The past five years have presented major changes in the TV industry such as extensive, free video-on-demand catalogs and time-shifting with digital video recorders. But TV is about to undergo an even greater transformation from black box service to experiential TV, or ETV. The next wave of TV services will continue to evolve from live and linear to on-demand with multiscreen access. New carrier-managed IPTV services, devices such as the Slingbox and Internet-delivered “over-the-top” video sites such as YouTube are early examples of the revolution.

Unfortunately, today's TV services operate within a fragmented set of distribution silos such as cable TV, managed IPTV, OTT and mobile TV. The service capabilities, pricing and digital rights issues vary between each distribution channel. Reminiscent of debates about voice over IP replacing landline voice, the TV industry fears the business model changes that the Internet enables. But similar to the outcome in the voice world, OTT content will displace only a portion of existing pay TV subscriptions. All the channels will coexist going forward, making this the TV industry's opportunity to learn from the mistakes made in the voice industry. Operators must advance a vision beyond multiroom DVRs and thousands of VOD titles to an integrated distribution strategy that creates richer experiences by combining the unique attributes of these various channels.

This new world of ETV allows consumers to create personalized entertainment delivered across numerous devices and networks. Instead of treating each channel as its own entity, ETV will integrate the benefits of Web or mobile delivery into the TV experience. ETV differs from today's TV services in three ways. First, it will offer better navigation and personalization. This starts with customizable program guides, but it can extend to unique entertainment profiles for every household member. Such profiles will capture the content that users want and note how they want to interact with it. Better navigation begins with enhanced on-screen search but adds other modes, such as voice-enabled search via cell phone, delivery of search results from the provider's Web site to the set-top box, and the use of a device that could resemble a Wii game controller for a remote.

Secondly, ETV will deliver user control with viewing experiences that are appropriately matched to the device and the network. Operators must advance today's time- and place-shifting of content with new user interfaces that allow consumers to control and consume content on their device of choice at their location of choice. Today's vision of programming your DVR from a cell phone will extend to sending programs to a friend's house or a hotel room TV. Programming also will offer different resolutions and formats to meet the demands of anything from a 2-inch mobile phone screen with a slow connection to a 42-inch plasma TV. New styles of content also will be created for specific channels, such as “minisodes” for mobile TV and interactive programming for the Web.

Finally, ETV will incorporate professional content, user-generated content, community features and the ability to create mash-ups. Hulu.com is the best example of this. It lets users share full pieces of content, create clips, embed video in Web sites and share videos through social-networking sites such as Facebook and MySpace.

Business model challenges, digital rights issues and technical issues must be tackled before this becomes reality. But operators must embrace a new vision of TV to understand what needs to be changed. The revolution is being televised on the Net. How telcos and cablecos respond will indicate the future health of their businesses.

Maribel D. Lopez is CEO and founder of Lopez Research.