Debate on a bill to temporarily extend the transaction account guarantee or t. A. D. Program that provides limited Insurance Coverage for noninterestbearing transaction accounts. A procedural vote on the measure is expected at 5 30 eastern. Host well, on the communicators were doing a series looking at the future of tv, and this week were pleased to have joining us the president and ceo of the National Cable and telecommunications association, Michael Powell. Mr. Powell, thank you for being on the communicators again, we appreciate it. Guest my pleasure. Host if you would, put on your future glasses. Guest all right. [laughter] theyre on. Host look ahead five years, ten years, twenty years. Whats tv gonna look like, and especially whats the cable industry gone 2345 look like . Guest well, i think if i were answering that question, i would say follow the technological trends that are transforming all digital businesses. The first that i would probably observe is the dramatic shift from hardware to softwarecentric systems. The minute you are able to do more in software rather than proprietary hardware, i think the full creativity of Software Engineering comes into play. I think thats coming to television. Right now if you ask the consumer whats the tv experience in my home, theyll talk about a box that sits on their credenza above their tv, theyll talk about a remote control, theyll talk about the things they dont like about that, to be perfectly candid. But increasingly, the functionings that those devices serve functions that those devices serve are going to be able to be migrated into software rather than proprietary hardware equipment, and i think youll get faster innovation cycles. So a company can innovate the guide overnight. Not over the course of a hardware replacement. And i think that when you do that, you start thinking about the other great trend that weve seen ushered in by mobile and the app environment. Youll be able to see little min wets of software that are or able to deliver kind of new and intriguing experiences, taking advantage of the premium content we love, but also with the powerful information pipe that were able to marry with that. And i hope through Creative Minds that will combine to create really revolutionary, new kinds of televisionwatching experiences. Host jeff bukes of time warner recently predicted that most channels in a couple years will be like hbo; subscriptionbased, youll be able to watch almost a la carte. Guest well, people say that host he didnt say a la carte. Guest i dont think that he would. [laughter] you know, that means many Different Things to many different people. What it means, what it means which i think is correct is that people will have a very anytime, anywhere, any device kind of approach to their television experience. You know, my life as a child of Appointment Television when my show was on 7 30 and im angry with my mother because were out shop, and if we dont get back in the next 20 minutes, im going to miss it. And im not going, by the way, to have any ability to catch up to it or see it again, i can remember that anxiety. When are we getting home to see my show . No child today has that experience, first of all, already. But the new dimension thats going to come into that is the devices, right . More than just the traditional set on the home, but the ability to get to all these other things which is why you see people talking about software and ip meaning if i can begin to speak the language of all computing devices, then i can begin to port my experience to all computing devices. And that will give the consumer dramatically more power to choose time, place and manner. You know, i love homeland. I havent seen sundays episode yet. Ive heard people talk about it. But im picking and choosing when i want to see it. I was busy last night, so i didnt watch it last night. Redskins were on monday night, go skins, i much preferred to see this. But tonight, slower night, i might watch it tonight. And thats just what a dvr does for me. When you start to have the ability to command content more fully, as i think jeffs talking about, things will look a more like that. But what i will say is i dont necessarily agree with just as a tv watcher more than a policy analyst, i think people still love discovery. I dont mean just the channel, i mean the ability to find surprises. Every month or every year i giggle a little bit about some show that people are suddenly talking about that i dont think you could have ever imagined choosing. Okay . If you come to me and say, mike, i want you to choose Honey Boo Boo or the show with the duck guy or certain food channel networks, i dont think that if i had to predetermine that was my preference, i would have ever picked them. But the ability to stumble on them or to hear people talking about them and let me go into an environment and go kind of dabbling around in that and suddenly find you know what . I sort of like Honey Boo Boo and now im watching it, i stillty thats a huge part of the American Television experience, and i think it gets sold short when we get sort of tech no ecstatic talking about anytime, anywhere, now. I do still think a lot of americans love the enjoyment of escapism and passivity and being able to just kind of roam around the tv jungle