Network TV Just Now Realizing The Media Landscape Has Shifted?

from the it-took-that-long? dept

As we watch the newspaper industry struggle with trying to respond to changes in the market that were obviously on the way a decade ago, it's funny to see network television just waking up to the same issues. Apparently, they're just now (?!?) realizing that the advertisers who kept them in business all these years have many other options on place to advertise -- and the viewers who used to have three options for what to do on a weekday night (ABC, CBS, NBC) now have hundreds of channels, billions of internet websites, movie rentals, video games and many, many, many other options. Yes, the market has shifted -- but that shift began quite a while ago. The fact that the networks are just now realizing that maybe they need to treat the business slightly differently certainly seems like they're a bit late to waking up to reality.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Sandy, Mar 2nd, 2009 @ 10:39pm

    I don't understand why TV in the US doesn't just switch to a (cheap) paid format and eliminate commercials, either totally or partially. Commercial format TV in the states is incredibly annoying. I would think most people wouldn't have a problem paying a minimal fee to get it sent via cable. So many people buy DVRs or like type systems and skip them anyhow.

    In the NL the format is two long commercial breaks per hour of TV broadcast. A couple of networks tried to break them up into shorter breaks (makes it a bigger pain in the butt to skip) and the public went nuts. The experiment was supposed to run a week but it only lasted one day.

    People don't watch commercials if they can avoid them unless they are particularly humorous. Those commercials often have a longer life on You Tube, or go viral. I would think that making particularly good commercials and trying to get them online would be a better idea than turning out schlock that people skip over would be a better investment.

     

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    Anonymous Coward, Mar 3rd, 2009 @ 12:12am

    I do not watch many TV commercials, Use the time to get snacks etc, Also place TV on Mute as most are quite louder than the actual show on. Also, I will change the channel to a movie channel just not to watch the annoying ads. TV ads are like SPAM these days, Unwanted and to many.

     

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    ulle, Mar 3rd, 2009 @ 12:53am

    Actually at one time the US did switch to a commercial free paid format, it was called cable TV and it was good until the cable companys got greedy and started running commercials.

     

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    Art Conservative, Mar 3rd, 2009 @ 1:40am

    Re: Paid TV

    Is this an NBC marketing VP's recommendation (rather than compete, figure out how to seize bailout opportunities)? Or is this an Obama stafferr's realization that we can also nationalize TV?

    Either way, please, NO. We already have unfairness indoctrination via NPR. We don't need more of that drivel.

     

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    Anonymous Coward, Mar 3rd, 2009 @ 1:49am

    Movement of the landscape is usually an earthquake

    We can generalize points, but overall, there seems to be a void in what is being delivered by big entertainment (commonly referred to as "Content Providers") and how users are actually consuming their "Content". This void is what I call the "Entertainment Jump".

    Civil action should be considered by the board of directors as "a byproduct of a broken model being sustained by third party intervention." What is needed is recognition that consumption model has changed.

    First, it's helpful to re-evaluate the market you serve. Are you a business that is involved in "Content" or "Entertainment"? While similar on the surface, both have very different methods in execution.

    If it's content your in, well, it helps that your business model enables content to be manipulated into a final form of Entertainment. If your an Entertainment Business, surely your enabling your audience to leave feeling a specific experience.

    Consider the contraction in the marketshare of legacy 1990 definition of "Entertainment" (radio, physical media purchases for example) To some extent, these channels of distribution have become less viable, because they are distribution channels of content, and lack the entertainment piece.

    So let's assume you work a company who is somehow affected by this identity problem. You could get together a team, and perform several focus group sessions geographically across the country with the the theme of defining: "What is Entertainment in the 20th century".

    Once you discover today's definition of "Entertainment", as described by your focus group, is distributed over the form of Facebook, Flickr, YouTube, you can start to discover and retool to facilitate the transition from being a mere Content Provider to Entertainment Provider. (Assuming that's the direction you want to go.)

    As Mike pointed out, many are leveraging free content to fill the void presented by obstructive rights management processes. But your focus group will assist in a key thing: Re-visiting your main definition of what "Entertainment" (The final product, or output of a creative endeavor) versus the stark difference between "Content" and a "Content Provider".

    You may also find it startling to find people are moving away from traditional media such as radio, television, and newspapers for more interactive mediums.

    But the differences between actual reality, along with assumed reality will affect execution towards consumption may suggest a market benefit if properly executed upon. This is something that you need to be cognizant of.

    For more helpful tips, watch TechDirt (beware of the occasional deadpan humor) or call 1-888-930-9272, ask for Mike Masnick and he'll setup a case study for less than what it would cost to fly a team of three to 8 cities across the country to get the same results.

     

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    Weird Harold, Mar 3rd, 2009 @ 3:43am

    At what point is the general public willing to pay for it's entertainment? Would each of you willingly pay $1 or $2 per month per "network" channel to see CSI? If CBS became an HBO style channel, would you subscribe?

