The End Of TV (As You Know It)

In an era of on-demand entertainment, Big Media is eager to give viewers the content they want. But who will pay for it?

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November 21, 2005 at 5:00 AM UTC

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The string of groundbreaking deals struck on Nov. 7 has been heralded as the beginning of a media revolution. NBC Universal (GE ) and CBS Broadcasting (VIA ) abandoned age-old policies and chose to make top shows available via video-on-demand services. Yahoo! Inc. (YHOO ) announced that it will enable television fans who are away from home to program their TiVo (TIVO ) digital-video recording devices remotely. "The computer has crashed into the television set," declares Brian L. Roberts, CEO of Comcast Corp. (CMSA ), the nation's largest cable operator, which will let customers order up CBS prime-time shows just hours after they air.

But amidst all the hoopla over increasing consumer disdain for the daily TV schedule and enthusiasm for DVRs and iPods, one thing was missing: the business model. How will the producers of entertainment replace the profits they made from selling advertising aimed at a mass audience? It's going to be a painful transition, says Dennis Miller, a general partner of Spark Capital, a Cambridge (Mass.) venture-capital firm that invests in media and technology companies: "Where we are now, there is no model that makes sense."