There is an awful lot to follow in the television industry, and we spend most of our time trying to figure out which shows will be renewed and which shows will be canceled. While I understand that those decisions are nearest and dearest to the fans, but realistically the way renew and cancel decisions are made probably hasn’t changed much over the last 20 years.
We love TV, and numbers, so we love figuring that stuff out, and predicting, but as far as the business of television goes, there are more interesting things to think on. We obsess over the ratings for the simplest of reasons, really. Because we can! I mean, we get new data to consider EVERY day. So, like the weather, you can talk about it every day. It’s easy and often entertaining.
The broader trends don’t necessarily lend themselves to following on an everyday basis, and are more complex and perhaps less fun to think about. But there are things to watch for in the industry, and ultimately, how they shake out will be much more important to the industry than whether Chuck and Dollhouse get renewed.
Here are the four major trends I’m trying to follow.
Reallocation of existing revenue streams.
There are at least a couple of aspects to this bucket. One is that advertising rates between cable and broadcast should get on a trend where they get closer to each other. Right now broadcast still usually carries a significant premium (even for the same amount of eyeballs) to cable. Look for those gaps to narrow in the coming years.
Advertising supported cable networks also receive subscriber fees. The broadcast networks have begun negotiating for subscriber fees too, but especially as advertising rates between broadcast and cable begin to equalize, look for the broadcast networks to get a bigger slice of subscriber revenues.
Reallocating the subscriber dollars seems like something that has to happen, especially if the broadcast networks are the most watched networks on cable and satellite offerings. I suspect this will be a very painful process that will occur over quite a few years.
Along these lines I suspect the broadcast networks will attempt to abandon the local affiliate market, at least in markets that don’t make any sense, and that appears to be most of them.
I think the biggest shifts ahead for the television business are around the reallocation of existing revenue streams and that this is a far bigger deal than the new and exciting technologies that empower viewers.
Increased DVR viewing and advertising strategies aiming to combat it
Though DVR viewing is already increasing, and we’re pretty sure most DVR viewers don’t watch most of the commercials most of the time, it’s certainly not the case where nobody ever watches any commercials.
The news isn’t totally bleak as far as DVR impact on advertising goes. For one, the adoption curve isn’t steep. DVRs and DVD players became available at roughly the same time. DVD is near 100% penetration and DVRs aren’t in 30% of the homes yet. Currently, even DVR owners seem to wind up watching much more live TV than they watch via DVR.
Better news still, people want to watch shows fairly closely to when they air. Recent data suggests that 20% of DVR viewing starts within FIVE MINUTES of when the shows air. Sure, people are just waiting 5 minutes so they can bypass some advertising, and that isn’t great news, BUT, 20% can only wait five minutes or less. Even for a half hour show, you need to wait around 10 minutes to miss ALL the commercials and closer to 20 minutes for a one hour show. This behavior of people not wanting to wait is good news. Around 50% are watching shows on their DVRs the same night and 75% are watching within 24 hours.
The bad news is that people are bypassing commercials. The amount of DVR homes will increase, as will the amount of commercial skipping. This isn’t happening as fast as many people seemed to think it would, but it is happening, and it will ultimately cause a lot of changes to the way television advertising works. Yes, we’ll see more product placement, more overlays and more commercials that can be interpreted even if you’re fast-forwarding by them. And we’ll see things nobody has even thought of yet. Necessity is the mother of invention, and ultimately it will be a necessity. Fortunately for the television networks the necessity hasn’t happened at the pace many thought it would.
Increased online viewing and more commercials online
Of course online viewing of television shows will continue to increase, but it started from nothing and even today is still a pittance when compared with television viewing. Online viewing is a convenient “on-demand” solution for episodes people missed for whatever reason, but online viewing will definitely not kill TV. People like watching TV on the TV. Families and friends gather around the TV in the living room, not around a 17″, 24″ monitors and laptops. People vastly prefer to watch TV on TV. This is largely a function of behavior and I don’t think you can change that behavior with technology.
Still, this sort of viewing will grow, and in some ways it will grow just as much as a function of it being the only way to make any real money selling video advertising on the Internet because advertisers are much more comfortable running traditional 30 second spots on television shows than figuring out how the hell to advertise effectively on YouTube clips.
