."9 AOL's churning subscriber base of 7 million may not look like much next to the tens of millions of net surfers, but perhaps that's not the relevant comparison. It's certainly a formidable basis on which to compete against the ratings numbers garnered by any of the existing cable networks. Perhaps AOL can identify means of symbiotically migrating audiences from and to TV. Oprah Winfrey, for example - whose television talkshow reaches a daily audience of some 15 million viewers - has successfully carried a portion of her on-air bookclub audience to her AOL program service.10 ESPN's popular Web-based Sportszone comprises another such linkage between the two media. Audience measurement infrastructure: Feverish discussion is underway of how best to track the net surfers' attention - especially to commercial messages.11 Nielsen, the longtime television ratings service, is actively developing audience measurement technique on the Web, where it already faces competition. DoubleClick, for example, comprises a network service for subscribing Web sites and advertisers; by monitoring usage it builds user profiles, on the basis of which it instantaneously uploads customized ads. Since March, 1996, DoubleClick has identified the preferences of some 10 million Web surfers, with a reported 100,000 more profiles flowing in each day. A new trade association, the Internet Advertising Bureau, helps ensure that the sponsors who are, according to one writer, "trying to turn the once-eclectic Web into the ultimate 24-hour marketing machine," do not lack for an institutional voice.12
Programming: "[A]dvertisers," writes Joan Voight, a reporter for AdWeek, "want to work hand in hand with publishers to coproduce the material that packs Web pages." ParentTime, a Web site that is a joint venture between Procter & Gamble and Time Warner, provides parents with interactive advice and promotes Time Warner magazines such as Parenting and Sports Illustrated for Kids. P&G has, in addition nine brand-specific Web sites, with dozens of others waiting in the wings; but ParentTime is a collaborative effort by the world's leading advertiser and a megamedia corporate ally to experiment with interactive program forms specifically targeted at consumer advertisers' most-needed audience: women.13
At this juncture, we return to the question of who the new targets of internet broadcasting will likely be, for the effort by advertisers to increase women's use of the net has indeed been at once widespread and concerted. Ed Meyer, then CEO of Grey Advertising, was asked in March of 1995 what "key issues" had to be explored with regard to new media. He responded: "One of the biggest issues is how we get women to use new-media applications and embrace these new technologies. With 70% of traditional advertising directed to women, it's vital to the success of new-media opportunities to appeal to and be used by women."14 Women's use of the Internet has duly increased, at least in the U.S.; women accounted for less than 10% of Internet users a few years ago but, according to one tally, totaled nearly one-third by summer 1996.15 It's significant, in this context, that one of Microsoft's six introductory TV-like channels is a magazine for women called UnderWire.16
Even beyond these new channels, the horizon of on-line network television is shrinking toward experiences that give Web users incentive to interact under the sign of one or another brand. Sponsored chatrooms, for example, encourage users to exchange personal messages that contextualize their use of particular commodities - make-up, say, or malt liquor - within the span of everyday social interaction. Thus is an emergent cultural practice reconsecrated to consumption, the most hallowed ground we have. Interactive genres of different kinds, from drama to news to games, seem certain as well to evolve further, under the watchful eye of sponsors who can lard them in all sorts of creative ways with product mentions and demonstrations.
On one side, then, "push" services threaten to reduce use of the net to a more passive television-type experience. On the other side, however, there are ongoing reformulations of Web experience that put a premium on forms of active engagement - but mainly insofar as users' involvement can be rechanneled on terms established by sponsorship.
There is little doubt that TVs and PCs are converging, and that a series of unfolding applications are beginning to recast the Web. What then are the implications of these developments?
2. Market Power and Commercial Sponsorship
It is not "television" that is converging with cyberspace, of course, but a historically specific set of practices that we can more properly gloss as "commercial networked television." Commercial networked television is hardly new. It's crucial to stress that, long before the Internet, commercial networked television had already acquired the defining institutional identity that now bulks large in its convergence with the Web. Each of the two adjectives hints at a crucial feature. First has been the centralization of television content, or programming. This centralization should be distinguished from the considerable geographical concentration in programming and related industries that it encouraged. Centralization of programming via networking meant that large producers and distributors, rather than local or nonprofit broadcasters, were enabled to gain market power sufficient to dominate the larger television industry. (Thousands of U.S. musicians and untold other performers, by comparison, became casualties, as networks and stations successfully pushed to utilize recordings in preference to more expensive and unreliable live performances.
