To understand the future of TV, look in your pocket

The future of TV is a hotly debated topic. And while consumption of TV content has increased (Nielsen reports that the average American watches almost 34 hours each week) in many ways TV has resisted many of the technology revolutions that transformed other industries. These include the Internet, the advent of mobile and social and the “UI/UX is everything paradigm shift.” With newcomers like Google(s goog), Apple(s aapl)  and even Intel(s intc) now looking to disrupt the status quo, how can we try to model the future?

What if I said, “Just look to your pocket”? The evolution of television parallels another industry in an eerie way: the mobile phone evolution. Hear me out:

In the early days of mobile (which was not so long ago), various device manufacturers (HTC, Motorola, Nokia) and service providers (AT&T(s t), Verizon(s vz)) tried to develop their own ecosystems around their brands. Fragmentation was the name of the game: mobile developers had to develop in Symbian, Java(s orcl), Windows(s msft) Mobile and Brew, and customize apps for different screen sizes, device features and even carriers. The carriers tried to “own” the customer and sell additional services and content, using clunky technology like WAP. This was the world before iOS (and later Android) came in to create a simpler ecosystem for developers and a great user experience for the customer.

This isn’t so different from television today: We see device manufacturers sell “connected TVs” that run their own proprietary OSes with their own customized app stores. The MSOs or multiple service operators (the operators of cable or satellite television systems), like the wireless carriers of the past, try to own the customer through “TV Everywhere” solutions that tend to be subpar. It’s unlikely that these solutions will hold in the long run.

The complexity of content

The true future of TV—a meaningful revolution—will require the integration of a great user experience with painless access to content. We’ve seen it happen before, when Apple changed the music industry with the IPod, and again when it changed the mobile industry with the iPhone (the apps were the content), and one might argue that Google did the same thing for web content and Facebook for personal content. However it’s not so easy to do that with television for the following reasons:

TV content is extremely difficult to access: Six companies (Disney(s dis), Viacom(s via), Time Warner(s twx), News Corp, CBS(s cbs)  and Comcast(s cmcsa)) control 90 percent of American media. These content owners refuse to sell content a-la-carte and force the despicable pay-TV bundles.

Obtaining content rights is extremely complicated and expensive: For example, ESPN pockets $6 per cable subscriber, regardless of whether they watch sports, which adds up to $7.2 billion a year. Even tech giants like Google and Apple will struggle to pay such amounts annually (especially as a non-R&D spend.)

Creating original content isn’t easy. It’s hit driven, it’s expensive (which explains why the less-costly reality shows and talk shows rule the airwaves), and it is built one show at a time. And, while we’ve seen quality programming developed by Netflix, Amazon, and YouTube they simply can’t compete on volume.

So how will change come about? It will happen when the content owners are forced to break their existing profitable model. This will only happen when enough people abandon expensive pay TV bundles to watch content online (a behavior termed “cord cutting”) and advertisers stop paying obscene amounts for TV ads.

For cord cutting to become mainstream there needs to be a surge of quality content available outside of pay TV (This is not happening yet: while Netflix(s nflx) and Hulu are doing well, pay TV subscriptions are not declining.)

Simultaneously, the bundling of pay TV with broadband Internet would need to be less attractive (this bundling is controlled by the MSOs who own “the last mile.”) But something will trigger it. With music the trigger was the transition from discs to MP3s and the rapid rise in piracy that allowed Apple to innovate. But the important takeaway from the iPod revolution is the reminder that when these changes do happen, they happen fast.

Consumers and MSOs will win

Ultimately everything will unify around a limited number of new underlying platforms that will serve both the UI as well as the content. These platforms will be closely integrated with mobile devices, so Google and Apple (and maybe Amazon(s amzn) or Microsoft) are well positioned to play—and someone will certainly win. The MSOs will go the way of the telecom carriers and become delivery pipes. There’s no need to feel sorry for the MSOs, though: Unlike mobile carriers their geography-based monopolies will mean they enjoy a larger share of the pie.

And consumers will win. It may take some time, but eventually they will have easy access to compelling content rolled into an amazing user experience.

Amit Karp is a senior associate and Paul Lyandres is an investor at Bessemer Venture Partners.