But for all the talk of online viewing being additive viewing for the TV networks, and not a cannibalization of existing revenue streams, in order for it to make sense for anybody, including the networks and the studios that own the content, there will need to be more advertising. While not necessarily as much advertising as there is on television, much more than there is currently online. If there’s 16 minutes of ads during a one hour show on television and only 2.5 minutes for the same program online, it’s not rocket science to predict that will increase, and likely by 4X.
And likely very soon.
Many people argue for the Internet as transport mechanism for all video content, even to your television. Maybe someday, definitely not today or in the next five years, and I don’t see a mainstream application for that.
Look for new and better offerings from your cable and satellite providers (watch out, Netflix!)
The main reason that I don’t see Internet as a transport mechanism is that it’s just not cost effective to do it. The cable companies already have very fat pipes to your house and more efficient ways to utilize the bandwidth they have than using the Internet. Yes, there are a lot of cool technologies, but five years ago I was already beaming content from my computer to my TV with a media extender (now I can fairly easily do this with the XBox and PS3). Are more people doing that today than 5 years ago? Sure. But, relatively speaking hardly anyone at all did it five years ago and hardly anyone at all does it today. There is a lot of empowering technology as far as watching video goes, but for most people it’s too much work.
The cable and satellite operators can make a lot of it much easier. It will be harder, though not impossible for the satellite companies, but ultimately I do see them disadvantaged versus cable operators because the cable companies already have very fat pipes directly to homes.
People like me and Bill scratch our heads and think, “Why doesn’t Comcast just offer the online streaming Netflix is offering right through the set top boxes? And why don’t they offer MORE shows on demand?”
The primary reason I think it hasn’t happened has been over the last 5 years, the Comcast and other cable operators didn’t NEED to do it in order to grow. They had broadband, HDTV, and DVRs to sell (and they still do), were growing and could show good sequential growth. But this growth is slowing and they will need to expand offerings in order to grow.
There is another problem though, business models. From a technology perspective, the technology exists to provide the entire Netflix service (not the online streaming piece) in an on-demand format via your set-top box. The problem is, they can’t really offer this at $9.99, $14,99 or $19.99 a month without being in a panic about their other revenue streams. But over time, these things usually get sorted out.
I would expect to see a Netflix style service (perhaps even Netflix itself) via set top boxes within the next five years. All of the issues with mailing disks will be gone. I think it will range in price based on what you already subscribe to. If you are already paying a lot for cable, it won’t be an expensive add-on, but will be more expensive if you’re not currently paying much. But the Netflix model can be recreated in its entirety, and more conveniently so than the model that involves mailing DVDs.
I may be optimistic in terms of my time frames, but the bottom line is that cable operators have very fat pipes to your house, look for them to begin utilizing them more, in some cases with offerings I havent even imagined. I expect we will begin hearing more about them very soon as the cable operators look for ways to grow.
Which of these trends is most important?
I can only answer based on my own thinking but it’s definitely a question that will produce different responses depending on who is being asked.
My opinion is that despite all the hubbub over online video, over the next several years it is the least important thing to watch. Yes, it will grow. Yes, there will be more commercials, but there are bigger fish to fry. I think the three other trends, at least over the next five years, are more important to watch in terms of the business aspects, and particularly the reallocation of existing revenue streams.
so these trends don’t involve whether Chuck and Dollhouse will be renewed… but what about Terminator?
Broadcast vs Cable rates also have to do with retention levels if I’m not mistaken. So since they’re higher on Broadcast… they deserve a premium. That just kind of makes sense.
I’m not sure NETFLIX is much of a competitor with cable or satellite. Yes, their streaming is cool. However the vast majority of their streaming is movies, and many of these movies aren’t even airing on the pay TV services. Yes, some of the TV shows are, but NETFLIX only appears to offer select Universal and CBS productions for streaming of new episodes.
Nick, I don’t think the Netflix online streaming is a competitor, but think the Netflix DVD service is (and it offers much, much more content than is currently available online).
Oooh, speaking of Netflix, I get next week’s episode of Party Down today.
You just had to mention Chuck and Dollhouse in the title,didn’t you?
I think you’re wrong! Nah-nah-nah-nah-NAH.
