Splitting The Bill

The best and probably only good thing about being sick in bed with the flu is that its the perfect opportunity to catch up on trashy television. And no, I'm not talking about Oprah. Thanks to iTunes I went on a downloading binge that included Lost, Battlestar Galactica and even quirkier titles like Eureka, Kyle XY, the Dresden Files, Jericho, Blade and Surface. And that's when I discovered the catch. A lot of a niche programming that ends up on iTunes also ends up getting cancelled. Anyway, it got me thinking. In an on demand future - just how will television get funded? 

TV shows can get axed for all kinds of reasons. A competitive time slot against American Idol, fickle audience ratings or a studio executive having a bad hair day. Ironically, a lot of these shows are now ending up on the iTunes store making it a kind of elephant graveyard for discarded television. However, if you read through the user comments on these shows you will notice something interesting. In many cases, although these shows tanked on first broadcast - over time they have managed to accumulate a large and loyal audience. Trouble is, by the time that happens - its generally too late and everyone has moved on. So even if niche audiences want to buy niche content - the economics just don't match with the way that television is currently produced. So much for the long tail.

There's a book by Stephen Johnson that's as interesting as its title. Its called 'Everything Bad is Good For You' and one of its big ideas is that as popular culture becomes more complex, consuming it actually makes you smarter not dumber. Its a tantalising possibility and certainly right on the major point. TV drama is getting more complicated. Multiple character arcs, hidden clues, threaded story lines, obscure referencing and pay offs that can take multiple seasons to crystallize. Its also why buying DVD box sets of complete seasons provides a better experience than trying to watch shows as they trickle broadcast each week. And more tellingly, why downloading TV may be even better than DVD.

There are several reasons for this. Subscribing to a show, and having the latest episode pushed to you as soon as its ready beats waiting for your local network to screen last season's episode, or deciding to remove a series altogether from their programming schedule. Secondly - online delivery fits well with the way that the new generation of consumers will increasingly discover entertainment. Namely, through each other. Network based discovery examples include forwarded links to YouTube clips, embedded videos on social media profiles or intelligent recommendations from aggregators like iTunes or Amazon. Thirdly, there is a wealth of online content about television - reviews, fan material, episode analysis and audience detective work - just waiting to be aggregated and presented as an overlay on the original show. It makes decoding a series like Lost a lot easier, and is a hell of a lot better than any trite DVD extras feature. And now that it has become simpler to display downloaded content on garden variety televisions, all of the above will be increasingly relevant to your average, rather than alpha geek audience member.

Except for one thing. Most of the television currently available for legal download was formatted and financed by an entirely different business model. It wasn't made for individual episode retail. It was designed to deliver mass audiences at a particular point of time, and financed accordingly. And even then, most shows only become really profitable when enough seasons have been made for the series to go into a syndicated repeat cycle.

So, without a fat network output deal - who would be crazy enough to spend millions of dollars per episode for a desert island drama with polar bears and invisble dinosaurs? You certainly couldn't rely on a user pays model unless you were very sure that they would indeed pay. One possibility is that in the short term we will see more cheap and cheerful web entertainment, like Michael Eisner's Prom Queen series on Myspace. Certainly, the present immaturity of new media business models means that the only current solution for profitability is to keep production costs low. However in the longer term,  prepaid sales like the 'Season Pass' feature on iTunes may become a more important metric in determining whether pilots get turned into series, and series continue into a second season.

That's not to say that the advertising funded model is dead. Quite the contrary. We are just now seeing the beginnings of the ultimate mash up between the targeting and price effificency of Google's Adwords with the brand impact of television advertising. The tricky bit to get right is measuring and delivering advertising when viewing is not concentrated at a particular time and on a particular channel, but fragmented across millions of sites, devices, and moments. If you read between the lines, that's what the new Newscorp joint venture with NBC is all about - creating a decentralized platform to commercialize eyeballs on content - whether they be on a portal, a social network, a blog site or even shared directly between consumers themselves.

The important thing to realise about all of this is that the future of television is not being driven by greedy media executives trying to be more creative about making more money. Or not entirely, anyway. There are deep changes in the nature of audiences and entertainment consumption taking place. Unfortunately, how fast those trends become solidified into everyday couch potato reality is as much in the hands of the lawyers as the bean counters. And that's never a good thing.

Comments

[Stefan Willoughby]

The concept of hyper-distribution was kicked around at The Australian Film Television and Radio School (AFTRS) in 2005 by Mark Pesce in his lecture, "Piracy is Good? New Models for the Distribution of Television Programming". Transcript: http://aftrs.edu.au/index.cfm?objectid=AA6674E8-2A54-23A3-66C039C5D9162F19

Mark discusses how BitTorrent has changed the way we view television, instead of being told when, where and what we can watch we are getting our TV when we want it and how we want it and in the process we are bypassing the old value chain of Producer>Distributor>Broadcaster>Advertiser.
He suggests a new model, that of Producer>Advertiser.

All in all it is well worth a read, hell you can even download the video of the lecture via BitTorrent.

[Victoria Castle]

In 2005, 57 percent of U.S. TV viewership was on cable content networks versus broadcast. Cable in the U.S.collects only 30 percent of advertising revenues today, despite garnering almost double that percentage of viewership. I expect advertisers will take a while to figure out the best way to profit online using niche, long tail content, from independent producers. As the models continue to lag content owner will have a hard time making a profit and staying a head of the curve.

