What’s wrong with this picture:
Some organisation decides to broadcast a movie or TV show, at a time that they deem “the best” to maximise their profits. The organisation has commissioned the programme at great expense, and they decide to chop it up into little pieces and place a plethora of annoying adverts in it to make money.
In order for me to watch the programme, I have to pay my Cable TV company to see it. In essence, I’m paying to watch advertising. I’m paying to get annoyed.
This is the traditional method of delivering private TV stations into the homes of many hundred million people around the world. The way this happens is slightly different from country to country, but the principle remains the same – or shall we say WAS the same – for the last several decades.
Because with the advent of services like Netflix and Amazon Prime, who is stupid enough to watch a mediocre programme live on air? Time Delay Technology (like DVRs, DVD and even VHS recorders) have really only delayed the inevitable. Even “we’ll send you DVDs by post” services didn’t quite make an impact and were quickly replaced by streaming services.
The Beginnings in 2000
I remember back in 2000, or around that time, there was a Chinese website – highly illegal of course – which for $99 per year offered anything from cracked software to movies and TV shows. Members could download as much as they liked, burn things to DVD and use such cracked warez.
Back then I thought, “imagine I had a legal alternative to this service – I’d sign up immediately”. The problem we had back then was not so much the devices at home, even though it wasn’t easy to connect them to big TV screens as it is today. It was the connection speed to the internet that held us up.
I remember I was with Homechoice at the time: for £40 per month I’d get a 512 kBps connection (another 512kBps was reserved for their abysmal TV on demand service). Nobody could offer anything faster at the time in the UK. But that wasn’t fast enough even to satisfy SD streaming really, and DVD and traditional television had the upper hand, at least in terms of quality.
Those however were the humble beginnings of a revolution which has only just begun.
Fast Forward 15 years
Today (2015) streaming media services are commonplace. Even though iTunes and their iTunes Store were the first to offer an integrated experience from an online store to a device, they no longer hold the monopoly. Paying for music that you already owned again and again was working for the record industry for many years. It no longer does.
The same holds true for TV services: Streaming videos, even streaming video games, can now be had for less than the price of a cable TV subscription. There’s really no need to buy physical media anymore unless you feel nostalgic.
Where does that leave the cable providers – and more importantly – the private TV stations who existed for the sole purpose of eliciting money from advertisers? How long will advertisers pour money into a medium that nobody is watching anymore?
Where will Sky & Co be in 10 years time, or ITV, or any of the major US networks?
Fast Forward another 10 years
Soon there will be the point at which the classic “on a schedule” TV programming will no longer be watched, purely because there are cheaper and better alternatives out there. Without advertising.
A large broadcaster will no longer be able to commission high budget TV shows in the future, and instead the equivalent of Amazon Originals will be in charge of new shows (and how we watch them).
Industry professionals probably know better how much trouble they are in than I do, but I don’t see them doing anything to prevent their own demise. I see things like “watch it again online if you’ve missed it” type approaches, along the lines of iTV Player. Or the idea that people are charged for single episodes directly by the broadcaster.
But even the “iTunes approach” (buy once – own it forever) isn’t going to hold up much longer either: because what’s the point in paying $40 for one season of a show, if for $7.99 a month you can see thousands of such shows? There is no need to “own” anything anymore, neither music nor a video file as long as we subscribe to a service that will make it available if and when we want it. How much more convenient is that?
In the audio world, Spotify has been leading the way for a while, but there are many other similar services available. It didn’t take long until this business model (pay per month, unlimited streaming) was available to videos too, which brings us up to date to 2015.
To me it feels like FINALLY a form of TV watching has arrived, or taken over, that I had dreamt of for many years. I embrace it and I haven’t watched “traditional TV” since 1998 (other than in hotels once a year).
Where does this leave traditional broadcasters?
That’s the $100.000 question, is it not? Where will the multi million dollar broadcasters around the globe be when nobody tunes in anymore? When that rerun from 20 years ago at 3am doesn’t cut the mustard anymore? When once loyal viewers switch off for good and invest their time elsewhere? And when advertisers aren’t prepared to pay thousands of dollars per second anymore?
Perhaps they should create several other channels with the same content, maybe even exactly the same, but delayed by an hour or two. Yeah, that’s a great idea. Dave Plus 1. Awesome!
Putting programming – including adverts – online for a limited time is a good start, but it doesn’t really solve the long term problem of how to make money. Maybe preroll and overlay ads are the solution… cast your mind back for a second and tell me: when was the last time you’ve clicked on an overlay ad on YouTube? How about NEVER?
I wonder how they will be able to tackle this dilemma. Or if they won’t be able to do this at all. Perhaps broadcasters will simply die a slow death, cutting personal costs and programming budgets further than they have already, until there’s really nothing left for them to do than sell the real estate they own for a quick buck.
How many years have they got left? Five? Maybe ten? Who will be around in 2025?
The clock is ticking, and I’ll be watching.