    Advertiser supported broadcasting has been used as a model since the start because it is the cheapest model for the end user. The entire investment for the user is a TV receiver, nothing more. No ongoing costs (except electricity), which gives the viewer access to at least 4 or 5 channels in most places. The "charge" for that free stuff is advertising.

    Broadcasting (over the air) works because the costs to air a show are the same no matter how many people watch. It is to the broadcaster's advantage to have more people watching, as the costs remain the same but the advertising potential is higher. This differs from digital distribution (internet or DVD), which has a cost for each new viewer (bandwidth or physical product) and therefore is more difficult to offer for free. A repeat viewing (a staple of networks recouping thier costs) costs little to broadcast, but has the same exact expense as the original when done over the internet.

    Broadcast TV also does things like live shows (sports, awards shows, news, etc) that would be much harder to do in other formats.

    In the end, it gets back to the creation situation: The current broadcast TV ad supported model allows significant amounts of content to be produced each years (each network generates something like 50 hours a week of programming, between news, sports, and prime time). Syndication companies generate thousands of hours a year. If that model suddenly stopped, there would be no easy replacement for it, no way to aggregate enough eyeballs to make it worthwhile. We would all be left watching "man gets hit in nuts with bat" videos on youtube, because the money to produce the content wouldn't be there.

    Cause and effect - you cannot just look at any one sliver of the deal seperate of the rest of the process.

     

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    R. Miles, Mar 3rd, 2009 @ 4:13am

    Re:

    At what point is the general public willing to pay for it's entertainment?
    WTF? Excuse me, but just how many people do you think still use OTA for their entertainment? Cable and satellite now represents the larger "pie" of viewing content, so to answer your question: Over 70% of the US population.
    Note: Yes, they're paying for a service of distribution, but a consumer sees it as paying for entertainment they can't get OTA.

    Advertiser supported broadcasting has been used as a model since the start because it is the cheapest model for the end user.
    You are way off the mark with this statement. It's not the cheapest. It's the most expensive. When you take a look at what it costs to write, produce, and distribute a television show, it's expensive. Advertising offsets these costs, but to state it's the cheapest model is incorrect.

    YOU are paying for your television programming whether you believe it or not. It takes BILLIONS every year which is passed on to consumers with over-inflated prices for the very products you see on TV.

    Does a bottle of Coke really cost $1.79? Now imagine the price if Coca-Cola didn't spend so much on advertising.

    Broadcasting (over the air) works because the costs to air a show are the same no matter how many people watch.
    Where the hell do you get this stuff? Again, you are way off the mark.

    When a television show is produced, it is done so via production companies, most of which are not owned by the network (when was the last time you saw a show produced by ABC, CBS, or NBC that wasn't a reality show?).

    Once produced, it is now time to sell the show to a network. If a network believes the show will be successful, they'll pick it up, but not for staggering prices.

    Most new shows have LOWER advertising fees in order to offset the distribution rights to the show. If the show is a hit, then advertising fees are increased. If it blows, it's canceled and millions were wasted.

    The problem of any broadcasting doesn't involve the costs of production, but in licensing fees. This is what's killing the industry as more and more businesses continue demanding a bigger slice of the pie (or did you not learn anything from the recent strike by writers?)

    As these fees continue to increase, advertisers are feeling the pinch, and are now starting to realize their "potential" isn't as profitable as it was because the audience now has other venues to go to.

    The current TV situation is dire because of these venues. Advertising is actually falling (which is why you're seeing more of the same commercials AND TV programming) forcing the TV industry to take notice.

    Death is hanging over the television channel. It's dying, and like most other businesses, distributors will continue to fight to keep the cash flowing rather than try new ways to distribute, still thinking the captive audience exists.

    Expect many bad, bad things to happen to television in the next 5 years all for the sake of keeping outdated licensing fees alive.

    People fear losing their paycheck. That's the only "cause and effect" in motion here.

    One final note: Cable stations used to be ad-free if it wasn't OTA. Now look at it. People are now paying for those very ads they're trying to avoid.

     

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    Weird Harold, Mar 3rd, 2009 @ 4:29am

    "One final note: Cable stations used to be ad-free if it wasn't OTA. Now look at it. People are now paying for those very ads they're trying to avoid."

    That is because the public isn't willing to pay directly out of their pocket what it would take to make the cable business run. Would you want to pay double what you pay now?

     

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    AJ, Mar 3rd, 2009 @ 4:50am

    Vast Wasteland

    Nothing has changed in 50 years. TV is still a vast wasteland.

    Even having said that, the dinosaurs in the media won't or can't wake up to reality. See a shift in landscape? Heck, they can't even see or admit how biased they are in their news reporting.

     

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  10.  
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    R. Miles, Mar 3rd, 2009 @ 5:14am

    Re:

    That is because the public isn't willing to pay directly out of their pocket what it would take to make the cable business run. Would you want to pay double what you pay now?
    No, again you've missed the point. It's because licensing fees are exploding, forcing increased costs. People are bitching about cable prices because of the ads, not because the cost. "There's nothing on but commercials!" is now the #1 complaint of non-OTA broadcasts.

