TV’s Missed Opportunity
People are crazy for premium content
Back in history times, our ancestors were restricted to watching only what was on TV. And, even as cable television and satellite TV expanded to give us hundreds of channels, somehow there was still “nothing good on.”
In the days of angelfire websites streaming video was a mere myth. These days a faster, more developed Internet has grown up to provide an unprecedented level of access to programming. Along with it new viewing habits have evolved to fit.
However, uncertainty, lack of creativity, and reluctance to abandon a proven business model have kept most media companies from adapting to the new ways we’re watching TV. The result amounts to a significant missed opportunity.
Because of the Internet, people are watching more TV, not less. So why are premium content producers losing money? The ability to pick “what” and “when” in consuming TV content has led to a sharp increase in the hours spent in front of our screens watching TV. Though, it might not seem obvious because companies like Nielsen still aren’t measuring this accurately (not to mention all the illegal consumption going on as well).
By a sharp increase, I mean a-wicked-lot-more people are watching tons more TV. Old media can no longer satisfy this new thirst for content. We’re talking TV seasons in a day. An entire series over the weekend. You just can’t get that on TV or even most websites that provide content along with ads. TV is simply unable and the latter (e.g. Hulu) has its hands tied because of low ad rates.
DVDs and iTunes can’t exactly come to the rescue here, either. The problem is that content on these platforms is priced far too high to support new consumer habits. People are looking for affordable content, and $44 per season and $15 an album is a lot to pay (especially for a virtual copy) when your consumption is twice what it used to be, or if you just want to watch it or listen once.
As a result, many people turn to the convenience and affordability of illegal downloading—a force that helped form these new habits in the first place and the biggest thorn in premium content’s side. In some cases, illegal downloading is the only option for getting content, as sometimes straight up access just isn’t available to buy online or off. In these situations can we really fault bit torrenting?
Let me put it this way: if a publisher discontinued printing a book because it was no longer profitable or a record company refused to re-release a rare album because of low overall sales—and neither offered any way to access the material—then what’s a rational actor to do Mr. Economist?
Now I’ll admit, the content typically being stolen is available, but not on TV and not online with ads (something consumers are willing to do). Premium content is often overpriced, both virtually and physically, to the point that most wallets just can’t support consumption. I’m not trying to make excuses, per say—just pointing out that crack is wack, I mean addictive.
Denying content to consumers hungry for it is simply bad business. People that download to get content are no more guilty of stealing than media companies are guilty of missing a smart opportunity. And so I ask, why should we not download it? Premium content producers are either unable to find a creative ways to meet our demand or ignorant to it.
It’s too bad that Hulu isn’t getting the ad dollars it’s backers hoped for. But, as any good capitalist would argue, that isn’t the consumer’s problem. They are not into sitting down at 7:00pm, and only 7:00pm, to watch their shows anymore. And, what if they want to catch the whole season? People pay over $100 a month for cable TV and Internet already! They want some slack. Eyes are valuable and they are on the screen(s), so as Timm Gunn would say, “Make it work.”
People like TV and they’re watching more of it than ever before. Further, most audiences accept ads as a “necessary evil,” and enjoy Hulu immensely. In fact, most Gen Y-ers probably pay more attention to the ads on Hulu than the ones they’re skipping over with the DVR on their TVs.
People want their stories and most would rather not steal; but if we treat them like thieves they will act as such. Treat them like consumers addicted to your product, and get a little creative about how you give it to them = profit, plain and simple.
Author: Jason Potteiger – Associate Editor at TNGG
12 Responses
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[...] My suspicion that total TV time is on the increase was echoed yesterday by Jason Potteiger in his essay for TheNextGreatGeneration blog, “TV’s Missed Opportunity“: [...]
Great article, Jason! I'm a prime example of a Gen Yer who does not own purchase cable television. In fact the only use the one TV in my house gets is from Netflix DVD's that I could just as easily watch on my laptop. I find myself too busy to watch more than 1 movie or TV show on Netflix more than every few days, anyways. So with that in mind, why would I spend $90/month on cable television instead of spending $10/month on Netflix and if there's one show I really want to watch that isn't available on Netflix, I'll just stream it off Hulu or the network's website.
And I really do watch the commercials on Hulu or abc.com, for example last night the ads were for Ragu tomato sauce. Yea.. I remember that, crazy huh? It's not that I really want to watch the commercials, but they are so short (30 seconds or less) that I don't even have time to step away from my computer to do something else while the commercials are on, so I just sit there and watch them so I'm ready when my show comes back on.
@Carlee Yes! I too opt for a $12 Netflix subscription over cable (well, this year my roommate insisted, but normally no…) and I have many friends who do as well.
