Over the past few days, two things have really started to shape my view on where the Future of TV is headed.  First, on my flight back from Miami on Friday, I read a post by Henry Blodget entitled “The TV Business is Toast.“  Blodget makes the case that the “the traditional TV industry — cable companies, networks, and broadcasters — is where the newspaper industry was about five years ago: In denial.”  Furthermore, he states that TV is headed for a fall because:

As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today’s incumbent cable, broadcast, and satellite distribution models do. As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.

And similar to what Fred Wilson recently wrote regarding Boxee, Blodget goes on to declare that in the future:

You won’t have 5 channels, or 50 channels, or 500 channels. You’ll have millions of channels. You’ll be able to watch anything you want, live or taped. You’ll be able to watch it wherever you want — TV, computer, mobile device… This is where the future is going. That’s obvious. The only question is how long it takes us to get there — and who gets killed along the way.

On Saturday Night, I saw first-hand why the TV networks might be one of the casualties of the Future of TV.  Instead of watching Prime Time TV that night, Cindy and I decided to log onto Xbox Live to play 1 vs 100.  If you haven’t heard of it, 1 vs 100 is a massively multiplayer online Xbox Live adaptation of the trivia game show of the same name.  The “Live” mode is hosted by Chris Cashman in North America and pits a single contestant as “The One” against a group of 100 that make up “The Mob”, with the rest of the players making up “The Crowd.”

Though still in Beta (it just launched June 1st), the game is already pretty remarkable.  For starters, on this past Saturday, over 70K people were playing the game live.  I say “over 70K” because 70K accounts were online.  But it is pretty obvious that 1 vs 100 is a “party game” so I guarantee that most of those 70K accounts actually had 2, 3 or even 10 people huddled around the TV playing the game.  That’s a lot of people that weren’t watching Law & Order, Harper’s Island or America’s Most Wanted on Saturday Night.

Second, this Xbox Live’s version of Prime Time is a lot more fun than traditional TV.  Instead of sitting back on the couch and staring numb at the screen, 1 vs 100 makes Prime Time an energy-filled social experience.  Web 2.0 has been successful because it helps meet the basic human need for connecting with others.  That is what Social Networking and Social Media is all about.  1 vs 100 is the blending of the best of TV with the best of Web 2.0.

And even more interestingly, it does all of that with an advertiser friendly model that includes both advertising in the form of ~3 short video ads in a 30 minute span  and non-intrusive sponsorship. Unlike traditional TV where you have 8 minutes of ads for every 30 minutes of programming, 1 vs  100 is selective with the interruption.  And even the “interruption” isn’t very dramatic since the ads appear on the scoreboard / projection screen in the game.  What ends up happening is that as a consumer you actually remember the ads.  In fact, I think I remember all of the advertisers from last night including Doritos, Sprint Now Network, and Axe Dry.  I can’t even think of the last time I could say that about TV…especially since I skip through most of them on the DVR.

What do you think the Future of TV holds?  Who will be the winners?  And just as importantly, who will be the losers in this future landscape?