Look Now: Digital TV Transition Already Here

The digital television transition has begun. And it has little to do with Feb. 17, 2009.

Yah, that’s the date that all local TV broadcasters have to be sending out all their signals in digital form. And there are going to be a handful of clueless TV viewers who are going to find out on that date that their old-style TV sets are not going to pull in their ABC, CBS, NBC and Fox shows any more.

But the changeover that is underway to digital broadcasting by local TV stations has little to do with actually making use of the digits. The stations are still going to be sending out to the viewer a set of scheduled programs, designed to be watched in their entirety, when shown.

This is not making use of the flexibility of digits, this is not giving the viewer what he or she wants when he or she wants it. Or giving the advertiser more options than simply inserting ads in between segments of shows. After all, in today’s analog or digital broadcasting, there are clumps of ads in between segments of shows. Advertisers and programmers are trying to devise “podbusters” as a result that make particular ads stand out before everyone tunes out.

Now comes a real digital broadcaster like Hulu, the joint venture from NBC and News Corp. If you go there to watch the latest episode of Viacom’s “Comedy Central” or USA Network’s “Burn Notice" or a piece from "Saturday Night Live," you aren’t bombarded with ads as you watch the show.

Each ad break is populated by just one 30-second ad. Isn’t this the way TV itself got its roots, even if the break was one minute long, back in the Fifties and early Sixties? Give the audience credit: It wants to watch shows, not ads. And ads (Alka Seltzer understood this) had to be as entertaining as the shows, if you wanted them to get watched.

But here’s where digital TV differs from conventional TV. Before, all you could do was watch the ad. Now, you can decide to watch more – of the advertiser’s message.

The ad itself, through the niftiness of digits, becomes a hot zone. If you get inspired by the U.S. Air Force’s message that it is “Above All” in what it does for the nation’s security, you just click on the commercial and get transported to an Air Force recruiting site, replete with a series of videos you can watch to see what part of the Force you might want to join and details about what life in the Force might be like.

You can spend an hour or two on this Air Force site – and then just go back to “Burn Notice” and pick up on its Miami-based heroin trade crime intrigue when you want. Heck, you can start over, if you forgotten how you got there in the first place. The playback is, as the cable companies would say, “on demand.” And the advertising is both part and apart from the programming that got you there in the first place.

For this, you get free professionally produced high-quality half-hour and full-hour TV programs. You can watch them, albeit a bit fuzzily, on your 24-inch PC and Mac screens. But you get them for free.

Over at YouTube, from Google, it’s still not clear how user-generated content for the TV and PC screen is going to sustain itself.

Maybe you’re going to get a big belly laugh out of the guys who direct four cell phones at corn kernels and are able to heat them, one at a time, into pop corn buds.

Or you are enthralled by the rapture a hamster shows in ingesting a pop corn bud on the keyboard of a piano.

You see no ads, at any time. You see just content, with no supporting revenue, on YouTube. Even though it’s almost two years after Google plunked down $1.7 billion for the video-sharing site.

That’s real money (or shares). And even pop corn media has to produce some kind of revenue stream some day or Google CEO Eric Schmidt is going to have to pull the plug, under pressure from shareholders. After all, Google’s vaunted 25% net profit margin has been declining (slightly) in recent quarters. Even Google will plateau.

Right now, the outfit that is setting the pace for how TV will transition to the digital era is Hulu, from NBC and News Corp. Which means Rupert Murdoch and Peter Chernin, who already have picked up the value of My Space, since they acquired the social networking site for what seems like a song now at $580 million, are on course to be the first real darlings of the digital TV era.

Because they want to build a real, easy-to-use and profitable business from their efforts.