Video iPod Shocks Affiliates, Spawns New TV Industry
Apple's announcement last week it will air episodes of ABC's Lost and Desperate Housewives, among others, over it's new video iPod has caused concern among network affiliates who feel "off TV" viewing will hurt rating and/or make ratings in accurate, let alone destroy their business model. All the hand wringing that will, no doubt, go on for the next year or two surrounding this issue could easily be skipped with the simple acknowledgment that every bit of broadcast programming will ultimately be available for download with or without advertising, viewable on an iPod, a similar device, a PC or ported to and viewed on a TV. Current appointment television viewing as we know it will disappear. Current rating systems will become irrelevant. And the buying of "TV advertising" simply won't be the same.
Whether it's the video iPod or the DVR or the PC, the hard drive will be where it's at. People will simply subscribe to RSS feeds of their favorite programming, have them downloaded when available, port them over to the viewing device of their choosing and view them at their leisure. This will throw a monkey wrench into the workings of all involved. Marketer's campaigns will no longer be able to reliably be flighted with specific, date-based timing. The networks, soon to be referred to as content distributors, will either become pay per view providers or face the inevitable ad skippage that any device holding programming will be capable of. Affiliates will become almost irrelevant unless they become some sort of pay per view middleman between network and consumer. In fact, the entire television industry could become obsolete when creators and producers realize they can offer up pay-per-view or ad supported programming for download themselves. All that's needed is a few really big servers and the networks, affiliates and cable companies won't have much left to do. For anyone that owns a DVR, they are already living a version of this reality.
The current method of television programming distribution can be likened to the purposefully crippled method most cell phone companies force their customer to go through when using a camera-enabled cell phone. The phones themselves are perfectly capable to transferring data directly to a computer. In fact some providers allow this. However, most providers force phone makers to cripple the phones so the only way to gets images from the phone to the computer is to send them through the provider's network, for a fee, of course.
For the purposes of this discussion, the cell phone companies are the networks, affiliates and cable providers. There's really no use for them when a producer of content can easily connect directly with a viewer. Yes, there's the details of supporting costs for producing the programming in the first place but HBO seems to have a pretty good handle on that. And yes, not everyone is gleefully going to pay for content when they have, since television was invented, received it for free.
Perhaps what we're about to witness is the birth of an entirely new sister industry to ad-supported television. This new sister industry would have no middleman. Producers would create shows and sell them directly to those who chose to pay to view them. From hard drive to hard drive as it were. Those who choose not to pay could fire up the ad-supported broadcast TV that's been in the living room for over 50 years.
There's bound to be all kinds of holes in this line of thinking so feel free to poke away at them.
Comments
The major exception to this scenario is the role of live broadcast. The broadcast media--both radio and TV--are more effective at delivering live programming to large audiences than one-to-one streaming or download delivery mechanisms. It won't help the affiliates keep their prime time audiences, but it will give them a continuing advantage with events that are inherently live, such as sports events and breaking news.
"Network affiliates who feel "off TV" viewing will hurt rating and/or make ratings inaccurate", let alone destroy their business model have most likely never seen the small grainy images on the new iPod. There fears are for the moment, without basis in fact. The new iPod is all hype and apporaches zero threat levle at the moment.
Give it time. In a few months, that will all catch up. TV is done.
I won't pay for these shows--give me the shows with the advertising embedded in there, but, I won't pay for shows I can get for free.
Being able to watch my favourite TV shows when I decide will help me save time, for instance by watching them in the subway to work. This alone is already worth paying for.
I think the imminence of the demise of standard TV is a little overstated but the gist of the article and the eventuality of a complete paradigm shift is right on the money. I'm quite certain that by Christmas, probably by Thanksgiving, you will see a vibrant market for new era "TV Shows" on the internet (and by that I mean original content programming produced specifically for the internet). I know this because I have a small internet video production company that has had just those types of shows in development for months. The launch of video on iTunes will greatly speed the growth of this type of programming by providing a central distribution point. But don't think it's just aimed at the 2.5 inch screen of iPod Video. Connection of America's television sets to the internet will happen more quickly than most people expect. The Trojan Horse that will accomplish this is the next generation of home gaming consoles (such as Microsoft's new Xbox 360), all of which provide/require internet connectivity for full functionality). And modern internet video compression can provide broadcast quality on a tv screen for these new programs. Some -- not most -- of this new era "tv" programming will gain sufficient mainstream popularity that advertisers will be falling all over themselves to sponsor these new shows. It's not going to happen overnight but it is coming much more quickly than most people think.
Jake
Agree with Jake. Also it's a threat to ITunes, etc. because if you're already paying for cable, don't think the Cable providers will miss out on an opportunity for a new revenue stream from the same programming. Set top box already has DVR. How about a set top box based downloading center? Not exactly a giant step.
TV ratings have been bogus for years... don't people STILL report ratings on paper in some cases? P&G and other big consumer products companies are already demanding pay for performance. Once drug companies stop advertising on prime time, there won't be much 'big money' left to throw at national, broadcast programming as it has existed up until about 10 yrs ago.
if ad revenue starts to drop this is what will happen: the networks will develop a protected file format along the lines of msft's .wma file format. furthermore, all protected files will require the download of a certain plugin/codec onto the video playback device. this plugin/codec will allow the protected content to be played but will disable any fast forward controls on the player. it will suck and be like old tv, but this will force viewers to watch ads and business will be back to normal. so skip ads while you still can.
So, when did .wma stop illegal downloading of music? The fact is, technology moves more quickly than the safeguards against them. If the networks find some way to disble the dvr, someone, inevitably, will find another way around it. So skip ads now, and be happy the you can skip ads forever. And, start thinking about how to stay viable when the current model crashes.
Two things. One, people like us forget that most humans in the world are not people like us...i.e, upper-middle class or better, with the resources to pick and choose and pay at will. Even in the U.S. the majority of people who currently watch "old" technology appointment TV will not be able to participate in the "content my way" game, so that the most likely scenario is the one in which custom programming and appointment programming are parallel universes, not the former replacing the latter.
Second, we let the wondrousness of the technology blind us to what "TV" actually means. People will always be WATCHING something and will need something to watch it ON. One of the notes above describes Internet signals achieving broadcast quality ON TELEVISIONS, and ADVERTISERS rushing in. Sounds pretty much like current TV...and the fact that the providers of the content will be different than they are today is, from a pure consumer standpoint, almost irrelevant.