Three Tiered Model for Television

[bicker]

Folks know I'm a big teevee geek... not that I watch that much more than the average person does, but rather that I'm abnormally interested in the industry, itself.

One of the most common concerns about commercial television is the increasing invasiveness of commercial advertising. Commercials, of course, pay the bills, and over time, they've increased in number and overall duration, and they're beginning to creep into the programs themselves, as networks try to find a way to both pay the bills and keep investors from staging a coup d'état.

Consider the following... I've never seen it actually mentioned by anyone, before, as a viable idea, and I don't think many viewers will actually like it, especially, but I am coming to believe that as broadcasters try to find a new, viable business model (as their old one collapses under the weight of skyrocketing costs and revenue becoming more and more endangered by commercial avoidance), something like this will end up becoming the reality.

I envision the networks moving to a multi-channel distribution model, eventually:

1) Every show we see now on Broadcast Network XXC will appear first, in (say) April, on Premium Network XXA, uncut, uninterrupted, and with no commercial bugs or overlays. At the same time, it would be available via Pay Per View, and via Premium Network XXA's On Demand service. Perhaps at the same time, or shortly thereafter, the episodes will become available for streaming download from Netflix or other pay-for-streaming services, or perhaps even on quickly-pressed DVDs.

2) Then, in July, the episodes will be rebroadcast on Cable Network XXB. This time, they'll have commercials inserted, and perhaps some content removed. There maybe station identification bugs, and perhaps even overlays used to advertise other Cable Network XXB programming. These same versions of the episodes will be available on Cable Network XXB's On Demand service, while the uncut versions remain available, perhaps rerun in wee hours on Premium Network XXA, as well as through Netflix or other pay-for-streaming services.

3) Then, in October, these same episodes will start their broadcast run on Broadcast Network XXC. They will again have commercials inserted, just like when they were broadcast on Cable Network XXB, but in addition, they will have a significant amount of product and service advertising overlay -- perhaps as much as half of the program will have advertising for some product or service, either on a strip on the bottom, left or right. (It will move around from one spot to another during the episode.) The episodes, complete with product and service advertising overlays, will also become available on On Demand service Broadcast Network XXC makes available to cable companies, and on their websites (or through Hulu, perhaps).

I don't see any reason why (say) Heroes shouldn't be presented on a premium channel first, then a few months later on cable, and then a few months later on broadcast. It seems to me that this approach makes programming available in a variety of formats (i.e., with a variety of different levels of advertising invasiveness), and timeliness -- just pick which one you feel is worth it to you. I think this would offer the cable networks far more "original" programming to present (so it would be good for them) and I think it is a good arrangement for the premium networks as well. They would have to make room for a lot more episodic programming, but I think there is a lot of advantage to be had, offering the uncut and uninterrupted non-commercial versions, three months in advance.

So the poll question for you is simple... if this comes to pass, what will you do?

1) Go Premium
2) Go Cable
3) Go Broadcast
4) Wait for syndicated reruns or full-season DVD sets
5) Stop watching television altogether
6) Other (Don't watch television now)

 

[Tinker74]

Bicker....I love your posts!...but i confess, I can never understand them...They always make me feel so stupid..(not hard to do)

 

[freckles and boo]

What if the show stinks to high heaven? How do you sell ad-time to sponsors when they have no guarantees that viewers will be willing to watch it six months later, especially after the critics get ahold of it?

 

[Kimberly]

I'd probably pay for no overlays or commercials. I don't watch much TV because I just can't stand all the commercials on them now. Many of them are in different formats on the HD channels too, making watching them that much more annoying.

Awe heck, I watch mostly the movie channels anyway.

 

[bicker]

What if the show stinks to high heaven? How do you sell ad-time to sponsors when they have no guarantees that viewers will be willing to watch it six months later, especially after the critics get ahold of it?

Well that whole system is crumbling down now. Up until now, advertisers had to buy ad time across the board, to get some commercial time on the really popular shows. Now they're insisting on being able to buy commercial time on specific shows, without restriction. Eventually everything will be more granular.

Regardless, critics tend to have little-to-no impact on ratings six months later. Indeed, knowing that a program already has 25 episodes in the can when it first gets broadcast would be something that would attract many viewers -- they know that the network is therefore much less likely to abandon the show precipitously.

Beyond that, with this model, revenues would be front-loaded. The expectation would be that instead of relying on the bulk of the revenues coming from advertising during the Broadcast Network run, instead the bulk of the revenues would come from revenues attributable to the Premium Network and Cable Network runs that preceded it.

 

[freckles and boo]

I guess I sincerely don't understand your idea. Sponsors and other investors will pay big money, upfront, to put together a full season of a show when nobody is going to see a commercial for three to six months? That sounds like a HUGE gamble for investors and sponsors.

 

[bicker]

Figure that shows like John From Cincinnati, or True Blood, was presented completely without commercials, from start to finish. Essentially networks will produce a full season, with a distribution contract in hand securing a revenue stream from a Premium Network, and a Cable Network, before they even need to worry about getting sponsors for a Broadcast network run.

 

[Eeyores Butterfly]

I would be supremely pissed off if a system like that were to exist. Many people out there cannot afford more than basic cable- if they can even afford that! Delaying the shows so that they don't get to see it almost seems like you're pandering to the wealthy who can afford to pay a higher price to see shows first without the advertisements.

Inevitably, before the shows reach the lower tiers, spoilers will be leak. This could easily cause a drop in viewership (why watch the show if you know what is going to happen?). Plus, there are many shows that happen in "real time". Great example is the Biggest Loser. Part of the success of the show is that you get emotionally invested with the contestants, rooting for your favorite to win. If we go to this model, by the time the lower tiers receive the show, they will already know who was voted off- or who won the game! They would then not become as emotionally invested and the show would no longer have the same meaning for them. I know that when I missed an episode, by the time NBC put it on their website I would already know the outcome and it made me less likely to go back and watch it. Those that I did go back and watch I paid little attention to which would make the advertising inefffective.

