Category — television

The weight of supporting a network, coupled with the flight of audiences will point the way to a new, cheaper delivery system and the end of traditional network TV.

In Fast Food Nation, Eric Schlosser says that a two percent drop in sales on a particular food line or product gets quick serve restaurants like McDonalds to change their ways. For example, those seeming small drop in sales helped eliminate the Styrofoam packaging for Big Macs and other sandwiches.

Television faces a far greater loss in audience, thanks in part to the current 8 percent installed base for TiVo-like digital video recorders. These devices eliminate the main strength of broadcast networks: Delivering a buyer’s ad to a large audience at a specified time.

Peter Drucker, in Management Challenges for the 21st Century, has another explanation for how and why internet-based, on-demand viewing may crush TV networks:

Again and again in business history, an unknown company has come from nowhere and in a few short years has overtaken the established leaders without apparently even breathing hard. The explanation always given is superior strategy, superior technology, superior marketing, or lean manufacturing. But in every single case, the newcomer also enjoys a tremendous cost advantage, usually about 30 percent. The reason is always the same: the new company knows and manages the costs of the entire economic chain, rather than its costs alone.

With the cost of moving digital video dropping, and the costs of maintaining a broadcast tower increasing as networks and affiliates switch to HDTV transmissions, it’s easy to see that internet distribution will soon enjoy a 30 percent cost advantage. That’s in addition to the superior technology used by Comcast to deliver on-demand programming or the cutting-edge efficiency of Google’s ad network.

So why is traditional TV still around?

One factor keeping networks afloat even as audiences dump scheduled programming and advertisements: Buyers are just as slow in recognizing the Teutonic shift in user habits.

Unlike McDonalds, television stations take advertising money in through the back door and serve up unwatched spots at the counter, while television ratings, controlled by an outside source — Nielsen — miss the mark in tracking which ads are watched and which are not.

McDonald’s controls the whole chain, and has fewer audiences — shareholders and customers — to please. Networks deal with advertisers, affiliates, audiences, shareholders, content producers — in short, the system of TV advertising is keeping traditional, linear broadcast television afloat.

Traditional networks are only now moving to eliminate the added costs of supporting an affiliated network of broadcast distributors — by reducing or cutting the amount of money given to local affiliates and, more creatively, by offering shows via internet distribution, whether through outlets like the iTunes store or by streaming the shows on their own web sites.

These experiments must grow larger and bring bottom-line returns quickly if networks are to avoid advertiser irrelevance.

Sites that suggest music will soon suggest TV shows

Earlier this week, Matt Jacobs broke down how much his TV viewing would cost him if today’s $1.99 iTunes TV downloads become the norm.

That got me thinking about this new world many say we’re about to be in, one without TV networks that provide a linear stream of programming.

Many people I know in the TV industry think that there will always be a need for linear programming — that enough people just want to turn their TV on and “watch what’s on.”

Some wonder “how will people know what to watch” without a linear channel to turn to?

To me, it seems like the writing is on the wall — linear programming will not survive.

However, in a world without traditional TV networks, how do shows get produced? And, how do people find shows they are interested in?

There are several existing media models that point to an effective way to distribute and promote television shows without linear programming:

1. Paid downloads: iTunes, Google Video et al. make sense to most — but whether downloads are enough to support shows remains to be seen
2. Free downloads: Ad-supported (legal), BitTorrent (typically illegal)
3. Streaming, suggestive viewing

Idea number three is the one that grabs me.

Imagine an extension of Pandora.com or Yahoo Music that plays TV shows.

Let’s take Pandora as an example. You log on, and type the name of a song or music group that you enjoy. The site then begins playing similar music, often from obscure artists. You then rate the songs and hear more songs that are most likely new, yet comparable to songs you like.

PandoraTV could work in the same way. You log onto a former network’s website, or onto Yahoo’s video site and type the name of a TV show, or even favorite episode of that TV show. Then, this virtual network plays back similar video that you rate, eventually narrowing down the video selections that you see based on your ratings.

When you find a new series that you enjoy, that network might let you download advertising supported episodes to watch later. You could even subscribe to a feed of the show, so your digital video recorder could always have an episode waiting to show you when you turn on your TV.

This model also suggests a way to offer show pilots — or beta tests in Web speak — to an audience.

PandoraTV just streams a scene or two from a pilot, and if enough people give it the “thumbs up,” the network knows it stands a chance of producing a hit.

Here are some uncessarily dorky looks into my musical taste:

• Dan’s Pandora favorites (trust me, it’s embarassing)
• Yahoo music

I can’t wait to be able to create similar TV channels for my friends to watch.

quickly: if you work in TV, read this. if not, save money to pay for tv downloads. they take over soon.

So for the first time Friday night, I decided to watch my favorite TV show “Battlestar Galactica” live.

I’ve seen every episode of the show, now in its third season, but had yet to watch it when SciFi shows new episodes at 10 p.m. Fridays.

With 10 p.m. rolling around, I hit pause on “Rocky” recorded on our ReplayTV and switched to live TV. I then glanced at my laptop and opened it up, too.

Checking on my favorite RSS feeds, I saw many blogs talking about new IBM research “The end of television as we know it.”

I quickly opened up the research paper as “Battlestar” began, hoping to glean some info about the study before the show began in earnest.

The study is a winner and is yet another “must read” for those in the TV business.

Figure 13 made me laugh out loud – in 2008 it’s believed that storing 10,000 hours of TV will cost $236. For standard definition TV, I assume they mean a 10 terabyte hard drive will cost $236. Crazy. Even better – they believe the cost to stream one hour of encoded video will be 9 cents. Again, I assume they mean it will cost 9 cents to move 1 gigabyte of streamed video to an end user – a giant fall from current rates for Windows Media and a gigantic fall from rates for Flash video.

Figure 6 is another winner – showing the many emerging revenue models for video creators and aggregators. Not sure which model works for broadcast news, though.

The threat for those in broadcasting is here — “Networks will be extinct in fifteen years” — yet the opportunities will be amazing, if embraced.

In any case, I yet again missed watching “Battlestar” “live.”

A new web site looks like a winner for getting new customers to place cable advertising. spotrunner.com offers off-the-shelf advertising and campaign scheduling via their website.

They claim to offer national coverage, and the three demo ads they have online are pretty smart for generic ads.

I don’t know why this couldn’t be recreated on a local scale by a broadcaster, ad agency or cable network, however.

I like the fact that it is automated and online — which could make it a success for a small business searching for a revenue boost at 3 a.m. (or 7:15 p.m., for that matter). via paidcontent.org

Better Living … helped get a song out of my head and onto my ipod.

Benny Benassi & The Biz invaded my head this weekend when a Wendy’s commerical featuring a hamburger EQ bouncing up and down got me to stop fastforwarding through commericials and watch.

Wendy’s did the right thing and put the commercial on their website. (Sadly, they did not provide a permalink to the commerical. )

Every commerical should be on that company’s website. If you spent the time and money to put the spot out there, let people watch it when they want to, if they want to.

In fact, why didn’t they link to the iTunes music store so that visitors could buy the song, and Wendy’s would get some money for referring everyone?