Microsoft is putting $400 million annually into developing Web content, with no expectation of turning a profit for at least three more years. That's around an order of magnitude above the annual investment that was required by Rupert Murdoch's Fox Broadcasting network [or, for that matter, by Gannett's newspaper, USA Today], before each began to pay off. And corporations as a whole are estimated to have spent a couple of billions of dollars in developing Web pages. This scale of expenditure makes it all but certain that one or another megamedia company will eventually figure out how to innovate profitable cyberspace genres. But the question of how far such companies will be able to dominate the market for Web- based experiences is a larger and more complex one.
The key goal of Webcasters, on current evidence, is to concentrate and stabilize relations between program services and audiences. Under active exploration in realizing this goal, and therewith in claiming additional market power, are "push" services, exclusive licensing agreements, a star system, blockbuster programming investments, and operating system software. But it must never be forgotten that this multifaceted attempt to stabilize the relation between programming and audience is itself largely a function of the second abiding aspect of a commercial networked model - its embedded reliance on advertiser sponsorship. The Wall Street Journal is perfectly correct to reduce this sprawling hubbub of business activity to the following headline: "How Net Is Becoming More Like Television To Draw Advertisers." The explosive growth of Internet broadcasting is tantamount to an admission that advertisers have succeeded in bending the Web to their particular social purposes.
TV is the world's most effective selling tool. Simplifying only somewhat, it was because of its ability to accommodate live-action demonstration, over and above identification and endorsement of products and product applications, that TV succeeded radio as the foremost advertising medium. Advertisers are not yet confident that the Web portends an equally decisive new stage in the ongoing evolution of the sales effort - but they are certain that they cannot afford to overlook that possibility.
So much at least we may take from the celebrated address, already two and a half years ago, by Ed Artzt, then CEO of Procter and Gamble. Before the American Association of Advertising Agencies, Artzt hectored his audience to rouse itself from its slumbers, and to "seize technology in [its] teeth" to ensure access for commercial sponsors to new media.17 Consider how far the debate has traveled - and metamorphosized - since then.
Today it is no longer a question of whether advertising and marketing will move on the net. Now, rather, the issue has become how to make the pioneering forms of commercial representation - banner ads and corporate home pages - succeed more efficiently, or give up pride of place to "new and improved" advertising practices. Hunter Madsen, vice president for commercial strategy at Hotwired, makes a strong case for unremitting experimentation, toward less- standardized banners or "brand modules," and direct interpenetration of commercial and editorial matter ["content cobranding"].18 The generic forms of advertiser sponsorship and programming on the Web, surely, are nowhere near stabilization.
But neither is their ultimate form the chief issue. Advertisers have proclaimed the necessity of colonizing cyberspace, and of making it dependent on their ability to provide funding. Does anyone still truly think that they will realize the folly of this ambition, and abandon the net? If advertisers ever recognized that the "culture" of the net was unreceptive, that time is long gone. They will try, and try again, until....
3. Implications
Let's distinguish two levels of analysis. The first is, what does advertiser sponsorship do to the media that become dependent on it? The second is, to what extent will the net come to be advertiser supported?
There is plenty of evidence that advertiser sponsorship profoundly affects individual media practices, content, and relationships with audiences. It is not mainly a matter of poor ethics or lapsed standards, but of a systematic overall orientation. Advertisers want media to deliver audiences to them, in predictable quantities and at standard and comparably efficient costs. These audiences, moreover, need to be of ascertained composition and "quality," in the sense that advertisers desire to purchase access to a guranteed number of women ages 18-49, or men aged 25-54. (Of course audience sales is often much more nuanced and targeted than this.) I have already underlined that the rollout of "push" services instantiates an effort to recreate an old necessity in new form: access to stable - measurable and predictable - audiences for advertisements.
When advertisers foot an appreciable proportion of overall media costs, they come to dominate that medium's workaday self- consciousness, which in turn places new pressures and limits upon that medium's relationship with its audience. It is not only a matter of "censorship" to suit the idiosyncracies of particular sponsors (though neither should censorship of this kind be gainsaid). It's also, and more substantively, a question of emphasis on particular program forms, and the priorities that they express - particular creative practices rather than others. The practices that saturate our culture, and that are now being transferred wholesale to the net, are market-driven in intent and in effect. That doesn't mean they cannot sometimes eventuate in true artistry, but rather that emerging forms of art on the net are themselves being placed in harness to a narrow and exclusionary social purpose: selling.19
How far can this convergence go? Of this we can hardly be confident. The trail is already littered with the effects of poor strategic judgments and corporate missteps. Consider only the just-announced decision by Pacific Telesis, Bell Atlantic and Nynex that their venture into television production, TeleTV, will disband. Or the trade journal Variety's recent pronouncement: that "convergence" itself is ceasing to be this season's buzzword in Hollywood. Surely there will be additional failures. Nobody can be certain that any particular venture will succeed, let alone that it will transform the net.
