How is the television industry being impacted by the Internet?

What will be an ideal response?

The television industry has become the major source of premium video on the Internet. It is beginning a transition to a new delivery platform: the Internet and mobile smartphones and tablet computers. This new platform is not leading to a decline in traditional television viewing. Instead, it is just changing how, when, and where consumers can watch TV. Cloud computing has created a shift away from the ownership of content and instead a focus on access to content anywhere, anytime, from any device. Social networks have enabled a new kind of "social TV" where consumers share comments while viewing television shows. Expansion of broadband networks and the growth of cloud servers has also enabled the growth of a whole new class of television distributors. Whereas the dominant way consumers obtained a TV signal in the past was from over-the-air broadcasters, cable TV, or satellite distributors, a new "over-the-top" channel has developed led by powerful technology companies such as Apple, Google, Hulu, VUDU, Netflix, and others, all of whom offer consumers access to television shows. The services ride "on top" of other network services like cable TV and telephone service. It's as if there is a new "Internet Broadcasting System" with many new players, which is obviously a threat to cable television and the other distributors, who, in turn, have their own on-demand services for television. In some cases, these new distributors have also begun to get into the content production business by creating their own TV shows.

While the Internet has not diminished TV viewing, it has transformed how, when, and where TV shows are watched. While the TV may be the biggest screen in the house, it now has to compete or share with other digital devices, such as smartphones, tablet computers, and game consoles. The Internet and new mobile platform are changing the viewing experience, making it more of a social experience extending beyond family and friends in the same room. The social circle has expanded to include Facebook and Twitter friends in different locations, changing television viewing from a "lean back and enjoy" experience into a "lean forward and engage" experience.

Challenges lie ahead for the television industry however. With so much video and television now available online "for free," many users are thinking about "cutting the cable cord" and just relying on the Internet for their video entertainment. Other viewers are "cord shavers" who have reduced their subscriptions to digital channels. So far this phenomenon has been limited, but the high service fees for cable television service and expanding Internet capabilities suggest that the future of traditional cable systems may be challenged.