finding things today doesnt know were there. Host also joining us in our conversation is lynn stanton with telecommunications reports. The point you just made about discovery, how important a role do you think social media will play sort of intermeshing with your tv experience going down the road . Guest i think thats a great question because, um, if you think about social media the way i do, its just conversation. Its has always been an television has always been an k. Its not always ability that moment youre watching it and the credits roll on your favorite show, breaking bad, home ranld, you have an immediate emotional enjoyment. What do you really want to do . I want to pick up the phone and call my stir to see what she my sister to see what she thought about the final scene. I dont know about your offices, but in our offices one of the first things that happens at Staff Meetings is, hey, did you guys see so and so last night . The conversation is an enormous component of the full experience. And so i think social networking is a brilliant invention in the history of technological inventions in communication because it allows grouptogroup communication in a really efficient way that other communication tools couldnt. So now i dont have to wait to call up my sister. I see her do it all the time. Oh, post from linda. Boy, i cant believe that claire danes did that, right . And that launches a conversation. I think most executives would say the social phenomenon is fueling the golden age of television, playing a very important and complementary role and providing new opportunities to make it even better. Do you think people will be designing their own television experience through social media . You might have your friend, their Facebook Page or whatever the new facebook is in 10, 20 years guest yeah, yeah. Theyre saying you should be watching Honey Boo Boo and this, you know, dog championship show and this food show, and ive somehow managed to link them all up and, you know, just click on my page, and whether theyre doing it through piracy or theyre doing it through micropurchasing or theyre doing it through this is the way, you know, programmers are suddenly seeing to connect to more viewers, and theyre licensing through that with micro guest yeah. Yes, but some of it, i think, takes probably longer and is more complex than we think, and i also think we shouldnt assume lightly that all of that will be enjoyable to consumers. I do think sometimes you see a consumer backlash with i am being too intimately tracked, i am being too stalked, you know in the president ial election of 2012, i began to feel creepy, the degree to which political candidates with their big databases were hunting my every move. And you know what . At some point recommendation engines and stuff like that or your friends telling you to like something, you like. At some point i believe it crosses a dark chasm in which you feel a discomfort with the degree to which youre being watched and tracked. And i think thats part of what the privacy debate about, its not so much just privacy, its sort of where is the balance before you get to the creepy factor that you dont like. So metadata and big data will make that possible. What the consumer responds to, i think, is far from clear. And the last thing, theyre already doing a version of that because nielsen and other data tells us a lot of people plop on the couch, they turn on the tv, and they open their ipad or their laptop. And theyre having dualscreen experiences, and theyre not watching the show, they are doing something that they find complementary to what theyre doing. It may be christmas shopping, but it also may be when the show 24 was on, my favorite thing to do was watching the show while watching the 24 blog because there were so many hidden things happening in that show, it was really fun to have someone say did you notice jack bauer just fell 40 feet up the building, but he walked up three flights of stairs you know . These kind of funny elements you never would have known, and i found that enjoyable. My wife found it odd, but youll see things like that. Host well, Michael Powell, with the tracking that you mentioned, when you look at the future of tv and advertising, what do you see . Is the 30second ad going away . Is it are we going to see a new mode of advertising . Guest well, i think the present already answers that. The new mode of advertising is there. When i was talking a moment ago about the stalking, youre essentially talking about advertising. Youre talking whatever the purpose is for, whether political purposes or selling a product, the ability to track and create a come composite of d a composite of my preferences and my travels through Digital Media certainly has created a form of advertising that has a high degree of metrics and specificity in a way that Television Advertising never did. I mean, Television Advertising is a great thing to a degree, but its always been an odd thing, right . If youre procter gamble, you run an add, its very hard for you to know how much the ad works, you know . You ran it, some creative groups say you did a great job, you love the looks of it, then you run out and do consumer surveys to see if people were impacted. The internet provides much many or realtime answers to those