In her latest column, Media Post media market guru Diane Mermigas wonders how long it will be before we see a traditional over-the-air (OTA) broadcast TV network (like ABC, NBC, CBS, or Fox) dump their old broadcast business altogether and just move all their properties to cable and satellite TV. And, in response to Mermigas, Cory Bergman of Lost Remote argues, as I did last week, "the real future of TV is not linear cable, but non-linear video delivered seamlessly via IP to multiple devices, including your TV set. But mass adoption of this approach is still several years away."

Bergman is right. It would be foolish to think any traditional network is going to rely exclusively on IP-based distribution any time soon; they see it as more of a compliment (or another product window). But Mermigas may be on to something in predicting that broadcast networks may soon be looking to get out of the OTA television business altogether and essentially become "a glorified general entertainment cable network."

The strain on their dysfunctional paradigm is emanating from a devastating recession and the ongoing digital revolution. Both are permanently altering the rules of play for the networks. A case can be made for at least one of the Big 4 broadcast networks emerging as a glorified general entertainment cable network within the next several years. The economic advantages: more steady ad revenues and consistent subscriber fees as content is distributed cross-platform.

It would be a bold move that a free-spirited company such as News Corp. might already be contemplating for its Fox Broadcast TV Network, or NBC Universal for its peacock network. Industry analysts increasingly wonder how an independent CBS can prattle on under the crumbling old rules. In a world of exploding access and choices, the prime-time ratings (even with Live plus 3 configurations) spell diminishing returns. For Disney, ABC's general entertainment status is on par with ESPN in sports; the new multi-platform model is in place except for formally moving the ABC TV Network to the cable side of the ledger.

Such a suggestion would have been considered outlandish even just a few years ago, but now it seems like it's only a matter of time before one of the majors makes the jump to being a cable-exclusive "super-station." It's another sign of the radical metamorphosis underway in our modern media marketplace. Mermigas notes that "The most compelling argument for the Big 4 surviving as cable networks is economic":

Digital distribution is a long way from yielding the financial returns needed to offset the dilution of old-line mainstream revenues. The vulnerability of the broadcast networks' $9 billion in upfront ad revenues will be starkly evident next spring amid the protracted recession. Major ad categories-such as autos, financials, real estate and retail-will be markedly altered in their spending as well as structure. The Big 3 U.S. automakers account for 6% of the Big 3 broadcast networks' ad revenues (9% for Fox) and 2.5% of cable networks' overall advertising (7% for ESPN).

On the cost side, less than 30% of core expenses can be eliminated from program production budgets and legacy operations, which means that the entire broadcast network dynamic must be reengineered. Despite all the complications, the easiest, most efficient business model conversion would be to reset broadcast networks as general entertainment cable networks. [...]

While the most competitive cable networks have closed the ratings gaps with broadcast networks, they still fail to command similar ad unit prices. Prices have failed to reflect changed value propositions; that dilemma will be resolved in a digital marketplace. Bottom line: the alignment of broadcast and cable networks is already in place. Cable's niche appeal, parallel to the Internet's special interest "long tail," will continue to nudge advertisers, consumers and content providers toward a more fully monetized online business model.

It is my belief that this migration would have already been occurring had broadcast spectrum holders been granted flexible use and resale rights for their spectrum long ago. Unfortunately, the same old command-and-control system of spectrum regulation that the FCC put in place seven decades is still haunts us today. That system literally makes it a crime for television broadcasters to sell their existing spectrum for anything other than broadcast television. They can't repurpose their spectrum for an alternative purpose. Nor can they sell it to someone else who might put it to different use (say, high-speed wireless broadband). Just think, if they would have had unambiguous property rights in their allocation, they might have had the incentive to already have thrown the switch on the plan to migrate their content from OTA to cable and satellite entirely.

Of course, that now may happen anyway for the reasons Mermigas suggests. And the migration of more and more content to the Internet will only speed that process along. It's just a shame that regulation prevents markets from reallocating spectrum efficiently.

Finally, if the networks begin to make this jump, it raises another interesting question: What about the local broadcast television operators who are not owned by a major network? What's going to happen to them?

Interesting days ahead.