According to The Cross Platform Report by researcher Nielsen, United States viewers still spend around four hours a day watching TV, barely down from record highs. Does this make the battered shares of Seven, Nine and Ten cheap buying for potentially-rich stocks? No. Australian television broadcasters are at the very same tipping point newspapers reached a few years ago, just before their problems became near-terminal. While new technology is already eating away at TV's margins, faster broadband speeds will demolish the business model altogether. High speed internet that can deliver high quality video on demand is fast becoming the norm in developed countries.

According to a report commissioned by Britain's Office of Communications, “smart” or “connected” television sets - with broadband connections capable of streaming on-demand video - will be in over half the nation's homes within a decade. In Australia, smart TVs will roll out as quickly as the NBN. That looks unlikely to be at breakneck speed but it should be within a decade, too. The much talked about “digital convergence” is about to become a reality, making the business models of free-to-air TV much less predictable and perhaps destroying them altogether. Viewers will soon be able to access information and entertainment in any form on any device they wish. Just as you can now read a newspaper on your computer, soon people will be streaming video content to their TV, from a diverse variety of providers, not just conventional stations.

Today's technologies and interfaces are still fiddly, but they will improve. And they are already being increasingly integrated with social media, particularly Facebook and Twitter. The reason this is a big deal is that once streaming on demand is ubiquitous, free-to-air TV's last bastion of profitability will be the lazy viewer. The rest of us will have our social networks suggesting what we should watch, from a far wider range of sources. The newspaper business model was upended when readers could go online and cherry pick stories from media organisations and bloggers the world over. The same is about to happen to television. Most of us can't be bothered searching for a new program to watch. We just crash in front of the telly and take what's served up. If we don't like it, we switch channels. The TV networks have a captive audience, but they are about to lose it. The internet can do a much better job of satisfying our cravings, for very little effort.

Spotify already tells me what music my friends are listening to and has introduced me to artists I wouldn't have found myself. Once your television starts telling you what's popular amongst friends and other like-minded people, it's goodbye to sloth profits for the free-to-air television networks. How long will it take? The wave of destructive change takes longer to build than most pundits expect, but the demolition itself is surprisingly quick. The technology is ready. We're ready. All we're waiting for is faster internet speeds. And that's about to arrive.

Video may not have killed the radio star. But the NBN is about to kill the television station. Steve Johnson is chief investment officer at Intelligent Investor Value Fund, and will be discussing his investment strategy at Intelligent Investor's national roadshow that features guest speakers Erik Metanomski (Adelaide only), Peter Wilmshurst (Melbourne only) and Kerr Neilson (Sydney only). BusinessDay readers can enjoy a free trial offer of Intelligent Investor, or take advantage of this special offer to gain access to a new portfolio boasting some of the cream of stocks and opportunities listed in Australia and abroad. For more Intelligent Investor articles click here.