I wrote a post a few days ago called Quick observations on TV distribution in which I made a number of outrageous claims that I pretty much stand by. It was a bit of an off-the-cuff and not entirely digested attempt to throw out the core bits of the stuff that’s been in my head for a while, so I thought I should briefly mention that I’ve posted a couple of comments in the thread responding to some other people’s opinions and expanding briefly on a couple of the points:
(1) My assumption is that you pay these companies for a whole bunch of television you never even watch – that in terms of ‘must-see’ TV, people probably only really care about five – ten shows at any given time – and that most TV series arcs are between twelve and twenty five weeks, so that’s between a quarter and a half of a year. So even at today’s prices, you’d be paying what – $350 every six months – sixty dollars a month equivalent for ten new fresh shows downloaded every week of month. Now that’s clearly too much money, but it’s not too much by an enormous margin. Drop it down by a third and, you know, you’ve got yourself a deal – between eight to ten shows a week distributed down to my equipment for me to own and use immediately and for as long as I like for about $10 a week? That doesn’t seem so unreasonable.
(2) Think about it this way – the motivation for the content producers is not to give all the revenue to the content distributors, and they may not have to – you only have to see the straight-to-DVD market that Disney exploits to see that, and many shows recently (Futurama / Firefly) make more money on DVD than on TV distribution. There’s already a market (albeit relatively small) for people to buy programmes that have never been (or barely been) on TV. And there’s a huge market for buying media outright. So if it’s in their interest to try and get rid of the middle-man (or find a new one that’s more favourable to them), then they’re eventually going to start working in ways that make things difficult for the TV channels who obviously don’t want their audience balkanised. So they’ll either form partnerships with the content distributors for revenue sharing or they’ll gradually look towards different types of content that don’t suit download so well (Big Brother, perpetual rolling news, radio-style programming, live broadcasts).
(3) In terms of how you promote things if you just avoid broadcasting the shows themselves – well the same way you promote everything else that isn’t a TV show. They promote films without showing them on TV first, they promote albums without people hearing them first. You can buy ads on the TV that’s left, you can put things in the papers, etc. etc. My personal favourite – the US pilot season currently produces dozens of throwaway episode that never get shown, where instead every episode produced as a pilot is released to the public for free download (for the first month) and then if they get enough interest in the show in terms of direct subscriptions or individual pay-for downloads then they produce a full series. All TV shows are risks obviously, so this might move the burden of risk more onto the content producers than the networks, which might produce a more risk averse environment and a need for those companies to get in more revenue with which they can support the failures, but this is only a shift in money generation from the networks to the studios, and that often happens with middle-men anyway. And on the other hand, self-financed projects might get more access to the mainstream, fan favourites could be supported literally by the fans rather than by the advertisers. Componentised, smaller, more nible, more responsive media focused on meeting every niche need. It could work enormously well.
And I should also point out to the people whose post I can see on Technorati but not on their own site for some reason, that I’m not so much predicting that, “Internet TV will move from pay-per-episode to a pay-per-season, one-time subscription model” but that pay-per-season, one-time subscription is the best way to get down the programmes that you actually always want to watch, and that implementing the podcast-like functionality alongside individual downloads at a higher price is the best way to meet user needs and to make downloadable programming a real partner to traditional broadcast.
13 replies on “A brief follow-up on TV distribution…”
Oh, how they laughed when independent film geeks started producing shorts for distribution online. The ridicule, the shame. Yet another example of the mainstream media catching up when they realise it’s not so silly after all.
Having a TiVo or similar device made it easy for me to do the math. I have Dish Network with a DVR. We basically stopped watching live television months ago, and now record everything. Looking at iTunes pick up a lot of shows, I started to think about what it would take for me to quit the Dish.
First, I decided you really have to calculate this on a year basis. If you’re paying for cable/satellite to watch shows like Lost or the Sopranos, you have to take into account that they don’t play year around, but you are still paying for service during that downtime. So add up what you pay for television service for the year.
Next, go through your TiVo/DVR and write down all the shows you regularly watch and make a list. Try to figure out how many shows are broadcast per year. This might be difficult for a few things like the Daily Show, but overall it isn’t too hard.
Once you have your list, figure out how much it would cost to get the shows through iTunes, especially as Season Passes, and see how it compares on a year basis to your current costs.
The main problem I have is that iTunes doesn’t carry everything I watch. So it’s not practical to “switch” until they do so. But once they do, it’s pretty competitive. It would cost a little more to go with iTunes overall for me. But what I could so is switch my Dish package from “America’s Top 120” down to “America’s Top 60” once a couple of programs I watch go to iTunes and save money that way.
Also, it might work out better to combine some iTunes buying with buying DVDs or renting them through NetFlix. I could, for example, get the Daily Show by iTunes and wait to watch some of the Cartoon Network programming on DVD as that’s not time-sensitive.
I think that’s absolutely right – some of the programming we watch we wouldn’t want to ‘own’ anyway, and there’s going to be a space for broadcast style coverage as long as there are things that happen live or ambiently, rather than demanding our attention – so I’m definitely not saying all TV goes away in favour of subscriptions. But maybe broadcast TV itself changes, becomes less of the focus of big productions and fundamentally less expensive as the high quality programming starts to gradually circumvent it. I think it’ll only take one cult favourite to be self-supporting by distribution over iTunes after a major network decides to cut it for things to really change anyway. And more so still when you get to purchase your media and subscribe to new things through your computer or your TV set and still have it belong to the same account.