As an interested layman I agree with most of this but wonder: Hasn’t the imperative for basic cable to class up or improve programming for higher end advertisers existed for a while? Yet its a ” race to the bottom ” much like the nets with reality dreck and network-style sitcoms and cop shows. Second, I’ve seen some really good video streaming and some not so good. Certain consumers were buying flat screen TVs and miniature videocams fifteen years or more ago regardless of price. In my opinion those consumers are still around and MAY drive the demand for video streaming faster than many anticipate. Could be wrong …
Do you guys think its high time that the Nielsen ratings are tossed by the wayside? Sample sizes are hardly an accurate measure for something with so many variables such as television viewership. Ive never once met anyone who has even been approached to take part in the Nielsen ratings.
Are the days of something on FOX being considered a hit if it reaches 5 million viewers where as 12 years ago if something in primetime on FOX debuted with 5 million viewers it wouldn’t have had a chance to even air a second episode.
What amount of viewers to you think constitutes as a hit show for each network?
My guesses are as follows
NBC: 7 – 9 million
ABC: 8 – 10 million
CBS: 10 – 12 million
FOX: 6 -8 million
CW: 3 – 4 million
Also if you’d like what would you have expected those numbers to look like 15 years ago for corresponding networks?
As you pointed out…the landscape of television has changed, yet the method for evaluating its actual viewership when its all said and done has not. When is something gonna be done(and can it please be something that will make Marc Berman so confused that his head will spinoff when trying to list “WINNERS” or “LOSERS”.)
haha, Liz. About Dollhouse or Chuck?
My relative rankings were not directed at you.
Seriously though, please don’t equate my thinking that of all the things I’m following that online video is the least important in terms of being disruptive right now and in the near future means it’s NOT important. if it wasn’t important it wouldn’t be one of the trends I was following! I probably look at time horizons differently than you (and many other people, for that matter).
DVRs have been around a long time and I was interested in them very early and I thought they would be very disruptive (and that it would happen much faster than what has played out). I was certainly an early DVR cheerleader, but it’s only in the last couple of years that they’ve really been on the radar and the data seems to indicate they’re still not all that disruptive (though increasingly so).
And please don’t confuse my take on video distribution of television content online with all online video! That’s a whole new sector, and you guys cover it well, and I was not talking about the sector as a whole.
“Do you guys think its high time that the Nielsen ratings are tossed by the wayside? Sample sizes are hardly an accurate measure for something with so many variables such as television viewership.”
That all depends on the sample size and just because you have not meet anyone that was approached by Nielsen doesn’t mean that their numbers are inaccurate. Nothing about tv viewer ship makes the math particularly difficult if they have a large, well distributed sample to draw upon.
Brandon, until something better that can replace it exists, no, I don’t think it should be tossed. But I’m a pragmatist — I don’t think television is primarily a content industry, but primarily an advertising industry and the advertising is facilitated by the content.
Buying and selling of advertising is what makes the whole thing work, and that buying and selling is and will always be data driven. Right now the market has voted on the primary data source, and that’s Nielsen. Following things for the last 1.5 years here hasn’t led me to believe that’s likely to change anytime soon.
At this point hit shows are shows that have a 4.0 rating or better in the 18-49 demographic, with shows that have over 5.0 ratings being the mega hits. I don’t focus on the overall numbers in general, but would agree that anything over 3 million is a hit for the CW!
Robert: “online viewing will definitely not kill TV. People like watching TV on the TV. Families and friends gather around the TV in the living room, not around a 17?, 24? monitors and laptops. People vastly prefer to watch TV on TV. This is largely a function of behavior and I don’t think you can change that behavior with technology.”
All wrong. Not necessarily in terms of time frame, but wrong in general. Online viewing and downloading will merge with the TV set. There are plenty of ways to do that, and those ways will get easier and cheaper. Even though the computer does the work, people will watch the results on a TV. So, yes, people will watch a TV – but they’ll get the video from either online streaming or a download, probably the former.
And yes, about the only thing that DOES change human behavior is new technology – that or being threatened with death.
Brandon, I would argue that “hit” is possibly the most dangerously subjective word commonly thrown around in tv forums. Everyone seems to have an idea or impression in their mind of what that word means, yet virtually nobody agrees in any one circumstance, much less across the board.
And for good reason!
A hit can be anything anybody wants! Really!
