That why I specifically said that it’d be slow and painful. This isn’t going to happen all at once; sure, there may come a tipping point, but at the moment you’re right: most of the money is still in the traditional model. And while nobody has yet come up with a solution as effective as the ad-driven system, that doesn’t mean nobody will. Before iTunes, nobody had found a truly effective model for selling digital music online. Today, less than five years after its inception, iTunes is the #3 music retailer. The networks haven’t found their iTunes yet—witness NBC flailing around, partnering with everybody under the sun (except for Apple, having withdrawn their content from the iTunes Store) in a desperate attempt to cover all their bases.

And while companies do have that obligation to maximize their shareholder value, if a system was found that was more attractive to consumers, it would certainly have the potential to increase shareholder value. If NBC and other networks end up having to refund more money to advertisers, then that traditional model is going to come under assault.

Perhaps “dying” was a bit hyperbolic; I do think that the current transition and challenges from the online market will have an adverse effect on the traditional way of doing business at some point, and if the networks don’t adapt, they will find themselves losing both money and relevance. Again, I don’t think they’ll keel over tomorrow, but hey, we’re still in the middle of the most serious disruption of television programming in twenty years and how this plays out will clearly have a major impact on the industry. And the issues at stake there are related to this future of television content on the Internet.

1. You should check out the Convergence Culture Consortium‘s weblog, where they discuss the issue of ratings effectiveness regularly.

2. The current dominant models of music sales and TV programming/scheduling (i.e., viewer sales) may not be palatable to those of us who have had a taste of the alternatives—but why do you assume that this promises “a slow, painful death” to networks? Part of the reason they haven’t changed this model is that this is still where the most money is for them. There are other models that would probably please audiences more, and they could certainly capitalize on other distribution methods more effectively than they do now, but at the end of the day, nobody has really come up with a suggestion that would monetize audiences as profitably as the present advertiser-driven system. (Whether Nielsen ratings should really be the foundation upon which this system is built is another matter entirely.)

Publicly traded companies will never settle on “good enough”—it’s their legal obligation to maximize shareholder value. Switching models now doesn’t come close to being worth it to them even as they look long-term, at least until somebody figures out a way to squeeze a great deal more cash out of those of us who are pretty used to watching our television commercial-free and without spending a penny.

Also, as the fake Daily Show sketch indicated, it’s not as if the TV corporations aren’t monetizing online stuff at all—they just don’t want to share with the writers. There may be a day when NBC simply can’t promise advertisers the ratings it has always promised, and so it will have less money and may see a larger proportion of its revenue coming from other sources (online, DVD, etc.). I’m not sure how that equates to “dying,” though.