TV business headed for newspaper-like fate?

According to Henry Blodget of Ad Age, the television business is in denial. Since their revenues are still holding strong, they are assuming that they'll be fine. He says that the television industry is where the newspaper is five years ago. And I can tell you that's a bad thing.

Here's the problem, according to Blodget:

As with print-based media, internet-based distribution generates only a tiny fraction of the revenue and profit that today's incumbent cable, broadcast, and satellite distribution models do. As internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.

Specifically, TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundation:

* Not much else to do at home that's as simple and fun as TV.
* No way to get video content other than via TV.
* No options other than TV for advertisers who want to tell video stories.
* No options other than cable -- and, more recently, satellite -- to get TV.
* Tight choke points in each market through which all video content has to flow (cable company, airwaves), which creates enormous value for the owners of those gates.

And now, slowly but surely, look what's happening:

* Other simple and fun options emerging at home: internet, video games, Facebook, IM, DVDs.
* New ways to get TV content other than traditional TV companies: Hulu, YouTube, iTunes, Netflix.
* Video-story options for advertisers beginning to emerge: Hulu shows, for example (but NBC, et al., make a lot less per viewer than they do on TV).
* More options for getting video content: telcos, cable companies, wireless companies (soon).
* Fewer choke points in each market: With an internet connection anywhere in the world, you will soon be able to get to almost anything. And not just to your computer -- to your TV.

He makes a great point. The internet will eventually run everything and if people don't make adjustments to their business models, then ask the Boston Globe what will happen.