kinds of returns on investment questions. And so i think you see advertisers chasing a lot of Digital Advertising because they learn more about the effectiveness of their messages. But dont count the tv ad as dead. I think the tv ad has to become more entertaining. And when it does, its mini tv. I mean, i think its hilarious that the super bowl is as much a parade of Television Advertising experiences as it is a football game. Why . Because thats the day that advertisers go for it all. They put their bestcreated, their most interesting ideas. What i think is happening is the super bowl is expanding into the air. If you really want me to buy doritos, okay, in july, youre going to have to start showing me stuff again, its a really fragmented Attention Span that captures me like the super bowl. I think from an entertainment value, youve got to get my son whose world is so infected with media, right . How do you get out of that noise flow and get his anticipation . Attention . Humor, other things that go viral. You know, youve got to get him out of a big, cacophonous space. It sounds like youre still talking about mass media kinds of advertising, though, on television. Guest yeah. Do you think maybe not in ten years, but in twenty years well reach a point where Cable Operators can serve up individuallytargeted ads based on what shows theyve been watching the way the internet can sort of track where youve been . Guest i think the short answer is therell be no technical limitation to being able to do that. Then itll just be a behavioral decision whether to do that, if thats a relationship with your consumer that youre comfortable with or not. But think about it, thats exactly what happens on the web, right . If i go to amazon right now or if i go to cnn news. Com or cspan. Com and you do it exactly the same time, we very well may not see the exact advertising. If you go to aol. Com, i guarantee you we will not see the same. So if you think about wheres tv going, back to our first point, software, ip, metadata. The line between tv distribution and internet distribution becomes a lot fuzzier. What youre able to do in the internet model you certainly will be able to do even if the capable model is proprietary or private in some degree. The basic mechanisms will still be there. We could know, if it doesnt creep you out, what youre watching at the moment, whos doing the watching. You know, xbox has an application outta theyre experimenting with which when you walk in the room its little system looks at your skeletal frame and knows that its you and not your son. Thats fascinating. But the minute you can do that, right . If my sons watching tv, tucked change what you could change what he sees. Thats a simple step. I do think youll get there. The question is in the dialogue between producers and consumers wheres the Comfort Level in that relationship. And thats the more important point. It sounds like youre thinking more about that Comfort Level and that creepiness than maybe netflix is with this new push for this video Privacy Protection act approach that would allow them to get your permission once as a consumer guest yeah. To share your information with, apparently, anybody, you know . It could be on facebook, i think is where their initial push is. But, you know, with your permission they could use it in ways that maybe people would find creepy, or maybe even the facebook thing would seem creepty. Do you think theres Something Different about the cable culture that has you thinking about the creepiness factor . Guest yes. No, i like that question because sometimes you are where you came from. And, uni, theres a lot of you know, theres a lot of convergence going on in communication. What cable does and what facebook and google does is getting more like this than like this, right . But the reality is they come from very different foundational places. We have a very secure, trusted, um, expensive relationship with the consumer. We take your money, and we know that that momentum, you know, when youre at the point of sale, one, theres always a certain grumpiness about that. Im the guy who asks you to send your money in today. I come into your home literally, physically i have a guy who comes into your home to install something. I have a relationship with you that depends on a really high degree of trust is so that you find that subscription worth paying every month. I have to protect your comfort with that relationship to a much greater degree than i think some of the Tech Companies have to. Um, a lot of times, and i dont mean this disparagingly, youre very transactional on the internet. The internet at one point had a lot more experimentation with subscriptionlike models. When you have the subscription model, you have a trusted relationship with your customer. Most of the internet has blown past that. We dont do rss feeds anymore to web pages. Very few products are offered in subscription unless youre an incumbent News Organization like New York Times or something. Most of it is just who lands here, for what purpose. I get paid if you purpose the click. If you push the click. I dont want get paid if you dont push the click. I dont really care i hate to say it this way, but at some level dont really care what you like whats there or not as long as you do the