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Why I don’t have Cable TV – a conversation about the TV business.

I believe that traditional TV is archaic and that we should, as society, move on. I understand there are business interest behind it, and they too should move on to new business models. If they cannot adapt they should shot down and disappear, because business should contribute to society, not stop it from growth and evolution.

Broken Television

For over 12 years I have worked creating and delivering some sort of media, for radio, TV, online and film. I am also what they call a cord-cutter. Around 7 years ago I gave up traditional TV, before Hulu existed, before iTunes sold movies. It was Netflix and video rental stores the only thing I consumed (I haven’t been to one in at least 4 years), and youtube was in its infancy. I already understood that changes were coming. That the industry was changing and so should the consumer mindset. I wanted to be part of that change. And little by little, video streaming and downloading has been taking over without people really noticing too much.

So what is (was) the “status quo”?

The TV ecosystem works a little like this: Executives and producers think of a show, hire writers, order a pilot, test it (with audience and with ad executives), produce it, put it on a time slot that are limited by half-hour (21 min) or hour long (47 min) blocks and available networks. If it doesn’t get the viewership expected they pull it off the air, they cancel it… without any respect for the audience that it did build, or the people behind it who believe in it. Their only clients and all they care about are advertisers. And they should, because that is their business model. I don’t blame them.

There are two main problems with this business model in my opinion:

1. By default ignores the quality of content and individuality of the audience using shows. Programming is just a filler to sell ad spaces, so the value added is not for the final consumer, but for the advertiser.

2. It completely ignores and cuts off the long tail market for independent tv shows and movies, thus leaving around 80% of the content created each year without exposure, and not allowing a potential audience to see it.

As a side note, there are premium channels that have a different business model, like HBO, who makes money from subscribers. That is why the quality of the content created by HBO is so much superior. It’s also why the current seasons of their shows are fully available on demand, and now on their HBO Go: if you are a subscriber you are going to get the content, regardless of when and where. By the way, I also think HBO Go should be available to non-cable subscribers because cable and cord-cutter markets are not exclusives. Few people would drop their cable subscription only because they can get HBO Go, and if they did, HBO wouldn’t be affected… At the end, the truth is that they are owned by Time Warner so their decisions come orchestrated together with the cable provider and other interest as well, but they are almost there!

The new Paradigm

A-la-carte entertainment! On Demand and PPV models. Anywhere – Anytime content which lets the audience decide how they consume their content. Delivery systems that give producers opportunity to get infront of their potential audience and let them (the market) really decides on who succeeds and who doesn’t. This would allow for less successful shows to still serve their cult following, creating a very rich space for target messages, from the content producers to advertisers themselves.

This new paradigm frees the content from the 21 – 47 min standards, and allows for more creative and risky storytelling, innovation in productions and in consumption, always focused on the final consumer: the audience.

I believe that we are entering a market of small players. Today, an independent producer can create a new ground breaking show, or even their own TV channel, and deliver it, across multiple platform, with ad revenue, a PPV or subscription fee, or a combination of both, to the target viewer, without ever having to be approved by a TV executive with a scarcity mindset and aversion to risk, and make it profitable, because we live in the age of abundance of distribution. The scarcity is in the attention of the viewer, and that is something that the TV industry has lost to what we have come to call the “Second Screen”, when in reality, if we measure it on how much attention we pay to it, we should call it “first screen”. Yes, we are on our smart phones, tablets and laptops much much much more than infront of our TV sets.

Even Live shows can be sold online for live streaming or on demand watching. I for example pay MLB.tv yearly to watch the Red Sox, and I can watch every game live in my living room or on my iphone if I am on the run.

The best part of all these is those producers who have made their content available online, have a much more accurate measure of who is really watching, why they are watching and when they stop watching, so they correct course on time. This advantage gives them the opportunity to target better their marketing, and charge more for the content, whether it is to the audience or to the advertiser.

I believe that we live in a time of abundance for content producers. Some have learned how to harvest it, some haven’t, but the potential, the opportunity is out there, being tapped by many. I am happy to be a creator of this generation.

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