You cannot look up “hit show” in the dictionary and find something there that says “a show must have 4 million viewers and 2 million aged 18-49 to constitute a hit show” or “a hit show must be in the top 10% of its network’s programming” or “a hit show must have significant societal impact”. Nielsen doesn’t have any guidelines either. Each and every person out there makes their own definition of what a hit show is. You just have to say what you consider a hit BEFORE you throw that word around. Otherwise, be prepared to get jumped on by EVERYONE… and again, for good reason. Marc Berman doesn’t specify what he considers a “hit”, “winner”, “loser”, or my personal favorite, the highly subjective “disappointing”. And neither do many of the commentators on his website. Not only do they never state their parameters of what a “hit” show is, but they also seem to contradict themselves whenever they do venture to say what one of their many mysteriously changing criteria are.
I have realized the best way to deal with it is simply come to this site
RSH, it is you who is wrong. You might be right in 10, 25 or 50 years, but you’re definitely absolutely wrong today. My guess is you will still be wrong in five years, and I’m not looking out much further.
Technology certainly changes behavior, but it hasn’t yet made much of a dent in overall TV watching behavior. No matter how much it has changed your personal behavior (or, for that matter, mine). For now, even with all the new technology, the data, and from a variety of sources shows pretty compellingly that people still prefer — and vastly so — to watch television on a TV.
[edit] and I’d add, there is no data to suggest people hooking up their TVs to the Internet and watching television content on their TVs but with the Internet as the source will be a big deal in the next five years. Will more people do it than today? Sure. Will as many people be doing it in five years as have DVRs today? No way.
I find it fairly interesting how ahead of the US the UK is on a lot of these issues although I suppose the massive differences in both population and size play a large role in that as does the fact we have the BBC.
In terms of on demand services and online viewing the UK appears to be years ahead of the US although I only have a very basic grasp of the US on demand systems so I might be slightly off on that. Online viewing isn’t an entirely fair comparison though given that its the BBC who have made the big push into online viewing and they don’t have to worry about making it profitable.
so what’s the point?? chuck has been cancelled??
Robert, all discussion about the timeframe for internet sourced video appearing on television screens aside, the day that technology becomes simple and cheap enough to reach a saturation point is the day ad supported broadcast television dies. 50 years? I don’t think it will be anything like 50 years. I’m thinking more like ten. But whenever it is, the networks better have already made the transition to a new business model before it happens, because by then it will be too late to start doing so.
As for DVR saturation compared DVD, you are talking apples and roast beef sandwiches, Robert. They debuted at the same time, but they were not remotely the same thing, nor did the DVR’s price point drop at anything close to the speed of that for the DVD player.
DVR’s were more complicated, more expensive, and they initially required a subscription to a secondary service that you also had to pay for. Whereas, a DVD player you just bought, plugged in, and used it over and over and over for no extra charge. And with no extra complications. Also, DVD players were basically the next generation of the VCR, a device that had already reached market saturation and that people understood. But there was nothing like a DVR prior to its introduction, so you were starting from scratch with the consumer, which DVD’s definitely were not doing.
People had never had a DVR before, and so therefore had no concept of what they were missing. The taping function of a VCR was nothing like the taping function of a DVR. People primarily used their VCR’s for movie watching, so it was easy to understand what a DVD player was all about. But most people couldn’t program a VCR, so the idea of a machine that JUST recorded television was something that people could not grasp why they needed.
Basically, the DVD player gave you the best and easiest to understand part of the VCR with more features and better picture and sound, while the DVR was giving people the least used part of the VCR, and the one people found to be most difficult to operate.
Apples to roast beef, Robert.
Today, DVR’s are very different in both awareness and execution. The boxes are different, easier to use, and much more efficient. That is one reason why you have seen such a huge step up in market share the past two years. The biggest difference, however, is that now you get them directly from your cable or sat provider, and that is MUCH simpler and cheaper than dealing with the old TIVO service. Time Warner will give you as many as you need, charging you an extra five bucks over the cost of a regular box.
Wait until DVR’s are the standard entry equipment for all cable and sat services and the fees drop down to equal that of the regular box, then you will see a massive adoption of the DVR. But based on just the growth of the last two years, you may see that saturation happen even without that.
Anyway you slice it, the DVR reaching total market saturation will destory ad supported television. You keep holding up these studies showing people’s behavior NOW, as if that means anything for the future. All those studies tell you is what people HAVE done, Robert, not what they WILL do.
