Challenge the Myths of Internet TV with Reality

There’s huge money to be made, apparently, for consultants who project radical future change. In TV, that means suggesting TV becomes a variant of online video. (Really? We need better produced cat videos?)

But the rest of us have to earn our money based on reality. And lately there have been some interesting truths to help anchor TVs future in reality.

TV Works Because of Subtle Market Benefits Hidden in the Economics of Cable. A recent Atlantic article (link here) discusses how the economics of TV work for advertisers because of casual station viewers.

Unfortunately, the author in the Atlantic is dismissive of the wide range of viewers. The situation is far more interesting with committed viewers (probably 20%), periodic viewers, casual viewers, and drive by viewers. Who will pay for an internet subscription? Only the first group. So with 80% fewer viewers, ad revenues go down by 80% (or so). That’s not going to pay for good content.

Internet Subscription Fees for TV Would Have to be Far Higher than Through Cable. HBO recently discussed the economic return they get from the cable ecosystem – economic return that allows them to offer $10 to $15 subscriptions.

Shift to the internet and each individual subscriber would have to pay those costs. That means HBO subscriptions so high that they believe people wouldn’t pay for it. Truth is that cable aggregation lowers consumer prices for the package of networks.

My prediction is that if cable disappears, the days of “only” $100 monthly cable bills would be gone. And we’d enter a world of $200 to $300 monthly bills – just to get the same stuff.

“There’s Nothing On” is Mostly Human Condition – Not a Solvable Problem. New TV providers are claiming that by shifting to the internet we’ll always find something on we want to watch. But we won’t.

In the mid 1990’s I did research for a provider who thought offering 200 channels would solve the “nothing to watch” problem. Guess what we found out? Consumers told us that the jump from 4 to 60 channels didn’t ensure there was something to watch. So they didn’t believe jumping to 200 would be any different. It was brilliant consumer honesty.

Periods of entertainment dissatisfaction are human – perhaps reflecting a fundamental ennui. So unless technology solves the existential human condition, we’ll alway fight the problem that nothing meets our expectations for viewing.

The Future of TV is…Television. I was reminded of this in a recent AdAge article (link here) by Thomas Morgan. Morgan should know given the wide range of future TV approaches he’s been involved with. His conclusion? “It’s the programming, stupid.“)

At this point in history, TV is more vital and alive than ever. And unless you embrace that reality —- what I call the circus of TV – your new TV approaches aren’t going to fly. There can be evolution. But, whatever happens, TV as it exists today is THE starting point.

Many New Media (esp. TV) Studies are Inherently Flawed. In a recent blog post (link here) I noted several ways people mis-interpret data. A major error that’s driving us crazy with new media is when writers fail to distinguish between “I once did this thing” and “I do this thing all the time, every day”.

Take Netflix. It replaces the video store (and always has). But dramatic headlines claim that huge numbers skip viewing TV to view something on Netflix. In reality, the numbers show that a lot of people every now and then view on Netflix instead of on TV. But that’s not new behavior.

I’m so old I can even remember the days before Netflix. And I can remember many evenings I watched something from the video store instead of watching TV. I even knew some people who disconnected from cable and decided to live off what they could rent at the video store.

Truth is, there’s no proof that these studies measure anything beyond the behavior we’ve known for decades. Nor is there proof that the behavior is happening in larger numbers. We need some clear research on Netflix, but certainly aren’t getting it yet.

A Cultural Elitism Drives Anti-TV Fervor. Can’t say I have a study or article to back this up. But I do have a pile and a half of comments about the future of TV – often in reply to ideas I contribute. Sorting through all that commentary there’s a clear cultural elitism at work. All too often we hear “I can’t wait until it’s all internet TV and we won’t have all the crass stuff that’s on TV”.

But let’s check out reality. Internet TV is nothing if not crass – horribly crass. In fact, the idea of “TV as cultural decline” has survived for decades. And its put forth by an elite who hate the circus that most people love. But has that elite taken a serious, clear-eyed look at the internet? Apparently not – it’s far easier to pick up the same old canard.

TV Will Change. But Beware the Snake Oil Salesmen. The productive future for TV (that is also productive for the internet) will maintain TV’s eco-system and deliver:

– Consumer satisfaction.
– Advertiser health (leading to GDP growth)
– Cost effective distribution
– Content developer financial success

Only then will the evolution keep TV’s interest and power while moving ahead.

Copyright 2012 – Doug Garnett – All Rights Reserved

About Doug Garnett
Growing retail based businesses through television, DRTV, and all forms of video. Doug is a strategist, executive producer, director, author, & teacher.

2 Responses to Challenge the Myths of Internet TV with Reality

  1. Susan Rowe says:

    Doug, I agree with you. There are a lot of people calling for the demise of TV as we know it. My belief is that IPTV may overshadow cable at some point. The reason I believe this is because the MSO’s don’t get along and have not provided us, as marketers, any way of conducting business with new technology with the entire group. When Canoe essentially folded – I saw that as a sign that without cooperation and consistency in terms of technology cable could be in trouble.

    • Doug Garnett says:

      Thanks for the thoughts, Susan. There is clearly change in the air. My sense is that it will be more dramatic than many of us want and far less revolutionary than many cyber hipsters claim.

      Excellent points about cooperation. The MSO’s seem to be quite entangled in their own cables – and slow and clumsy to act (like I felt Canoe was). But looking at history, they’ve shown remarkable resilience – eventually getting it “right”.

      Cheers…

      …Doug

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