What Will TV Do When They Come For You?

As the newspapers fold their tents, don't kid yourselves that the traditional television networks aren't next. The clue is found in the dirty secret of Nielson ratings and advertising rates.

Hulu alternatively is the anti-Christ and savior of the television industry as more and more of the prime demographic watch their video content at a keyboard devise rather than a 4x3 cathode tube.

The networks behind Hulu -- principally NBC but also Fox -- have embraced the horror with their very clever Alec Baldwin promo commercial.

Unfortunately, the bean counters do not. The advertising rates at this time for impressions given are dangerously out of balance.

Dare we say, Fannie Mae-like in their inflation of value.

Oh, not for Hulu. Click through is click through -- extremely quantifiable.

For the teleo-cable industrial complex. Nielsons and other ratings are interpretations of an audience based upon a sample, then transmogrified into huge audiences.

Like the value of that San Francisco walk-up, it's only worth a million if everyone agrees to suspend belief and say it's worth a million.

And there's really 28 million watching that program, because we all -- advertising industry, media, content providers, producers -- want to believe they 28 million sets of eyeballs are there. Unless the cable boxes and TiVo feedback penetration is much greater than we have all been led to believe -- they really are watching what your watching, whether you permissioned it or not -- then this formula continues to require a suspension of disbelieve to continue.

So the same show getting 100,000 Hulu click views is given far less value -- and revenue -- to NBC than the same show that gets a 1.2 share in the ratings.

If this bubble bursts, this crash will be dramatic; it will be catastrophic and make the collapse of legacy newspaper publishing look like a graceful departure from the stage. See, newspaper really began to hurt when the classifieds went, followed by display advertising and off we go with the whole whale-and-plankton analogy. It takes a lot of money to operate television in its legacy mode.

The value of television advertising may prove to be a Potemkin Village. If that ad stream dries up, or jumps down-scale to IPTV, there is nothing, nothing standing in the way of Chapter 7 for the over-the-air legacy stations and networks. Like newspapers, at least cable outlets can gain some money from subscribers.

Of course, this all may continue for some time. Sort of like the value of a dollar bill. It's worth is only what we all agree it is worth; intrensically, only the faith we have in it.