The longer people live with DVR’s, the more they will use them, and the more they will use them to skip commericials. And in any case, even right NOW only 20% of DVR viewing starts within five minutes, pery our own study. How is 20% a big number to hang anybody’s hat on? That means 80% of the people with DVR’s are already waiting long enough to skip commericals, and that is just now, when DVR’s only have a 30% market share. The 30% will just keep rising, and the 20% will just keep falling. And it will happen faster and faster each year, as it has the past two years.
Anyway, Robert, the DVR is not the DVD, and it never was, and there is really no comparison between the two despite them both starting off with the letters DV.
I know you don’t want to see broadcast television downsized. I don’t either. But unless these nets get off their collective asses and figure out how to make money in this new age (as opposed to doing meaningless studies that proclaim the death of single cam comedies), that is just what will happen.
You cannot hold back the ocean with a spork.
Robert, we need you to get a new chuck screencap!
I realize this would take alot of the appeal out of dvr but couldnt broadcasters make it so you cant skip the commercials? if the DVR companies got allitle on the side to allow for that, then everyone except the consumer is happy.
but the $$$$$ flow free!
Thoughts?
Short of removing the ability to fast forward I’m not sure how you’d be able to stop DVR users skipping through the ads, the technology isn’t sophisticated enough to be able to tell the difference between the show and the commercials so I don’t think that’s a workable solution. Nor do I think its ever likely to be a workable solution.
What advertisers and networks are going to have to do is find new ways to incorporate advertising. Product placement is the obvious answer because to skip that you have to skip through the show, sponsorship deals are also going to become increasingly important. The idea of strap advertising during the show will likely be played around with as well.
Schmoker, I was not suggesting the DVD is the DVR and I agree with your comparisons absolutely. The DVD does one thing very well — you pop in a DVD and it works. Everyone understands the concept and the value proposition and coupled with years of being much cheaper than DVRs, the pace of adoption is no surprise. My point is that the adoption curves and value propositions of technology that is more complex takes much longer to adopt. I think we will hit 50% DVR in short order, I am honestly not sure the adoption curve for the rest will be rapid.
I do see broadcast television as downsized. In fact, I see broadcast networks going away almost completely and becoming the biggest advertising and subscriber supported cable networks. It’s already true in terms of actual viewing, but the economics currently aren’t completely aligned with that, which is the primary reason that I think revenue reallocation has to happen. For me for years, ABC and CBS were just another thing I can get via cable, like ESPN and Comedy Central. But I watch ABC and CBS more than Comedy Central, and so do most people who watch those networks via cable or satellite. The fact that ABC and CBS had broadcast towers has been meaningless to me for years. From the point of view of the local affiliate model and OTA broadcasts, I think broadcast television as we know it is already dead, it’s just a question of what kind of funeral it will have. But although the business models must change, TV as a medium ain’t dying any time soon, it’s the people who think it is who are holding the sporks.
Alex, I think the cable companies have a way of handling it if you believe in “never underestimate the power of FREE”. They could just make everything (or a lot more things) available on demand, and not charge anything for it, and not give you any way to fast forward (only pause or rewind). You wouldn’t even need a DVR or to set up to record shows, they would just be available. I think lot of people would avail themselves to that versus paying $10-$15/mo for a DVR.
Today the on demand offering from the broadcast networks and advertising supported cable do not have very many ads. I’d expect that to change.
Robert is not a dummy, he wants to make a point here and he KNOWS that if he wants more people to read this article, all he has to do is make a reference to the TV shows that alot of people are concerned about (Chuck and Dollhouse) and we will read it. Hell, he had me as soon as I saw Chuck in the tile, so kudos to him.
Responding to the claim that people “vastly prefer watching tv on tv,” I vastly prefer watching the shows I enjoy online (usually at hulu.com, sometimes at a network website), because there are vastly fewer commercials.
When I watch an episode online, it’s still only 40-43 minutes of actual show, but I have to spend only 45 minutes of actual life to see it, not 60 minutes as would be the case in my living room, and the breaks are so short I can remember what I was watching and what was going on when the break is over.
And, actually, RSH is correct. Right now this very minute anyone with a PC and a digital television can hook it up to the CPU just like it’s the monitor and watch online streaming on the big screen. The resolution with the Netflix streaming is fantastic and fully comparable to watching a live broadcast.
We’re there except in the accounting department.
