Internet Sought in Television Death

Television is dead. In fact, according to some people, you should just cancel your cable/satellite subscription now and toss your TV set out your window. More and more people are watching television programming on the Internet for free and without commercial interruption. As television viewership drops, so will the ad revenue. Without that ad revenue networks and cable stations are left searching for an answer to their biggest problem – how to make money showing their programming online? But the biggest problem in this whole equation is that they view streaming TV shows on the Internet as a problem.

I’m not suggesting this is a story without casualties. Make no mistake about it, the previous business model used by television for decades is sucking in its last few breathes. But instead of screaming bloody murder to the heavens they ought to be focusing on how this transition will free them up and give them the opportunity to make even more money. If they handle things properly they should be able to produce better, more popular programs and provide more efficient and lucrative ad space for their sponsors.

But before I delve into how TV can come out on top of all this I need to point out a few things that we all must concede:

1. The technology exists, it’s just not widespread. The same cable that feeds television into your home is also the cable that connects you to broadband Internet. We’re not talking about a complete overhaul of the current infrastructure we’re just talking about the natural progression of improved bit rates, download/streaming speeds and other technical crap I would struggle to speak about just in laymen’s terms.
2. No, I’m not talking about you watching all your television programming and movies on a thirteen-inch laptop screen. I’m taking about the newer “television” that will be more like a high-performance monitor that gives you the same quality picture and sound through the Internet that our current big-screen HD TVs already do. In fact, some of you can already hook your computer or laptop up to your HD TV and use it as a monitor. NetFlix has already installed their software on multiple models of TVs, Blu-Ray DVD players and gaming systems so that they’re fully equipped to stream movies straight to your television.
3. The ability to stream live programs already exists and will only improve.

So we can agree that not only does the technology already exist but it the coming years it will improve. What those technological advances will do is make the current group of consumers viewing programming online grow and take a niche activity and make it global. Sounds pretty good, right? No more cable/satellite bills, everything will be viewed for free online. Well, free for us, but your favorite shows aren’t non-profits. The reason they’re produced is because of the ad revenue. The better the show, the more viewers it acquires. The more viewers a show has the more money the distributer can charge for ad space during that program. But therein lays the problem.

As it stands right now, commercials are 100% avoidable. You can go online right now and watch any episode from any season of any television you show you desire completely commercial free, all at DVD quality. It takes a little bit of “inside information” (basically just knowing which sites to visit) but it’s all right there, waiting for you to view it. This is not a good thing for the television industry. Watching television has never been free. The price – even before cable and satellite services – has always been those blocks of time during a show when sponsors told you about their products.

So if all of this is available right now, what do the networks and cable channels do? First, they have to embrace it. This isn’t a leaking sieve that they need to fumble their finger into, it’s an opportunity to blow up the old model, keep what they want and reinvent the portions they wish they could change. It’s happening already, with or without them, they might as well get on board now before they lose too much ground. I’m not talking about Hulu, either. Hulu is a band-aid with poor adhesive.

The current scheduling model for a television channel is restrictive and smothering. Because of that, they have to be conservative and careful about what shows are produced and what they can get in return for them. But what if you eliminate the existence of prioritized time slots? You’re no longer tied to committing certain shows at certain spots and rolling the dice that they pay off. You’re now able to tailor programming directly to your audience and not to your audience’s personal schedule.

If you think there’s no good quality programming available these days, don’t blame the people that are producing and distributing that content. They’re essentially testing the hell out of the current audience and trying to provide save, easily digestible shows for the limited spots they have available for their target demographic. If you take those time constraints away it opens up a world of opportunities for other shows to get produced. There are only so many slots for 30-minute sitcoms, 60-minute character dramas, talk shows, game shows, news magazines, etc. There are more good ideas for quality television programming out there than there are allocated time slots to view them. With limited time restraints for broadcasting programs those that make the decisions on what you see have to be much more careful and reserved.

Shows are slaves to their time slot. Viewers have relatively specific habits. Younger crowds tend to be out and about on Friday and Saturday night. Children are in school during the daytime. There’s a reason soap operas plaster every network during the day. You could take a great show, put it in a horrible time slot and it will die a quick and painful death. What you’re left with are the networks and cable channels best guesses for who will be watching television at any given time. By moving and producing content to the web they’re freeing themselves to fully cater to the a la carte viewing experience.