things that cause the monetary machine to turn over. And thats just a very different approach to the consumer than were required to have, and i think were a culture thats more conservative about that than those cultures. You know, Mark Zuckerberg who, you know, one of the countrys great pioneers, i think hes made no secret. Many of them come from a philosophical standpoint that information was meant to be free, it was meant to be available to all people all the time, and its one of the reasons theyre in this neverending, iterative battle with Government Forces about where the line is. Because i think theyre very comfortable that there is a very thin line. Um, i understand the argument, but i dont know that thats going to comport with most peoples views or not. Host Michael Powell, lynn stanton brought up micropurchasing earlier, and one of the current hit shows is downtown abbey. If people want to purchase that on amazon or via netflix, however, they can, and they can watch the series, and they dont have to have subscription tv. Its a pbs series, but you could do that with homeland or another one of these series. How is this ability to micropurchase going to effect the cable industry in the next five, ten years . Guest yeah. Its im not entirely sure, but ill tell you some of the things weve seen already. You know, when this first started, when itunes first struck a deal with disney and others and people predicted the end of television or people predicted tivo was the end of television, people predicted, you know, dvr and skipping commercials what have we really seen . I think weve seen the appetite for television more dramatically stimulated, not retarded. Its actually the opposite. And i think its because, you know, if im able you know, somebody comes to me today and says have you ever seen breaking bad, my answer would be, no. Oh, you really should see this show. I should . No, its great. And by the way, what im really saying to you is you are my friend, and i want to talk to you about it. And what i can do now is i could go home tonight, i could go to itunes i dont know if that particular show is there or not, so forgive me the specifics but i could go, you know, to itunes or hulu or voodoo or roku or the network site itself sometimes, and i can catch up. And can go back to you tomorrow as my friend and say, you know what . You hear this conversation every day. I got through the first season over the christmas holiday. Now we can talk. But, by the way, im dying for the fist episode of First Episode of downtown abbey, right . Totally knell love fell in love with the series. When i got tuned into it because everybody was talking about it, me and my wife sat dutifully and plowed through it, watched the Second Season because we wanted to be in the contemporaneous conversation. And by the way, it was so good, who wanted to go that long and not see it . And right now id give anything to have my hands on season three no matter what their timetable is. And i think that we often dont talk about the windows element of content, right . The key is everything now is available to everyone somewhere. Really the only issue is when and for how much. If you want to wait, if you were willing to watch everything you want to watch 912 months later, you could watch everything without these platforms. Certainly, most of the market but the thing is, i dont think were that patient about it. The average viewer is that patient about it. Why . Because you dont get to be in the conversation. And youre underestimating the power of that conversation. And so certain marquee series, yes, you could go back. I dont meet a new friend and say have you never seen the wire, right . Itll never run again. But if you let, if you let the sunset on your life and you did not watch one of the most brilliantlywritten series in the history of television, ill say shame on you. I know friends who go back and plow through five seasons. Why . Because the cultural references and the power of what happened there has made its way into, you know, what it means to be up on cultural things. So depends on the show. Theres some shows, i guarantee you, my wife loves. If two weeks go by and i didnt see it, its gone. I dont, i dont im not going to go back. I love parenthood, for example, she loves parenthood, its a great show. If i miss it two or three weeks in a row, i rarely would go back and pick it up. But other shows i couldnt possibly not. Its not a criticism on the show, its just the nature of how i consume it. The cost of programming keeps rising for the members at ncta, especially sports programming. When do you think we reach a point where that driver starts to exceed the ability of the broad masses of people to pay for it . Guest yeah. Yeah, i think this is the billion dollar question, and i would tell you that i think different leaders have different views about when that is. Um, the one thing you cant really argue with, by the way, even if you were to concede that all sides are being rational. For example, i dont think you necessarily have to make anybody a villain to have this conversation factually. But if you just took [inaudible] by other programming costs, you look at their rise over time, and you look at the rise in subscription Revenue Growth over time and you see this happening. And you