Robert I agree that the chosen way forward for networks and advertisers will be the on demand services, which they have control over people watching the advertising. I am fully expecting the US cable and satellite providers to start incorporating a lot of the ideas and concepts currently being used in the UK over the coming years when it comes to on demand services. Given the general time zone differences in the US I expect the multi-start gimmick to be something that will become very popular if any of the US providers and networks can get together to make it work. Giving the audience the chance to pick their own start time at 15 increments across the night is something that’s proven to be popular over here I suspect the same will be true for US audiences.
UK providers have also started to look very in depth at a complete on demand service – watch what you want when you want rather than having hundreds of cable channels open to you. The system that’s current launched of that is still in the early stages but having had a play around with it I think its going to get very good as it grows. Cable providers have also started to offer online viewing streams through your television and set top box – Virgin Media offers access to some of the BBC iPlayer and 4OD content a service that should continue to grow and if ITV ever get a decent online player will also include them.
Dianne, every study done has shown that the vast majority of people still watch TV on traditional TV. You and I and some other people are the exception. We are a tiny percentage and that’s not going to change for a long time.
Cut Robert a break, guys. He was being sarcastic, which he has every right to be since it seems there is a vocal minority turning nearly every thread into the Renew Chuck/Dollhouse/Terminator/InsertYourFavoriteCrappilyRatedShowHere Thread. I thought it was a funny and very topical (for the site) headline.
Robert, you and I basically agree, but agreeing totally never makes for a good dialogue, so maybe I amp up the disagreement a bit when I post my diatribes. Really, the only place we probably actually disagree strongly is that I think right now the networks could position themselves to not just become basic cable nets but premium nets. They have the resources to put on the shows that could turn them into the premium pay-cable networks of all time. People would pay higher fees for them than any other net on cable if—and only IF—they used their resources to start making more viewer friendly (i.e., actually good) television. Right now they are programming as much towards adverstisers and their standards and practices departments as they are towards their actual viewers. Cut out the former, and it is a whole new ballgame.
Also, whenever they do consider viewers, they only consider the lowest common denominator, dumbing down most shows until they are completely insufferable.
All of that has to stop if they want to make the transition to big time premium cable fees.
Lots of problems with all of this obviously, starting with the firestorm that will come from people losing their “free” TV (an oxymoron if ever I heard one), and from the conservative groups who will freak out over the liberalizing of the standards on the big networks. But those will all be teapot tempests compared to the major tornado they will all face if they do not change their model and diversify their programming.
Mark my words: one of these broadcast nets is going to dump the entire old school format, start charging big $$$ directly to the consumers (through the cable companies) and go from fading to dominant. Basically, they will become HBO without as many movies and with a HELL of a lot more subscribers. They may, however, try to keep some form of the local affiliate agreement, so as not to have to program 24 hours a day.
I don’t know which network will bite first, but whichever one does will rule the television landscape for many years to come. If you merged NBC’s resources with FX or HBO’s testicles and subscriber fees, you’d have an old school multimedia behemoth that could survive and thrive until the time comes that they finally figure out a way to meld internet and television into one holitistic pocket draining entity.
Dianne, you must not have HDTV if you think Netflix online streaming is as good as broadcast. I agree in most cases the quality is fine, it’s not HD, but it’s not bad either.
On the other hand, many Netflix customers run into issues, to the point where Netflix has had to post things that basically amount to “Uh, please don’t download 5 torrents at the same time as streaming and then complain about the quality! And oh, we can’t control congestion with your broadband provider and the Internet in general and in some cases it’s worse than others.”
If you can get the streaming quality of Netflix to have all four (or five?) bars, it’s quite good. One less is still acceptable. Lower than that is unwatchable.
@Robert, Even in a 5 year scenario I do believe you’re underestimating the changes driven by the online distribution channels,”online video, over the next several years it is the least important thing to watch” sorry but no, IMO how the big 5 manages the rise of internet distribution will determine which of them will still be major players in the future.
Robert said, “do see broadcast television as downsized. In fact, I see broadcast networks going away almost completely and becoming the biggest advertising and subscriber supported cable networks” This seems very likely. I do believe there was some research recently pointing out that a lot of viewers doesn’t make any distinction between broadcast and cable, a tv show is a tv show however it is distributed.
“Reallocation of existing revenue streams.” Sure but remember that this could also mean that advertising revenue from broadcast gets redirected to online viewing, once the advertisers gets comfortable with it. Better targeted ads will appeal to the advertising community.