    People are more than willing to pay for CONTENT THEY WANT, not for CONTENT THEY DON'T WANT (ads, for Mike, who doesn't seem to get this point).

    If 150 million people are paying $50/mo for cable, that's MORE than enough to pay for programming.

    Do us a favor please, and read up on the dispute between Viacom and Time Warner cable. THEN you'll understand.

     

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    Anonymous Coward, Mar 3rd, 2009 @ 5:45am

    Whom do I sue?

    Fix the model? NEVER!

    The real question is who can they sue? What laws can they get passed to protect their model? Until then, who can they blame in order to pacify their investors and persuade congress that they must protect the children by caving in?

     

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    Weird Harold, Mar 3rd, 2009 @ 6:00am

    Re: Re:

    Please. The #1 complaint is commercials, and that is becuase the public isn't willing to pay what it would really cost for cable channels without commercials.

    150 million people at 50 a month is a misleading number, because you are assuming that it costs nothing to create, support, and maintain the cable distribution system, to provide customer service, installation, billing, collections, and the myriad of those things that comes with offering that service. Further, you have to think about how much programming is out there. If you have 100 channels at 12 hours per day (allowing for 1 full repeat a day of everything) you are looking at 1200 hours of programming a day or 438,000 hours a year. At even $25,000 an hour for programming (which is well below true costs) you are looking at $10,950,000,000 in programming costs. - so your monthly cable bill (for 150 million people) just went up $6 a month. When you consider that programming is costing something like 2 or 3 million an episode in prime time, it isn't outrageous to think your cable bill for programming alone would be $60 or $75 a month higher than it currently is.

    Are you really willing to pay that? Probably not.

     

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    R. Miles, Mar 3rd, 2009 @ 6:32am

    Re: Re: Re:

    The #1 complaint is commercials
    Do you even read replies? Go back and read what I put in quotes, please.

    Are you really willing to pay that? Probably not.
    First, digital distribution is much less than you think it is. Simply by changing from analog to HD (OTA), broadcasters will save millions this year alone.

    Second, the digital distribution system is already in place, and has already been paid for. For broadcasters, this is a savings, which should actually decrease our monthly bill, not increase it.

    The current switch from analog to digital will save broadcasters millions. So why is it we are seeing more commercials? Because it's the LICENSING FEES that are increasing.

    Your cable company can not give you ESPN until the licensing fees to ESPN are paid. Just watch. Soon, ESPN will eventually want more (due to loss in advertising revenue), causing another increase in monthly service.

    Our $50/mo. pays for customer support and channel subscriptions. These subscriptions should be more than enough to deliver us content without ads.

    And you can bet people WILL pay for content without ads. That's the damn entire reason we will pay - to get rid of the damn things instead of paying for both as we are now.

    Keep in mind, you're talking about the same group of people who pay $1 for a SINGLE song to own it and bypass the advertised radio station playing it for free.

     

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    Anonymous Coward, Mar 3rd, 2009 @ 6:37am

    ahhhhhhhhhhhhhhhhhhhhhhhhhh shutup NBC and stop your damn whinning or Ill add you to my boycott list!

     

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    Anonymous Coward, Mar 3rd, 2009 @ 6:59am

    Re:

    You sir, are an idiot. Considering how many people today have cable or satellite, we're ALREADY paying for our entertainment. Don't know if you have looked into it recently, but if you want network programming on satellite, its extra. Most cable packages I've had in the past included network programming at no extra charge, but I was still paying around $30 a month for all of my programing.

     

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    Haywood, Mar 3rd, 2009 @ 7:21am

    They could fix the problem, but won't. They still have a very large captive audience, with a median age of roughly 52. Programs are targeted for ages roughly 15 - 39. So you have an under served audience. The gray hairs have money to spend and spend more time in front of the tube, but are treated like they don't exist. While the target audience is elsewhere doing other things.

     

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  17.  
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    Jay, Mar 3rd, 2009 @ 8:09am

    Re: Eliminating commercials

    That was the original point of cable. Cable originally came about as a paid alternative to the commercial laden public air tv. Then cable companies and the networks figured out they could make more $ by adding commercials. Companies don't care about the best user experience, they only care about the bottom line. They don't serve their clients- they monopolized the market and leave no other choice.

    If the web is anything like traditional tv, services will start out showing little or limited commercials then ramp up the commercials once they hold a monopoly over the resource. It is unfortunate that piracy is the only way to fight for a fair user experience, but that is the world these companies prefer to create.

     

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  18.  
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    AJ, Mar 3rd, 2009 @ 8:37am

    Re: Whom do I sue?

    Wow, AC, great idea. They could hire the RIAA lawyers who, if things go right, will be looking for jobs shortly :)

     

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