The old “there's nothing on” is no longer acceptable when instant content is so easily available. If I check the channel guide and there's nothing I'm interested in, off goes the TV and on comes the Hulu. …Or, you know, the Pirate Bay. I can't believe TV hasn't created custom channels for it's viewers. If I want to watch Orbach-era Law & Order, Mythbusters, Dexter, and My Little Pony all day, it would be much more advantageous for cable companies to find a way to create my own channel only with things I'm interested in. That's essentially what I am able to do with Netflix and Hulu, and normal TV feels clunky without it.
Jason,
I think the problem you write so well about is obvious. What's tough is figuring out the solution. I don't know much about the cost structure of producing commercial video content, but I would imagine it is high, based on old ways of doing things and passionately protected by unions. So, the first thing I would wager that needs to happen is that the costs of production and residuals be reduced. Further, when you say that denying people content is bad business, I'm not sure you're right. Let's say you own some content, and you can either spend money to make it available at a loss, or just shut it down and move on. My guess is that the best business decision is often the latter.
Jeff
Jeff, you make some excellent points here. This article is intended to be part of a series, one of which will deal specifically with solutions.
But, to your points. I think that people are willing to pay a price for content (other than a pay wall), perhaps one much higher than simply watching ads–but, they just haven't been asked to. Further, as it's so easy to download TV shows and movies, many people will just get them illegally if it's not available on sites like Hulu. On the other hand, they want to support the shows they like, but we're not giving them a way to do it. Why not ask people who downloaded it to register their copies? Perhaps with money, or donations?
Or better yet, ask fans to go watch ads and take a quiz after (to prove they watched it), to support the show with their eyeballs. We could create a whole new type of ad format and/or interactive experience for that. People already love watching movie trailers, lets do that for ads and interactive experiences, make it part of the whole viewing experience. But, that's for another post.
Anyways, that's just one idea. But my point is this. Consumption is up, way up. And the more the industry denies access the more eyeballs they lose to illegal consumption. They need to harness this new passion for premium content people have and get creative about making money with those eyeballs.
Similarly, I have no cable (or even internet) at present. My roommate and I get our TV fix from NetFlix and swapping DVDs with friends. I don't have a ton of time to watch either, but there are always those rare weekends when I watch an entire season of something. Also, about watching the ads on Hulu and ABC, that's exactly what I'm talking about. I think those ads are very much underrated in terms of attention.
Great point on how people will take content if it's not available the way they want it. Netflix is in a great position because it listened to what people were doing: downloading content to watch at their leisure. At $12/month, millennials like myself can get the ADHD friendly selection of on-demand content, without needing a new hard drive to fill up every year. The more content providers try to prevent their products being available on-demand online, the more they get pirated (as many European nations are discovering a year after their anti-piracy laws). South Park Studios was one of the first to offer their content online, as they recognized people would download it regardless. I am stuck with cable in my apt only because I have some old head roomies who rank a cable subscription with running water and electricity — if they streamed the NFL online (legally) I would watch less than 10 hours of traditional TV a year. As far as saving “TV,” my television has simply become a larger computer monitor, and where I play PS3. I see television networks as outdated middle men, and content producers could easily succeed without them.
“I see television networks as outdated middle men,” I like that. I think they can stay around, however, and use their networks to augment the viewing experience. There are still some shows I like to watch at their scheduled times. It's a fun routine. But overall I think you're dead on, it's about the content over the channel these days and TVs are just another screen for the internet in more and more places.
another aspect I enjoy about online content is that it gives creators a medium around the FCC and painfully politically correct networks.Giving artists a medium to express their vision without censorship gives me a much greater connection to my shows.
I'm another Gen Y-er that does not pay for TV, although that was not my choice (extremely poor roommates). I thought it would be devastating, but it hasn't really been an issue at all. I can stay on top of my old faves like The Office and Glee with Hulu and Netflix is perfect for movies.
The only real problem came with my ultimate TV obsession, American Idol. Their website offers clips from each episode, but that really doesn't cut it. Still, I can almost always find the entire episode on YouTube in ten minute segments for free, no illegal downloading required.
The thing I miss most about TV is ending up on random channels watching shows I never would have consciously chosen. And my late nights vegging with Frasier and The Golden Girls. I will never actually sit down and watch old school sitcoms like that on purpose, but that still ends up being my routine whenever I go to mom and dad's house.
I understand that it's expensive to make commercials and it's expensive to make TV shows. But in the age of good-enough content, most of us would be satisfied with FlipCam-like quality instead of HD as long as the plotline and dialogue were still good.
And when SO MANY people are making content and putting it out there for free, TV doesn't have the monopoly on content anymore. They don't have the luxury of charging out the wazoo when I can be entertained for hours by Keyboard Cat and Homestar Runner.
I have a few solution ideas, but I'll save those for when Part 2 gets published.
I think that the “good enough” content is only good enough about half the time for most people. Whether it's 30Rock or the Pacific, there's something about shows with big story arcs and well developed characters that we will always want. I don't know if YouTube will ever be able to replace that. Also, would love to hear your thoughts about what to do.