Oldskooler Ramblings

I ran across an interesting topic today in one of of the mailing lists I subscribe to:

Why have TV when you can stream anything you want any time you want from the internet?
Where is the place for it, and advertising when you can download shows for free, or close to it?

As a video content producer who has researched online distribution,  I feel somewhat qualified to answer.  You may disagree, but it makes for interesting speculation.

First of all, you can’t currently stream everything for free.  Less than 3% of all major networks’ shows are available online from the networks (ie. legally).

Secondly, TV won’t die any time soon, but is changing into a quasi-music-industry model.  Meaning, pop music artists today hardly make any money off of their CD/online store sales; instead, they make their living from live shows.  From the standpoint of the artist, all of the radio play and CD sales are “advertising” to go see the live shows.  (This is not the standpoint of the publishers, which I will tastefully not comment on in this post.)  So how is TV like that?  In the case of television, shows like Heroes, 30 Rock, and CSI are available online 1-7 days after the broadcast.  When you go to watch them online, you are treated to advertising — but unlike broadcast television, there is no way to skip the advertising, as the DRM’d player won’t let you.  (No doubt hackers will find a way around this, but for now, that’s the case.)  To broadcasters and advertisers, a single advertisement that you cannot skip is worth a dozen that you expect the user to skip with VCRs and DVRs.  In these shows’ cases, the broadcast brings in advertising dollars, sure, but more serves to drive the user online, where distribution can be audited (think Neilsen ratings with a much larger sample size) and other company offerings can be promoted (like DVD sets) without cutting into broadcast time.  There is a very large market for DVD sets of shows, and as long as the set contains extra materials (commentary is usually a requirement), the set can sell to a customer even if they have watched all of the shows online.

There is a tipping point, but we won’t get there until high-speed broadband becomes a utility in every home (ie. 6mbps or greater, enough to support picture quality identical or better than broadcast SDTV).  The only reason it is happening at all is because networks are trying to reclaim their user base.  Perform an inventory of all of the shows being offered online and you will find that, almost universally, they are shows that are followed by the technologically savvy.  Putting nerd-centric shows like 30 Rock and Heroes online makes sense because that is more of where those shows’ viewers are anyway (“I spend more time on the computer than on the couch”).  Conversely, putting shows online like talk shows or old reruns doesn’t make sense, since the viewership of those shows is primarily non-technical or lower-income and wouldn’t have broadband.  (One of the few exceptions to this are soap operas, because each show of a soap is broadcast only once and is not repeated/re-run.  Putting them online gives viewers a second chance to catch up on the story in missed shows, which gives the broadcasting company a second chance to earn advertising revenue.)

My prediction is that the future of traditional broadcast television will ultimately be determined by the future of online/digital copyright law.  But that’s a topic for another day.