It's an intriguing idea, but I don't think it will play out well in the real world. I have a feeling the backlash alone would doom the effort from the very beginning.

 

[bicker]

I would be supremely pissed off if a system like that were to exist. Many people out there cannot afford more than basic cable- if they can even afford that! Delaying the shows so that they don't get to see it almost seems like you're pandering to the wealthy who can afford to pay a higher price to see shows first without the advertisements.

No doubt that many viewers wouldn't like this arrangement, but the status quo isn't an option. The alternative that we're facing, instead, seems to be just the overly invasive model, with even more commercials, plus advertising overlays for products and services, plus prominent product placement. And even then, it appears that we're going to be getting fewer and fewer scripted programs, and more and more reality and talk programs. There simply isn't enough money to be made on "free" television anymore.

So given that the status quo isn't an option, and given that viewers wouldn't "like" anything other than free, commercial-free television, the question is whether this model would make more money than the current model, or less money. The only way this model would not be viable is if most people would choose to do without television entirely. And the only way this model would not be selected is if there was some other way for broadcasters to make more money.

Inevitably, before the shows reach the lower tiers, spoilers will be leak. This could easily cause a drop in viewership (why watch the show if you know what is going to happen?).

This will prompt a good bit less "wow" moments -- iconic events that when you hear of them six months earlier, they'll stick in your brain. However, yes, the delay is essential, because otherwise there isn't enough value in the premium product to justify the expectation of revenue from that channel.

Plus, there are many shows that happen in "real time". Great example is the Biggest Loser. Part of the success of the show is that you get emotionally invested with the contestants, rooting for your favorite to win.

I think it is a clear that this model would only be useful for scripted programs.

It's an intriguing idea, but I don't think it will play out well in the real world. I have a feeling the backlash alone would doom the effort from the very beginning.

You mean more than Chuck and Sarah working at a Subway sandwich shop next year?

Or more seriously: More than the death of scripted programming entirely?

 

[NotUrsula]

Where is the future of streaming and on-demand download in this scenario? Some articles that I've read lately indicate that the future of premium cable network subscriber bases is growing dim because of the rise of TV-via-internet. Viewers are growing increasingly program-centric now, and the internet is the best way to market to that appetite. Why pay for a premium cable service subscription when you could pay-per-view directly to the network (or even the production studio?) for just the shows that you like?

As an example, there are 3 original HBO programs that I like. In a pay-per-view download situation I could pay to see just those series, and NOT waste my money on access to boxing and movies that I can get a whole lot cheaper from NetFlix. (FTR, I don't currently subscribe to premium content, and I won't. Right now I wait to watch the programs when the DVD is released, or catch them when there is a free weekend.)

 

[Eeyores Butterfly]

I don't think this is the only way though. There is a lot to be said for having episodes available to watch on DVD/iTunes or another paid site after they air. Perhaps after the episode airs the networks could put the show on their site right away and require you pay to see it before putting it up for free. I know I would have paid to see those missed episodes before they were put up so I could catch up and see it without it being spoiled. I even checked iTuens but since they didn't put it up there it gave me no opportunity to pay for it.

The other issue this doesn't address is pirating. This is going to greatly increase pirating and it won't be possible for networks to keep up with all of it. You'd also be looking at different versions of the show because content would have to be removed in order to make room for commercials, and any product placement would mean that scenes would have to be shot multiple times which is more expensive.

Most people dont get their TV for free. They get it through a provider and choose a package that meets their needs. So it's really not a tv for "free" model except for the few homes that use the converter boxes, but the vast majority of people are getting it through a paid service.

 

[bicker]

Where is the future of streaming and on-demand download in this scenario?

Right here:

1) ... Perhaps at the same time, or shortly thereafter, the episodes will become available for streaming download from Netflix or other pay-for-streaming services, or perhaps even on quickly-pressed DVDs.

...

2) ... as well as through Netflix or other pay-for-streaming services.

...

3) ... and on their websites (or through Hulu, perhaps).

In other words, at each of the three levels.

Some articles that I've read lately indicate that the future of premium cable network subscriber bases is growing dim because of the rise of TV-via-internet. Viewers are growing increasingly program-centric now, and the internet is the best way to market to that appetite. Why pay for a premium cable service subscription when you could pay-per-view directly to the network (or even the production studio?) for just the shows that you like?

In the end you're just trading off one middleman for another (and indeed there is no reason to think that such as swap won't happen, but the point is that effectively there isn't much difference between the distribution channel being an IP download versus a Pay Per View or On Demand download. Yes, the most may change, or it may not, but the impact on the business model won't.

What would represent a big change is bypassing the middleman entirely, i.e., having producers provide content without a distributor. The reality, though, is that whenever anyone has ever gone that way, they ended up either realizing that that approach was sub-optimal (for the producer) or the approach bloomed into a secondary service, i.e., a new middleman. That's how EDS got started, and how Midwest Express got started.

As an example, there are 3 original HBO programs that I like. In a pay-per-view download situation I could pay to see just those series, and NOT waste my money on access to boxing and movies that I can get a whole lot cheaper from NetFlix.

Of course there will always be a point after which it would be less expensive to buy the package. And before that point, paying per-each would be better. That's why my Premium Network level, above, included both a Premium On Demand option (or, if you prefer, streaming via IP from the Premium Network's website), and a Pay Per View option (per-each pricing, no Premium Network subscription necessary).

 

[MAH4546]

Is this thread a joke?

By the time it reaches broadcast, it will already be available for illegal download.

 

[bicker]