[Stephen Pascoe]

Get onto ITunes and download Rocketboom, Lynchland and TED. After three years of financial pain, Rocketboom now has regular advertising support and the latter, TED, has solid support from BMW. These programs are fresh and creative but the vast bulk of podcasts are run on love but everyone needs to eat. I firmly believe that video/television on demand is the future but that it won't be a reality constant until advertisers can trust their brand with the content (as BMW does with TED). TV was initially seen as radio with pictures and the programming reflected that. On demand television is now seen as TV when you like it, we still have some evolving to do.

[Harris Madden]

Hey Mike, great article as usual. It prompted a couple of thoughts. First, the changes you describe will only have a short term impact on TV and film production values. As soon as the evolving distribution model crystalizes from amongst all the curruent competitors from Joost or Imovies to Tivo to XBox etc. -- and there is a degree of certainty -- content producers will then invest and find the sweet spot of budget/risk/return. The new model will inevitably be 'many to many' and will no doubt freshen up the content industry and create opportunities for new talent to shine. It will be interesting to see whether the distinction between a 'television program' and a 'movie' still exists in the same way in five years time. Second point is, its unlikely the advertising model is dead or even under threat -- we'll just see it take on new forms from branded content from to permission marketing-driven and localised IPTV media delivered by Google and or MS.

[CHRIS SIMON]

Hi Mate

Hope ur not iTune grave-yarding 2-DAY! 'Cos u shld B pledging around the world with Big Al (Gore to his friends) and making this massive effort towards solution! I think here is a perfect example of changes in the consumption of entertainment. The original vision of Kevin Wall, worldwide producer of 7.7.7 and owner of Control Room in the US, painted a measurable and deliverable 2 billion eyeballs concentrated at a particular time-that joined all the dots of fragmentation and became one community. Whilst "the message" is obviously carbon capture solution and pledging change to reduce CO 2 emission and help avoid a collision in climate, this is an Event that no matter how many sites or devices is already in our kids' kids future text books! So I'm not just talking Live Earth-I'm talking any decentralised platform sharing content across millions-because it's great content or a great message. Content is no longer a physical component-such as the spaces or brands that Google's Adwords might be analysing. A lot of this stuff is closer to the choice or download model across the array of syndicated repeat couch potato shows, movies, 'doccos, sport and music that we all occasionally enjoy….But this is OLD and recycled content…

Recycling being operative today-I'll get back to my Live Earth or Global Warming metaphor. It's still based on the idea and what's in it for the person 'using it'. If you can openly participate with it and it invites you to spill emotion-it might not be a show, a movie, a documentary, a sport event or new music download. It might be the joining together of uploaded feelings about particular issues that everyone expressed in their most expressive form…Say SMS or MMS or video or games or simply words-like this enlightening piece you have just written. If these "expressions" were managed or directed as well as Kevin has directed Live Earth-you would have priceless capsules of entertainment and community that no standard 2 hour highly produced blockbuster could even compete with. (Not forgetting all of Kevin's helpers making Live Earth a cohesive history in the making! Like obviously MSN Channels worldwide and Chugg Entertainment and Fox in Sydney and all the other Event and Entertainment Organisers in all the other countries!) I must admit-I wish I was a FOX man 2day! I've got 2 mobile phones tuned in to various TV Channels-my computer of course with MSN ringing up the pledges-2 TV Monitors and Radio-But I'm still not gonna be able to transport myself back in time to Tokyo-Shanghai-Antartica-Hamburg-London-J0-burg-Rio de J-and New York-New York….So good I'd watch it ONCE all the way thru, if I had Fox! That's watching from NOW until late tomorrow morning SAT-SUN! And SMS'ing-MMS'ing and uploading-downloading "expressions" and "emotions" for one and a half days all around the world!

Now that's entertainment!

Chris Simon……7.7.07-
STOP THE WAR….ming at http://www.wotnext.com.au/link/direct.asp?id=5080

5 STAR Emission Ratings Gratefully Accepted! Or don't give me any ratings, (particularly if ur the guy pressing "poor"..Shame on you when it's to stop War….ming!)! Just go to our free Nokia SFF Award Winner at You Tube on http://www.youtube.com/watch?v=l6HJ9Go-dEw

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FROM FRIENDS OF AL GORE,SIR RICHARD BRANSON AND LIVE EARTH ORGANISERS WORLDWIDE: Thank you for this feature Australia and thank you for your support. We love what Telstra’s wotnext.com.au is doing on Global Warming and your People’s Choice Mobile Movie Award Winner ‘Snow’ of The Sydney Film Festival is quite beautiful. Why did it not get played in Cannes?

[martyn reeves]

I am seeing some interesting new technologies like Hiro Media which allow content owners to incorporate advertising into downloaded videos. Nothing new in there I hear, except the file can come to you from any source - ftp, BitTorrent, CD, email - whatever and the advertising is both dynamic i.e. it changes and theuser cn also specify preferences which are good for him/her and alos for the advertisers who can more easily target ads. I can see how this would work well with "hit shows" as well as "long tail".

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