The Web's New Wasteland

The rush to match television programming with the Internet is short on user-friendliness.
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Bill Gates doesn't like television very much. Before moving into his $100 million home in Medina, Wash., he made a point of unplugging all the receivers in his TV sets so he could watch movies on videotape without getting sucked into trash TV.

So you can bet his new, pathologically fancy home theater is impervious to episodes of

CSI: Miami

, let alone those grating

Aflac

commercials.

But as

Microsoft's

(MSFT) - Get Report

chairman, Gates has different plans for you. Yes, sir. Big plans involving video -- all the time, everywhere you go, whatever you do. There will be no escape.

At least that's the idea that comes across from Gates' keynote speech at the Consumer Electronics Show last week. As someone with a chronic phobia of channel surfing, Gates presented a dark, dystopian view that sounds like Big Brother in reverse: Instead of always being watched, you're always watching.

At the breakfast table, Gates said, you can look at images of your children's drawings, in case talking to them is too stressful. He imagines family members tracking each other's locations on virtual maps -- overriding cherished notions of privacy and trust. "We're able to track everybody and know what's going on," Gates said, without apparent irony.

When a major storm wipes out your supply chain, Gates said, you'll have the consolation of watching the destruction on screen. Watch the storm on a Tablet PC, and again on your cell phone driving to work, and again at your desk.

A recent workplace study found people are interrupted in their offices once every 10 minutes, and Gates wants to speed up that rate by dragging you into a virtual conference at your superiors' every whim. Your life will be lived inside a screen -- one that will even notify you of a traffic jam caused, no doubt, by some clown watching video on a cell phone while driving.

OK, I'm exaggerating a bit. If you look at Gates' actual speech, his tone was actually chipper, attempting to inspire excitement about the death of downtime, which he imagines happening in about four years.

But it makes clear a troubling trend that is emerging as the

Internet and television transform each other: Everyone is striving to make content and communication ubiquitous, but the quality of today's content -- and the nature of communication -- isn't that good.

So, why should it necessarily be ubiquitous? Everyone complains of pointless meetings -- why enable more of them? Viewers distrust news programs and despise bad sitcoms -- why make them more accessible?

This will become a serious problem for media and tech companies -- and their investors. Just as in the late 1990s, when companies rushed to install fiber optics that years later remain dark, other companies today are building a media infrastructure with little thought to how people will use it. If consumers don't like what they watch or how they're watching it, they will rebel.

This is already happening on a small scale. Last week,

Verizon

(VZ) - Get Report

unveiled its music service for mobile phones, trying to move into a digital-music market cornered by

Apple

(AAPL) - Get Report

. But bloggers quickly discovered that the service disabled phones from playing MP3s, and they kicked up a fuss. Similarly,

News Corp.'s

(NWS) - Get Report

MySpace unit alienated members after reports that MySpace was deleting references and blocking access to rival sites, such as the video-swapping upstart YouTube. These are only two instances in the past week.

What Verizon and News Corp. have yet to learn is this crucial lesson: The companies that will win out in this competitive market are those that are the most farsighted about not simply getting content to users but letting them use it in an intuitive and hassle-free way. It was this approach that let

Amazon

(AMZN) - Get Report

and

eBay

(EBAY) - Get Report

rule in online commerce.

Take the imminent battle to be fought over which standard will prevail in digital-rights management -- that is, the technology that aims to restrict when and where video and music files are played. Today, Apple,

Google

(GOOG) - Get Report

,

Yahoo!

(YHOO)

, Microsoft and others all have conflicting DRM standards.

Which one will emerge victorious? Most likely, the one that gives consumers the greatest flexibility: Currently, many of these DRM technologies are designed to lock users into a relationship with a single company.

There are other ways to gauge which companies are positioning themselves smartly. Another early test will be in the imminent scramble to forge partnerships, as Yahoo! has with

Motorola

(MOT)

and Google has with

CBS

(CBS) - Get Report

. The stronger a company's initial partners are, the better its chances will be.

After that, consumers will probably look for the most compelling value proposition. It may be Google's system to let producers set their own prices. It may be the monthly subscription that Yahoo! and Microsoft have adopted. Or the flat fee, such as Apple's $1.99-per-download program.

Right now, I'd have to say the strongest candidate of all to win this race is Yahoo! Its monthly rates for music and videos are low, and its content offerings are broad. It has had deep and longstanding relationships with content providers, while building the trust of small, independent content creators. And its careful study of its users online habits give it unprecedented insight into how to make video content something desirable -- not something to be feared as in Gates' hellish vision.