Moving material to the web also gives it increased exposure. Instead of having to be in front of your television at 8pm on Wednesday to see the show you like you are now free to view it whenever you like – later that evening, on the train commute to work in the morning, on your lunch break, etc. Distributers are no longer crippled by the personal schedule of their viewing audience. Instead of collecting 1 million viewers during their designated weekly time slot, they can garner many more over the course of that entire week. Better exposure, more views.

This brings us to the ads. As it stands right now, television commercials are like free throws in a basketball game: there are a limited amount of them and each one is an opportunity to increase their chances of winning. If anyone out there thinks that the current two minute block of four 30-second commercials is an accurate and effective use of their ad space they’re living a lie. Much has been made about the effect the introduction of the Digital Video Recorder (DVR) has had on commercial viewership by allowing viewers to completely bypass commercials when watching their favorite programs. What those people fail to realize is that commercials have been bypassed for years; it just wasn’t done by an electronic box. My buddy Creel can change channels as soon a program goes to commercial and literally hit the return of the show within 5 seconds; it’s quite a talent and one I’m sure is shared by many. The networks and ad agencies are essentially electing to put Shaquille O’Neal on the free throw line and cross their fingers in the hopes he can hit just one of his two free throw attempts.

What they need to do is shorten the duration of the typical commercial to 15 seconds and limit the number shown to two per break. That’s easier said than done because ad agencies are almost as stubborn and short-sighted as newspapers. The great thing about online viewership is that those viewers have made a more dedicated commitment to the program they’re watching. They’ve visited your site, clicked on the show and are committed to giving you that block of their time, at least more so than by simply tuning into your channel. Reducing ad time increases that ad’s viewership. No one is going to click off the show’s site because it’ll take longer for them to travel to another site, find another show and open that dedicated window than it would for them to just watch two 15-second commercials. Not to mention that there’s no way for someone to leave a program 7 minutes in and return to the 8 minute mark, they’d essentially have to start watching the show all over again. Essentially, you’re eliminating the viewer’s ability to change the channel. Hell, this is an ad agency’s dream come true – dedicated, inescapable viewership for what they’re promoting.

Another massive advantage Internet ads have is their future ability to customize the ads shown to the particular viewer. Sites will be able to instantly pull viewer information – age, sex, race, financial standing, personal viewing tendencies, sites visited, spending habits, etc. – off the IP address of the person watching the program and they’ll have the ability to target audiences like never before. Have you been checking out car makes and models online? Well check out the new Lexus. Did you order Pizza Hut online last weekend for the game? They’re currently running a special. Companies could actually produce multiple versions of an ad and have the most accurate, almost personalized ad shown to the viewer. Instead of carpet-bombing an entire countryside with tons of explosives they’ll be able to hit their target audience with near sniper precision, reaching demographics inside other demographics.

Instead of selling a 30-second block to be shown during a particular show’s time slot, distributers can now sell the rights to a show for its initial release. The season premiere of LOST goes live next Tuesday at 8pm on ABC.com? A company can now purchase the ad space to that show for the first night, the following 12 hours, the first week or the coming month; all with the ability to update that ad space with different commercials as time progresses. Look, if a 2 minute YouTube video of someone in Arkansas playing a song they created on their keyboard can get 750,000 views over the course of a year, what could a popular television program garner? All of a sudden, ad space has shelf life it never dreamed of all while maintaining the ability to stay current and fresh in its presentation and message.

All of this also has a positive effect on the quality of the shows you’re viewing. By reducing the commercial breaks you improve the general flow of a program. Instead of the typical teaser/4-act structure that have forced an hour-long show to compartmentalize their content to ensure they leave the audience with a hook to get them to come back after the 2-minute commercial break they can loosen that stranglehold on the narrative and open it up to allow the story and characters to breathe.

We all like to make like we can’t stand commercials and advertisements but the fact of the matter is that we need them as much as they need us. We rely on those commercials to tell us what is coming down the pipeline; be it a new program, a new film, a new product or a new service. We’re a global community of consumers and we love it. People enjoy buying into the hype as much as the hype enjoys being bought into. As long as there’s a demand for television programs there will be a demand for commercials. Eventually we’ll see an independent site pop up that can show you what’s on every channel at the current moment with a small screen of streaming video, as well as how many people are tuned in, sort of like a high-end TV Guide (hello? TV Guide? Are you reading this?). You’ll have the choice to either tune in to what’s paying at the moment, start the show from the beginning, watch a different episode of that show, etc. This isn’t a death sentence for television, it’s a gift. They just don’t know it yet.