see this happening for the foreseeable future. Maybe that, and the operator has very little choice but to either absorb which they have been doing to some degree or pass on to consumers who are still recovering from a painful recession, first and foremost. Is there a point at which they say i cant handle it anymore, theres no more ability to absorb these costs, and the whole model has a problem . I cant control that the nfl has the power to demand a 73 increase for monday night football which i find astonishingly insane. Right. Guest i cant believe Alex Rodriguez makes 250 million a year to play baseball, but he does. And by the way, there are enough americans with an intensity of passion about these things, you know, you go to new york, i got yankee family members who would pay half their mortgage to go see the yankees in the world series. Its just a reality of the of value of a lot of content that gets pushed through the system. But we all ought to wake up and be careful, i think, programmers and operators about how we manage our relationship with each other and out of a fiduciary respondent to the consumer responsibility to the consumer so we dont blow this into smithereens at some point and invite the government to come do it for you which i think nobody would be a winner. Host Michael Powell, scott [inaudible] hope i pronounced that correctly, Vice President agencies coe, predictions on the future of tv. Number one, channels will go away, remotes will o go away, and we will have screens everywhere. Whats your reaction to those predictions, and how does that affect the current cable Business Model . Guest hmm. We will have screens everywhere. Im not so sure we dont already have screens everywhere. You know, you go you know, the typical American Household till has three tvs still has three tvs and probably growing. You know, when i walk to work in the morning, there are video screens on the sides of of bus terminals, theyre in metro centers, so well see them more and more. Thats an easy one to subscribe to. I dont know what it means to say there are no channels, because im not sure i do agree with that, because im not sure i know what he means. But any system of curated content requires some organizational ski ma, right . You dont go home and take your kitchen drawer and throw all the stuff in a big basket. You put your knives in a folder, and you put your spoons i hope, maybe you have one of these where you just but, you know, organization, cure ration is itself an art. And, you know, the idea that just mashedup cacophony is a virtue i dont agree with. I mean, i think, actually, we have lost the art of curation in some of our zeal around the internet. I always say in the way i say the friends and families about photos. You know, in my adult life i can take, ive probably taken hundreds of thousands of pictures in a way that i couldnt have on previous technology; digital cameras, cell phones, all this stuff. Sometimes we unload them to the computer, increasingly we dont. Um, i go and look at my i photo account, there are thousands of pictures there. They increasingly make no sense to me. Ill tell you what, when im 80 years old and sitting on the couch and want to look back over the meaning of my life, it isnt going to be to open up a computer and plow through 14,000 photographs. Its going to be the specialness of opening an album that someone has carefully selected the representative moments of when i was 7 and 12 and when my mother took me to the zoo, you know . Thats where humans derive meaning. And i think the art of curat irks on and editorial discretion is still worth fighting for. Because i dont believe like sort of the technoorgasmic view was that massive amounts of informs is nirvana information is nirvana. I do think people want simplicity, and i think they want some control that has meaning for them. Now, television through channels is able to kind of parochially separate are you in the mood for history tonight . I can tell you where to go to do that. Are you in the mood to learn how to make christmas dinner tonight . I can tell you where to go to do that. Some version of that whether its the traditional channeling, i think, has to exist. On the remote control, ill be the first one to like to throw mine. But thats right because what he really means, i think, is that well interface differently. But we will still have to interface. Its still a machine, and youre a human being. And until somehow were exactly the same thing which i dont have any hope for i have to communicate my needs to this device. Im either going to have to touch it, speak to it, push a button, do something. So that will be the remote control, whether its not going to be what you see today. But there is going to be some mechanism by which i talk to a machine, and a machine understands me. Host and weve been talking about the future of television with michael paul, president and ceo of the National Michael powell. Lynn stanton Senior Editor at telecommunications reports, thank you both. Thank you. The communicators also airs each monday night. If you missed any of this program with ncta president Michael Powell on the future of television, you can catch the communicators again tonight, 8 p. M. Eastern here on cspan2. 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