Kai Ryssdal: You may be listening to radio at the moment, or at least audio, however it's delivered to you. This week on the program, though we're all about television -- and the future thereof. Yesterday I was talking to John Moe of our Marketplace Tech Report at the Consumer Electronics Show in Las Vegas, and we were talking about how there's a whole new breed of smart TV's coming -- that are, basically, giant computers hooked up to the Internet. But hardware's just one part of the puzzle. Think about what goes on the screen and how we pay for it.
Jennifer Collins reports.
Theme for Monday Night Football
Jennifer Collins: We all know what that means: It’s time for Monday Night Football on Google.
Wait, I'm getting ahead of myself. That's the music for Monday Night Football on ESPN. But Google's day could be coming.
Mark Suster: I think they'll bid on the NFL rights in the next five years.
Mark Suster is with the venture capital firm GRP Partners.
Suster: And I think that if you can find an internet company broadcasting NFL via internet, you'll see the industry crumble.
Now Suster may be getting ahead of himself. The crumbling industry he's referring is cable and satellite. They still have around 100 million subscribers in the U.S., and generate around a $100 billion a year in revenue. But competition is changing the way we watch and think about television. Forrester Research predicts the number of pay TV subscribers who cut the cord will continue to increase next year.
Mark Suster: When consumers have choice, and distribution options open up, these huge fat industries with big profit margins start to collapse and new players tend to emerge.
New players, and some old ones with new services, are streaming video to an array of devices from TVs to tablets to smart phones. YouTube will launch 100 channels this year that range from Car and Driver Television to something with Madonna.
Madonna: All the world loves a stage.
Netflix is taking on HBO and the networks by offering original shows. There's Hulu and Vudu and Amazon and Apple. And then there's comedian Louis C.K. His recent Internet experiment sent a shiver through the entertainment industry.
Louis C.K.: Don't text or Twitter during the show, just live your life. Don't keep telling people what you're doing.
Louis C.K. posted a video of his standup show at the Beacon Theater in New York. He sold it for $5 online. Over 200,000 people downloaded it. He made over $1 million, not a dime to a studio or distribution company.
Louis C.K.: I'm not like you. I'm not. I'm not.
There aren't many Louis C.K.s out there, yet. The more common model is a company like Break Media, which produces and distributes its own video. This is one of Break's first hits: A girl eating a praying mantis.
Praying Mantis: Go! Oh! Oh my god!
Break bought in more than $50 million in revenue last year. It distributes videos online and through apps on smart TVs and TV set-top boxes. CEO Keith Richman is out to create a network made for the streaming era: videos on as many outlets as possible supported by ads.
Keith Richman: We want to have deals with whoever will influence that future world.
Because like everyone else, Richman knows the days of forcing people to pay for channels they don't want just to get the ones they do are coming to an end.
Richman: If you're a channel that people pay for and they don't know why, you have a very short lifespan.
Robert Kyncl: You will have a lot more choices than you do today.
Robert Kyncl is the vice president of content for YouTube. He’s overseeing the 100 new channels on the site.
Kyncl: And when I say choices, I don't just mean a lot of video choices -- even though that's true as well. But also different ways to pay and different ways to have your content bundled.
Kyncl says there will be subscription services. There will also be individual TV shows for sale, there'll be free video and there will be packages of channels. And eventually, your TV may be smart enough to serve up only the things you want to watch when you want to watch them.
I'm Jennifer Collins for Marketplace.