PaidContent Entertainment conference: Technology is changing the business of TV and web content

The London West HollywoodI’ve attended quite a few conferences in the last few weeks about advertising, film marketing (part one and part two), TV, and Internet. Speakers at the film conferences grumbled that some of the best content was migrating to TV, specifically cable. But panelists at the paidContent Entertainment conference on Nov 3 argued that web content is where it’s at, lending credence to the adage that the grass is always greener.

After hearing presentations from Mark Suster and Robert Tercek, 2012 sounds like the year that TV finally succumbs to the digital revolution. Always the master of setting expectations, Mark cautioned that these sort of predictions are dubious at best. Forecasts about technology usually overestimate its impact for the next three years, underestimate its effect in 10, and have been plain wrong for 20 years. Being too early (or too late) is the same as being wrong, but Suster and Tercek discussed why things will be different this year.

TV is changing shape . . . literally

Viewership is up, but for the first time TV set sales have declined. Televisions are now just a large video display devices competing with billions of glowing little rectangles. Tablets, smartphones and smart TVs are redefining what, where and when people watch content, enabling more people to cut the cord from cable TV. These devices, especially when used with video on demand (VOD) services, compete with DVRs. This is because if people miss the television broadcast of their show, they can catch it on their iPads or laptops.

As an interesting side note, movie theaters are looking to TV for ideas as they shift to digital delivery and projection. From their perspective, digital screens are just large TV sets waiting for you and your closest 100 friends to watch the big game together.

Channels are losing identity

Channels are hollowing out their programming and ultimately losing their identity. Local news viewership is declining in all time slots and scripted programming is being replaced by reality TV or reruns. Remember when MTV used to play music? They’d be better off changing the brand to RTV (for realty). See if you can identify which networks air which shows:
Can you guess which channel these shows air on?
I agree. I don’t care which network runs them, either.

Internet is becoming the only necessary service

Cable TV’s emerging business challenge is how to earn money as customers unbundle their TV, Internet and land-line (remember those?) services. The cold reality is that most people watch only a handful of channels. When customers can find TV content on the Internet, many will discard the $100 per month bundled service plan. This paradigm is unkind to those who don’t adapt. The music industry, for example, had to collapse before they started making proper deals. The big question is, will TV avoid the same mistake? At least one tech writer covering Sony doesn’t think so. Of course, the cable industry feels otherwise.

So, what’s next? One theory is that channels that have migrated to an online environment will become product marketplaces, content distributers, or information services (e.g. eBay, iTunes and Google, respectively). This shift will result in a new fight for “digital shelf space” because even though content is now limitless, people’s attention and mindshare are not.

Content is democratizing

Companies like Maker Studios are reaching 200 million viewers with content that costs between $100 to $400 per minute to make. Compare that to reality content at $6,000 to $8,000 per minute or traditional network content at $50-100,000 per minute and you have a whole new level of scale. Networks trot out a few new shows every season to see which ones will run their 22-episode course. Maker Studios is rolling out entire genre or demographic-specific channels (i.e. comedy, moms, Hispanic), testing them and iterating the ones that work . . . then rolling out more.

I hope that all these changes will ultimately benefit the consumer as industries struggle and evolve. Ten years ago, we would complain that it was impossible to find anything good to watch on TV. I no longer say that because we are awash in excellent content and just don’t have enough time to see everything. There are few new offerings this fall season, so I may have time to finally start Lost. Barriers to content are falling. HBO GO has saved me from my Tivo glitches, and if you miss an episode or even a season, you can easily catch up. Easy access to great content is, well, great!