“Increased DVR viewing and advertising strategies aiming to combat it” The basic question here is why would you use a DVR when you have your shows on-demand ? It’s possible a lot of DVRs like mine will gather dust when all shows are available online on-demand, advertising load might become a deciding factor.
“Look for new and better offerings from your cable and satellite providers (watch out, Netflix!)”, have to agree with Alex that the trends in the US and the rest of the world seems to diverge, while cable and satellite providers might have a larger role to play in the US online distribution is gaining in acceptance outside of the US, the role of cable and satellite is to provide internet access the rest comes from there.
If the US distributors doesn’t provide on-line options we might actually come to see a Freemium model where US consumers pay the bills while the rest of the world get it for free, mostly because of the lack of pay/ad supported options.
Personally the rise of nichecasting replacing broadcasting is all to the good, a few selected show like Deadwood, The Wire, The Shield, Sons of Anarchy, the Whedon stuff and some selected BBC series to be delivered where and when I feel like it is all I ask for. That’s not too much, is it ?
Re. “The Death of Broadcast” The Times critic James P. thinks it’s a good thing
http://www.time.com/time/magazine/article/0,9171,1887840-1,00.html
Not everyone who watches TV shows actually wants to watch it on a tv screen. Movies i want on the big screen, tv im very happy to watch on my 15″ laptop screen. people are watching shows on 2″ iPod screens, so I don’t think screen size is the issue at hand here. even for those that do want the big screen TV viewing, it’s not hard to simply hook your lappy up to the tv screen with one or a couple of cables (even my mum can do it – shes one who prefers to watch on a bigger screen) laptops and notebooks have progressed to a point where they have high quality sound and vid cards in them. easy enough to hook HD TVs up to actual PCs as well.
the screen size isn’t the issue here, i really don’t think.
and as for TV internet. apple TV has started the ball rolling, and soon within 5-10 it could well take off as has the ipod/mp3 player movement, with one mp3 player in almost every home.
What are you talking about. The renewal of “Chuck” is the only important thing to worry about.
Miranda whilst it is easy (and getting easier) to watch shows on computers and hook your computer up to a bigger screen it still remains the case that the vast majority of people watch television on television not via the internet through their computers. That may or may not change over the coming years but right now every indication is that the majority aren’t watching via their computers or iPods. Whether that’s because they want the ‘big screen’ experience or because the mind set is still you watch TV on TV or something else completely is open to debate.
“Sure but remember that this could also mean that advertising revenue from broadcast gets redirected to online viewing, once the advertisers gets comfortable with it. Better targeted ads will appeal to the advertising community.”
The major problem that online viewing has to overcome is that there’s no significant, agreed upon or reliable way to measure who is actually watching. Whilst its incredibly easy to measure how many people are watching its much more difficult to determine who those people are. It gets mentioned at least once a day here during ratings discussions that total viewers just aren’t important to advertisers and that holds true for online content – advertisers aren’t bothered by how many people as much as they are who those people are. Advertising is demographic targeted now and until someone creates an online ratings system that’s both reliable and adopted as an industry standard online viewing isn’t going to explode.
Right now the very real fear that a lot of advertisers have is that the people watching the online content are the ‘wrong’ people. The reason YouTube has such problems with advertising is because of the general view of the majority of the people that use the site not matching up with the people advertisers want to target. That YouTube fear carries over to sites like Hulu albeit to a lesser extent, advertisers are essentially worried that its just the nerds living in their parents basements who watch online.
Alex, I’m not so sure. Via data modeling and cookie tracking they can make a lot of assumptions that are probably directionally correct enough to quell advertisers fears. Especially given that targeting opportunities are generally much, much greater online, I see those issues being worked out to the satisfaction of advertisers.
I think you have it wrong with YouTube, too. I don’t think it’s that advertisers don’t want to advertise to most of the users who utilize YouTube, I think it’s that they don’t want to advertise on most of the content available on YouTube. The television content is very advantaged in that regard, both due to the content and the length of it.
Robert I have a slightly different read on the YouTube issue in that I don’t think the problem is content led – if the numbers are there advertisers get over content issues very quickly. YouTube’s problem is that the numbers aren’t there.