I’d rather pay-per-view online than continue paying for the awful DVR service we call Sky Plus any day.
I think you’re right about this – TV content distribution will end up the way you’ve proposed. I just got cable TV for the first time and it depresses me every time I turn on the TV how much I’m paying and how little of it I want to actually watch.
It would be interesting to see what that does to TV advertising – perhaps there could be a model where you choose to download the cheaper but full-of-ads version, or choose the more expensive but ad-free version.
Even with TiVo, I often delete stuff after I watch it, only to want to later show it to a friend. If you’re buying it all on DVD or iTunes, you’ve got a copy of everything, unlike paying to watch it only once on broadcast and then having to wait for the reruns.
regarding waiting, and watching some programs via NetFlix — that’s exactly what many of my friends in the US now do for HBO programming, instead of paying the extra $15/month for a cable subscription that includes HBO.
Intriguing posts, Tom. But I wonder how this applies to, say, the UK?
Here if I buy a Freeview digital receiver for a one-off cost of as little as ¬£30 then I can receive a great number of channels for nothing more than my licence fee (¬£120/year).
If I had subscription TV services (which I do) then this model makes a lot of sense. But with subscription TV I still have to pay my ¬£120 annual licence fee. There aren’t many cases yet where an individual could argue that they’re exempt, and the licence fee is going to be in place for quite some time yet.
So wouldn’t an essential part of the model have to change before adopting this new method of TV distribution would make sense in Britain?
Clarification: I am the guilty party whose link to your original post you could “see on Technorati but not on” my site. The reason you couldn’t find it on my blog is probably because it wasn’t really a post at all. It was just a link in my linkroll (http://del.icio.us/erickschonfeld) on the side. As is my practice on the linkroll, I was trying to squeeze your thoughts into a pithy one-line summary, and that’s where the nuance was lost. Sorry if I mangled it.
Both Dylan and Tom have stated in different ways that this does not represent a new model rather, emergent behaviour that is leading a fragmented media consumption landscape toward models that can start to generate revenue. i personally don’t see any one model winning out… it’s going to be messy and consequently this is potentially bad for the consumer in terms of cost [the license fee represent incredible value whichever way you look at it and moving toward even season based subscription doesn’t start to give you real economies of scale – a basic SKY package is 15BPS a month!], quality [potentially more risk averse programming predominates – look at the left liberal arguments against US TV] and range of programming [you produce what generates revenue rather than say, an educational programme].
So, sure, the ‘straight to consumer’ model sounds dandy – it puts us in charge! – we’ll have access to programmes straight from the content producer – and not via the ‘evil’ distributor. But at what real cost this ‘fragmentation’? higher overall costs to the end user [how many of us have Sky, broadband, and content subscription models sitting side-by-side at enormous expense]? loss of range [not quantity] and the culturally significant genuinely mainstream programming represented by the BBC [ITV is now officially on its deth bed].
Excellent thoughts on this…
It almost seems too obvious that paying only for the exact content you want is the way to go – although personally I wouldn’t bank on advertisment-supported free content to go away either.
I couldn’t agree with everything you say there in point 3 more. I wouldn’t exactly expect the middle-man TV network or studio to disappear, but the ones that blend into this system and help facilitate it will be the ones that survive… well hopefully, we’ll see…
I read in WSJ that Desparate Housewives brings in 53cents per hour per viewer in ad revenue. That has to pay for the show, split with the affiliates, broadcast towers, HQ staff etc.
They sell the same show on iTunes for $1.99 and I believe Apple gets 70cents. That means a downloaded show brings in $1.30 and costs way way less to “broadcast”. So either a) regular tv is way too cheap or b) iTunes downloads are way overpriced.
I go with b)
Like many of the posters above I have a PVR. I select dozens of weird shows across a spectrum. We check some out and never watch again, check others and love them (Flip this House!!!) Some have way lower production costs/qualities than others but I can find something to love in many of them.
The problem is this one price fits all. Beauty (price) is in the eye of the producer. Everyone things their show is worth $1.99 and to be honest while I might love The Thirsty Traveler it might only be worth 20cents to me. Especially when I can go through three hours worth of shows in an hour sitting. At $1.99 that would be an expensive hour.
I figure my current $55 per month cable bill = $2 per day. For that I often go through 3-6 hours of programming (more weekend – less wkdy). So I’m paying perhaps 30-40cents an hour for tv.
So that kinda suggests buffet style pricing is best…$2 per day…anything I want. But darn that takes us back to the Cable tv monopolies. Yikes…exactly what I want to get away from.
What I want is program agnostic provider(we accept all…not just the producers/networks who bribe or kickback to get us to broadcast their stuff).
I can pay them fixed rate and pick and choose what I want to see.
For perhaps 50cents a day extra I can get the HD feeds. Done, set, sorted!
Include a ‘whats hot, whats not’ and you have a makeshift TV Guide, Neilson ratings automatically. I’m lovin it. Where do I sign?
One last wish list…
Someone posted cmt about getting international tv. How about a site for Slingbox owners where they could ‘share’ with friends when they are not using the service. I can imagine that 90% of the time owners are not actually watching and that is problably primetime in another continent. Does Slingbox make that possible? (not having one I don’t know). I know it limits to one clinet…but can it be any client?…so if I want to allow strangers see my tv in Canada I can post it as ‘available’ all day this afternoon…
Just an idea…
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