Evolution Shift
A Future Look at Today
September 13th, 2006

Convergence and Disintermediation Enter the Living Room

Steve Jobs made the expected announcement that Apple would market the iTV , the gadget that will link the Apple computer in the den to the television set in the living room. Most of the reporting on this announcement was around the coming wave of downloading movies onto the computer and then transferring them to the television set for viewing. The analogy was made to the music business and the iPod and iTunes, as in “Jobs has done it again”. All true.

Yes the early and partial disintermediation of the theatrical distribution system for movies has begun. Yes, Jobs is out in front as he was in downloadable music. Yes he started with one studio and others would follow after the holiday season. Yes the price for the iTV is affordable. This is all good, particularly because of the expected ‘ease of use’ of Apple products. To me however, this announcement was about something else: the breaking down of the barrier between the television experience and the computer experience. That is where the transformation will be.

Ten years ago was the beginning of all the talk about ‘convergence’. This generally meant the convergence of the television set and the personal computer. People spoke of it as an eventuality, and that it would happen soon. Efforts such as WebTV came along, but were too soon and didn’t have the fundamentals down as far as the television side of the equation was concerned. Even the visionary Jobs famously said that it wouldn’t happen because, as he said “The computer was a leaning in experience, while the television was a leaning back experience” Ah, how time, innovation, competition and bandwidth can change the picture.

What was generally concluded over the past couple of years is that convergence did happen, but of a different sort, on cell phones. This was a technological and usage convergence where one device was used for several different modes of communication, calendars,addresses, photos, surfing and now short form television. With the increasing speed and miniaturization of chips, these hand held devices have become functional computers. So, the telephone and the computer merged.

It is the living room however that is the holy grail of convergence. For 60 years, Americans and citizens of developed countries all over the world sat in front of the new electronic ‘fireplace’ in the living room. This was the place where we experienced our entertainment, our news, our history in the form of space travel, assassinations and wars; our global village. It has been persuasively argued by many brilliant people that the television was the single most influential cultural invention of the last century.

Until the Internet. Now, with high speed connectivity, the Internet has become the backbone, the connective tissue of all other media. Yet we still primarily experience it on computers. Even with sites like YouTube, we watch video on our computer screens, even if the video came from television. So even though the Internet is the most powerful agent of disintermediation since the invention of moveable type, it has been contained on our computers.

Right now in our living rooms we can time shift with DVRs, fast forwarding through the boring stuff and the commercials. We can now place shift with a Sling Box. We can listen to it all in 5.1 surround sound and switch channels at will with our remotes. We can, if we want to mess with lots of cables, hook-ups and routers actually bring the high speed Internet onto our flat panel screens, but it is a lot of work and not yet fully perfected. With the Jobs announcement we have entered into the final stage of convergence of Television and Internet. This will be the final disintermediation of the television business as we have known it.

I am sure that many of you sometimes come to the television to see what’s on, and using the remote, you ‘dial through the satellite’ looking for something to capture your interest for a period of time. Soon, you will be able to dial through the satellite and the Internet from your couch. ESPN to YouTube, ABC to iFilm. Any channel and any web site are now available on your wide screen television set in your living room. Now that will be a universal remote!

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