The major advantage that Hulu and the network media players all have is that there’s an existing understanding of who the audience for their content is. If a show performs well with young women on television then the general agreement is that it will perform well with young women online. The figures on who the audience is are already in place because everything that’s airing online has already aired on television and been analysed with a system that advertisers and networks agree upon and like.
In contrast YouTube doesn’t have that. Sure it reaches a huge number of people but they have no real world data to explain who these people are or why advertisers want to reach them. The major content issue that YouTube has to overcome (and I don’t think it can) is that its near impossible to predict who’s actually going to watch any given video on the site. It is by its very nature an incredibly unpredictable site and so they have no way of really selling their content to advertisers.
Ultimately what YouTube needs to do is expand well beyond where they are and have more professionally generated content that they can sell to advertisers. There’s a million and one reasons why you aren’t ever going to be able to sell advertisers on user generated content but if you can get more professional content on there that has some real world data to go along with it then you can begin to bring advertisers into the fold. Of course professional content costs money.
Of course the other issue YouTube has to careful of is what happens if you actually put commercials in user generated videos?
As things stand though the systems used to measure online viewing need to become much more detailed and sophisticated before we’re going to see a real explosion in it because until you have that it doesn’t become commercially viable.
@Schmoker: I agree that it might be cool if broadcasters put truly great shows, made without worrying about advertisers or censors on premium networks. The problem is, I don’t think they can make enough money on it because I don’t think enough people will watch to replace traditional TV networks as a revenue source. For instance, I don’t have the demo numbers, but the SERIES FINALE of the Sopranos, one of the most critically acclaimed shows of all time only had 11.9 people watching it. Premium channels, no matter how good the programming can’t get the money that networks can, which is a shame, because I would love to see better shows than American Idol on TV. The Series finale of Battlestar Galactica, which won a Peabody, got worse numbers than Dollhouse. CBS isn’t going to put its best shows on a premium channel until either traditional networks really tank, or premium channel viewership really spikes.
The day international Hulu becomes a reality combined with far more of the world having adequate internet speeds and data allowances to stream video, is the day broadcast TV as it is dies.
Targeted advertising is the best way to go. You sign up to Hulu. Maybe you pay a subscription fee for each Network you wish to view shows for. you tell them your demographic, you tick some interests. you let people rate the ads based on enjoyability.
Suddenly advertising and TV becomes what it should always have been. International and interesting.
I don’t drink alcohol, but you know, I love the alcohol ads we get Downunder. they’re clever, they’re mysterious, they’re funny, they’re silly. whatever, but they’re enjoyable, and i wont fast forward them or change the channel. if it’s yet ANOTHER ad about nasal spray technology, of course i’m going to change the channel.
just like boys often don’t want to see feminine hygiene product ads, and girls don’t necessarily want to see ads for sport stuff, targeted advertising is the key to online tv. and allowing people to rate an ad, allows advertising companies access to a huge focus group, where people will have the opportunity to say if they like or didn’t like an ad.
@Miranda, Agree completely.
if a show is able to incorporate tons of onscreen/web branding tie-ins.. as well as ability to syndicate the show to various channels worldwide at a good rate ..
these 2 things i think also alter alot of a show is worth it or not.
like for example chuck and how i met your mother, both are great avenues that are set up for branding tie-ins
also shows like knight rider and terminator are shows that have great numbers in other countries (like asia) plus both can be rebroadcasted easily in the US.
i wonder how much these 2 factors measure up whether a serial is worth cancelling or not!
One thing that no one here seems to be taking into account is not everyone is hooked up to cable or satellite TV.
There are still troubles(software, hardware, & etc.) getting streaming video on a computer to be as reliable as regular broadcast TV.
Plus, if you don’t mind just having access to only a dozen or so channels, there is nothing cheaper than putting up an antenna and getting your TV that way. The government ran out of coupons to give people to be ready for the switch from analog to digital broadcasting so there is a good chance there are a lot of those people out there.
Human behaviour untimately dictates what succeeds in the marketplace. Otherwise, gamesystems and computers would be one and the same as that has pretty much pushed since the 80’s without much to show for it since people still like to think of them as separate.
@AniMatsuri, the ‘not everyone changes’ theory reappears often in these kinds of discussions the thing is the current model is based on X millions of people watching tv in a certain way if 25% of them changes their habits they rock the boat, if 50% leaves the system is broken however much the remaining people thinks it used to work just fine. The percentages are WAGs but the principle still applies