How Close Is Vaunted Video Revolution?
NEW YORK — THE latest media mega-mergers and the historic vote in Congress to unleash the country's communications titans from their regulatory chains prompt a simple question: What will average folks see when they turn on the TV?
Optimists see a digital revolution. In the long term, they say computers built into TV sets will scan hundreds of channels every day and select programs to suit your taste, preparing them for your viewing pleasure after a day at work.
Pessimists envision a ''pay-per-minute'' nightmare, in which free broadcasts filled with violent sensationalism are interrupted by advertisements for higher quality programs. If you ''press now,'' you will be able to get the better shows for a small fee. But for many viewers, those fees could quickly build to an oppressive monthly bill.
In the short term, few people expect the historic deregulation or the proposed mergers between The Walt Disney Company and ABC and Westinghouse and CBS to make much difference at all.
''In listening to Michael Eisner [CEO of Disney] and Tom Murphy of Capital Cities, hopefully it will mean a continuation, if not an improvement, in television network programming quality,'' says John Reidy of Smith Barney.
Indeed, the heads of both new conglomerates pledged allegiance to the consumer and promised to deliver nothing but the best. But those promises are contingent on continuation of the robust advertising climate that has turned the once moribund networks into tantalizing cash cows. That's where trouble may lie down the road.
Both companies will have to take on large debts to buy their respective networks. Disney will have to borrow $10 billion, while Westinghouse, already struggling with a heavy debt load and weak earnings, will borrow $5 billion.
Several analysts caution that if the current economic recovery stumbles, causing advertisers to retreat, both Disney and Westinghouse could be in trouble.
''There's a danger that would produce bargain-basement programming,'' says Eli Noam, director of Columbia University's Institute for Tele-Information. ''The second danger of being leveraged is that companies become very sensitive to anything that could change their cash flow.''
That could include Congress re-regulating the industry. For some, that raises the specter of companies using their vast media holdings to try to sway Congress away from such thoughts. It wouldn't be the first time.
In 1984, Congress deregulated the cable industry amid promises of vastly increased competition and improved services. Instead, the public got rate hikes three times the pace of inflation and notoriously poor service.
In 1992, responding to public outrage, Congress prepared to re-regulate the industry. Cable companies went into high gear with a barrage of advertisements urging consumers to fight pernicious government interference. They had an impact, but Congress passed the cable act anyway.
Some analysts warn that experience could easily be repeated if the current buying frenzy continues to create fewer and larger media companies. ''That will be particularly true if journalistic professionalism begins to deteriorate,'' says Daniel Hallin, chairman of the communications department at the University of California at San Diego.
Most analysts readily admit the quality of television news delined greatly as a result of the corporate buyouts of the 1980s. There's increased concern now that these mergers will push the commitment to public service and quality news another notch lower in the set of corporate priorities.
With the vast majority of Americans now getting their news and political understanding from television, concern is growing that the advent of the ''all O.J., all the time'' network info-tainment model will steamroller what's left of the news as a public service.
''Most journalists believe they're supposed to serve the public now,'' Hallin says. ''But what happens a generation from now when journalists who were raised to be [entertainment] programmers are making the decisions?''
Other academics also believe the quality of network news will continue to deteriorate, but they insist there's no reason to worry because there will be a plethora of alternative news sources.
''[The nightly news] is getting worse and worse, and whether a station carries it, it doesn't matter,'' says George Gilder, senior fellow at the Discovery Institute, a Seattle think tank. He points to cable and direct broadcast satellites as alternative sources of information and analysis.
Once digital compression bears out its promise of a 500-channel universe, Mr. Gilder predicts the development of, in essence, a huge video news store, similar to a giant bookstore. You'll be able to turn on the screen and dial up your most trusted news source from a menu of hundreds of choices.
In the world of the technological ideal, the same will be true of entertainment programming. With hundreds of channels beaming into your home through the cable system or phone lines, you should have your choice. If you like knitting, program your computer to download the best of the Knitting Channel's prime time line-up. Prefer sport fishing? Let the computer know, and it will graze through hundreds of channels for the best action available.
The only problem will be getting the infrastructure in place so average consumers can have it at home for a reasonable price. That's where the future picture gets fuzzy.
Almost all the country's Baby Bell companies saw the revolutionary potential of digital video technology and the opportunity to cut in on some of the cable industry's profitable monopolies. They immediately began buying into entertainment companies and conducting practical experiments.
With confident promises and millions of dollars invested, several Baby Bells began wiring local communities with fiber optic cables needed to carry the high speed, digital codes that make up the video revolution. But instead of the several million homes that were supposed to be wired by now, only a few thousand are hooked up, and most receive only conventional cable services. Unexpectedly high costs of replacing copper wire with fiber optics and a series of technological snags have put the brakes on the future.
''Ultimately, it's economics and regulation rather than technology that will determine how this all plays out,'' says Michael Bove, assistant professor of media technology at the Massachusetts Institute of Technology. ''If there weren't an infrastructure to be replaced, the technology could be in place right now.''
But since it could take 10 years and billions of dollars to create the new high-tech distribution system, many media executives aren't waiting. They realize the networks remain the best way to reach the largest number of Americans at once, so the buying spree is on.
But with Congress poised to lift the regulations that for 60 years have ensured the networks produce a minimum of quality and public-service programming, and with the technology revolution still ten years off, many critics are bracing for the worst.