On occasion I have difficulty putting my thoughts together in a coherent, well-packaged message that informs and entertains. Sort of like that sentence. Fortunately for me (and for you), everything I think is the spawn of some other person's original idea - that's probably why my only humor comes from quoting John Hughes movies - and sometimes I am lucky enough to have access to those original ideas.
A reader sent me a link recently to a short article (really just a lengthy answer to a complex question) written by a TV executive about why networks do not provide more online access to popular TV shows.
I recommend anyone who enjoys television should read this brief essay. The executive does a nice job of explaining why you can't just go to www.nbc.com and download an entire season of The Apprentice to your iPod. I find his explanation more complete and easier to understand than most of the information I've seen on this issue, but you know I have some comments. Read the essay, and also check out the first three comments, then come back ....
So? What did you think? Yeah, I don't care. Here's what I think:
1. While the information Mr. Engler lays out is correct, I think he leaves out one important detail. Namely, that American networks have most of the bargaining power in the interaction between production studios and tv networks, at least until a show becomes a huge hit. That means that a network like CBS or SyFy can basically dictate how a show will be presented on the network - including time slots, lead-ins, re-runs, and advertisers. Long time readers (you know, those of you who've been around since March, 2010) will remember this post about programs that were canceled for various reasons, and how Fox has a tendency to kill its shows by mucking around with the air times. Thus, I find Mr. Engler's not-so-subtle "Don't blame us!" subtext a bit disingenuous. I'm confident that if SyFy wanted to show lots of streaming content, they could bully their production studios into releasing the rights. Of course, that would be a lose-lose situation for both the network and the production studio. The network would lose lucrative advertising revenue from lost viewership (don't kid yourself into thinking online advertisers would make up for it. If you think that, you probably bought a lot of stock in pets.com back in 2000), and the production studio would lose licensing revenue. Mr. Engler is dead-on about that;
2. Check out comment # 3 for Mr. Engler's article. Whoever left this comment (like me) is brilliant and absolutely correct. Television networks, both broadcast and cable, are operating under a 50 year old business model that can't keep up with technology trends. Some of you who understand how the Nielsen rating system works will instantly get this: we've been torturing tv metrics and revenue models since VHS came onto the scene in order to give advertisers and producers bad information about viewership habits. Why? So the bean-counters can prevent the collapse of the tv business model. Like commenter # 3, however, I think the long-delayed collapse is now inevitable. Networks and producers will be forced to adapt to streaming technology and the more diverse viewing habits of modern tv watchers. For more, see most of my previous posts, including this one about how we will be watching tv in the next decade; and
3. Predictably, I think Apple has a few lessons for the networks. Soon, production studios will learn that with a little savvy deal-making, they can make more money off their shows by streaming them direct to viewers. Apple saw this coming with music and got ahead of the blast zone by developing iTunes. Now Apple gets a cut from each artist without having to develop any content at all. In essence, Apple is an aggregate-or of content. Sort of like a tv network in a streaming format, without the advertisers. I wonder if anyone at Fox or HBO is paying attention to this trend? I would bet they are, and if the major networks don't have teams of business analysts trying to figure out how to set up their own streaming aggregate format - they're idiots. Idiots with very short business life-spans. Once again (I should be getting royalties for this), I'm going to plug Netflix. Can I call this? Yep ... coming soon to an XBox or Playstation near you ... The Netflix Network, with exclusive, original content. Deadwood season 4, anyone?
P.S.
Erica Durance, I love you.
Every disruptive technology creates chaos among incumbent industries. Right now television networks are trying to redefine their business models to adapt to their new-found lack of control over what consumers. . .er, consume.
ReplyDeleteSome incumbents adapt through innovation. Some through litigation. Others through political persuasion. Some just stick their heads in the sand. Look no further than Hulu, TV Everywhere. The NBC/Comcast merger. . .I could go on. In the end, consumers will benefit from improved access and a thinning of the weakest members from the incumbent herd.
It's also worth pointing out that networks -- especially the big ones -- and producers are rarely separate entities. Those days ended when the FCC abandoned SYN-FYN in the '80s. Now most networks either produce outright or have significant ownership stakes in most of their content.
I'm still not convinced about Hulu. I think the content aggregation is a good idea, but unless you are generating revenue from each streaming view it won't work. I predict a much-reduced version of Hulu in the next year as more content providers pull their programs. Why do content providers still believe they will make enough money from online advertisers to generate content? It just doesn't make sense.
ReplyDeleteOh, I'm no believer in Hulu, but for the opposite reason (I think I've ranted about this in your comments already). The instant Hulu began to hit a critical mass they fell under pressure from their stakeholders to begin charging for content. Some content providers bailed out for competitive reasons. TV Everywhere will likely fail for the same reason -- too many entrenched stakeholders with too many competing interests.
ReplyDeleteMy thinking? Those who will be successful in the new media landscape won't be any of the existing players. Consumers simply won't pay for the "privilege" of online content they can get free elsewhere, and the incumbents can't grasp the fact that they no longer control how consumers get their media (and that they're no longer the only game in town).
The winners will be the smaller players who finally figure out a business models that let them make a buck while still satisfying consumers' desire to get entertainment when they want an how. I predict that in ten years you'll see companies that don't even exist today buying out the old guard for pennies on the dollar.
I agree with The Lump. We haven't met our future media content providers yet. If anyone, maybe it's Google, but they're in the information aggregation business, not the media distribution business. But they certainly have the funds and braintrust to figure it out. Other than that, it's the next Google-esque enterprise that will be the kings of tomorrow's media. I also see Apple being at the forefront, but that's a different blog topic altogether. Blopic?
ReplyDelete