But that doesn't mean the whole thing is an open question. Most significant, it seems to me, is that the outcome itself is being left essentially to "market forces," that is, to the very business behemoths whose actions I have briefly assayed. If present trends are not interrupted, the extent to which a variant of commercial network television comes to prevail on the Web will be very largely determined by profitseeking companies. Other social interests, prospecting for alternative visions of cyberspace, including churches, public-interest organizations and community groups, educational institutions, musuems, libraries, and labor unions, will either be marginalized, or else incorporated - and exploited - by sponsors seeking access to their members, and perhaps a patina of legitimacy.
The debate over the propriety of advertiser-supported radio broadcasting (the so-called "American system") unfolded through years of public discussion,20 and drew outbursts of anticommercial concern from highly placed politicians, church leaders, businesspeople, educators, and philanthropic organizations. In contrast, the "debate" over commercialism in cyberspace has been a nonstarter. The established media have been nearly silent; aside from the question of "spamming" - basically a diversion - scant attention has been accorded to the grave questions raised by the growing commercial presence on the net. In such circumstances, what chance is there of building an abiding public purpose into the net?
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In actuality, many people and organizations, a diversity of motive and ambition continue to be present, as the commercial imperative unfolds across the Web. Some participants are unalloyed boosters; some are alienated cynics - seemingly above the dismal venality and small-mindedness of it all. Still others may take pleasure in successfully smuggling private messages - cybergraffiti - into sponsored spaces, or in covertly intruding in other ways. But what of those more active dissenters, who seek to carry forward on the net the longstanding oppositional traditions of independent film and video artistry, and of free thought and association more generally? We may place our hopes in them - with our hearts, at least, if not yet with our heads.
---Dan Schiller Professor of Communication dschille@weber.UCSD.edu
1quote from Mark Lander, "Industries Agree On U.S. Standards For TV Of Future," New York Times 26 November 1996: A1, C6; Bryan Gruley, "Television and Computer Makers Reach An Accord on Design of Digital-TV Sets," Wall Street Journal 26 November 1996: B10; Joel Brinkley, "Defining TV's And Computers For a Future of High Definition," New York Times 2 December 1996: C1, C11. 2Katherine Stalter, "NBC, Intel link to channel TV to PC," Variety 1-14 July 1996: 33. 3Mark Robichaux, "Time Warner Inc. Is Expected to Order Up to $450 Million of TV Set-Top Boxes," Wall Street Journal, 10 December 1996: B8. 4Stuart Elliott, "Advertising," New York Times 20 November 1996: C5. 5David Bank, "How Net Is Becoming More Like Television To Draw Advertisers," Wall Street Journal 13 December 1996: A1, A8. 6David Bank, "Microsoft Picks On-Line News From PointCast," Wall Street Journal 12 December 1996: B4. 7Don Clark, "Microsoft's On-Line Service Goes to a TV Format," Wall Street Journal 9 Dec 96: B7. 8Amy Dunkin, "PC Meets TV: The Plot Thickens," Business Week 23 December 1996: 94-5. 9Cathy Taylor, "Welcome! You've Got Bob Pittman," MediaWeek 2 December 1996: 24-27. 10Deirdre Donahue, "But some wonder if people are really reading," USA Today 12 December 1996: D1, D2. 11Jane Greenstein, "Advertisers Stell Trying to Get a Line on Net Users," Los Angeles Times 2 December 1996: D5. 12Joan Voight, "Beyond the Banner," Wired December 1996: 196, 204. 13Jeff Harrington, "P&G's programming push," USA Today 25 November 1996: 12B. 14"InterViews," Advertising Age 13 March 1995, S-26. 15Andrew Kantor and Michael Neubarth, "Off The Charts: The Internet 1996," Internet World Dec 96: 44-51. 16Don Clark, "Microsoft's On-Line Service Goes to a TV Format," Wall Street Journal 9 Dec 96: B7. 17For an illuminating discussion, see Matthew P. McAllister, The Commercialization of American Culture. Sage, 1996. 18Hunter Madsen, "Reclaim the Deadzone," Wired December 1996, 206-220. 19For those wishing to learn more about the role of advertising in television itself, check out Erik Barnouw's classic book, The Sponsor. New York: Oxford University Press, 1978. 20Robert W. McChesney, Telecommunications, Mass Media and Democracy. New York: Oxford University Press, 1993. ```
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