Actor cites Game of Thrones and Breaking Bad as examples of modern triumphs, but rails against shift towards conservatism

TV has entered a "third golden age", with the small screen now home to high-quality drama including Mad Men, Game of Thrones, Homeland and Breaking Bad, one of Hollywood's best-known stars has told the Edinburgh Television Festival.

Kevin Spacey, who started out on the stage before winning Oscars for The Usual Suspects and American Beauty, said on Thursday that the medium had come into its own as an art form, eclipsing film in terms of character-driven drama.

The third wave of success followed broadcasting's early burst of innovation in the 1950s and a second creative high point in the 1980s, with the likes of Hill Street Blues, but he warned that a fear of risk-taking and the "warp speed" of technological change could leave programme makers and broadcasters behind.

"Our challenge now is to keep the flame of this revolutionary programming alive by continuing to seek out new talent, nurture it, encourage it, challenge it, give it home and the kind of autonomy that the past and present … has proved it deserves," he told the audience of TV executives.

Spacey's praise for television comes in the wake of his own high-profile re-entry into the medium, starring in and producing the US remake of BBC political thriller House of Cards, which appeared online through Netflix earlier this year.

He criticised US TV networks' obsession with piloting shows before committing to a full series, saying this forced writers to establish characters, create arbitrary cliff-hangers and prove their concept will work and attract an audience in just 45 minutes.

Breaking Bad: 'given time to develop'.

The actor, who is artistic director of the Old Vic theatre, contrasted this approach with cable channels such as HBO and AMC, which gave shows including The Sopranos, Breaking Bad and Mad Men time to develop creatively over several series and build an audience.

He added that he and fellow House of Cards producer David Fincher pitched their series to all the US networks, but all wanted a pilot – so they went with Netflix.

"We wanted to start to tell a story that would take a long time to tell. We were creating a sophisticated, multi-layered story with complex characters who would reveal themselves over time and relationships that would take space to play out."

The first actor to deliver the prestigious MacTaggart address to the festival in its 38-year history, Spacey is currently working on the second series of House of Cards. The $100m first series was nominated for nine Emmy awards in the US, the clearest sign yet of the shifting balance of power between traditional broadcasters and their digital competitors.

He said Netflix, the internet video-streaming service that makes entire series available to watch in one go and has 1.5 million subscribers in the UK (and about 38 million worldwide), had proved one thing: "The audience wants control. They want freedom. If they want to binge – as they've been doing on House of Cards – then we should let them binge.

"We have learned the lesson that the music industry didn't learn: give people what they want, when they want it, in the form they want it in, at a reasonable price, and they'll more likely pay for it rather than steal it. Well, some will still steal it, but I believe this new model can take a bite out of piracy."

But if the medium was to continue in this rich vein, TV executives would have to adapt to the way viewers want to binge on their favourite programmes on the internet or by watching DVD box sets, Spacey said.

Younger viewers no longer saw any difference between watching TV and online. "For kids growing up, there's no difference between watching Avatar on an iPad or watching YouTube on a TV and watching Game of Thrones on their computer. It's all content. It's all story," he said.

In a passionate speech punctuated by impressions of his hero and mentor, Jack Lemmon, and Orson Welles, Spacey said broadcasters had to take more risks and go back to TV's early days in the 1950s, when Lemmon told him there was a "sense of total abandon".

He warned of a "shift towards conservatism, away from risk-taking" and urged broadcasters to give creatives more freedom and said TV commissioners had to be "willing to take risks, experiment, be prepared to fail by aiming higher rather than playing it safe … We need to surprise, break boundaries, and take viewers to new places.

"There has been this myth of 'nobody knows anything', that making a good programme is a crapshoot," he added.

"But frankly, that's just BS. We do know how this works and it's always been about empowering artists. It's always about total abandon."