Stream, Stream, Stream: A Look at the Current State of TV

Beatles or Stones? VHS or Betamax? Cable TV or Streaming?

What would you say? It is increasingly likely that you will be a ‘streamer’ not a ‘tv-er’, with good reason. Streaming has come a long way in a short time, ‘buffering’ used to be the bleakest of predicaments, stuttering playback and delayed visuals lagging behind the audio, derailing the entire experience. But that was then, today, with the magic of broadband, streaming is easy, hiccups are rare. Today we’re streaming for days, hours and miles, whether it’s watching the first season of Orange is the New Black in one (heady) weekend or Sherlock Holmes back-to-back-to-back.  

We can stream original content that has never been shown on traditional television (House of Cards) or revisit select past seasons of popular television programs that are now available online via Amazon Instant Video or Netflix (Californication: still filthy, still entertaining, still available). And these are just the legal options, hundreds of more illicit streaming sites exist, covering everything from new film releases to an international array of once-popular TV programs. (Source)

At first glance, it looks like some of the bigger, more traditional networks are moving into the internet too, sharing content with users, but the briefest analysis reveals that this step is half-hearted and more concerned with protecting their existing revenue stream than forging new territory.

Using two of the industry heavyweights,HBO and Fox, as examples, they have both had a lot of buzz recently because of their decisions to stream Girls and the Super Bowl respectively.

Ordinarily, both companies only allow streaming access to their existing paying cable customers, with, as yet, no option for non-cable subscribers to pay for a streaming-only policy. There was even a ‘take my money HBO’ campaign with the public trying to rally HBO to develop a streaming-only subscription service. It failed. At present, the streaming part of their contracts is an add-on, a user bonus to compliment the main product, the cable TV subscription. For example, HBO’s recent foray into streaming the season premiere of Girls on YouTube was devised “to court the show’s active online fan base” Sabrina Calouri, HBO’s vice-president of social media and marketing said, she continued, ‘for us, this is an increasingly challenging demographic to reach with traditional means.’

The season premier is still available on YouTube and will be for one month after the initial broadcast. But that is it. What use if this to a fan? This show about highly-educated, utterly clueless, somewhat dislikable 20-something girls living in Williamsburg is watched by highly-educated, occasionally clueless, really-quite-likeable girls and probably boys too, living everywhere, an increasing number of whom will not be interested in paying ~$100 a month for cable(Source). This is when piracy comes into play. Frank Rose, in his essay on The Future of Media in the Milken Institute’s Report,  posits the subtle theory that piracy is an indicator of market failure. His report draws on the example of the music industry and the dwindling amount of piracy therein as people have found legal access to streaming music via Pandora or Spotify.

Similarly, Fox has also been experimenting, opening up their streaming services to non subscribers for the Super Bowl. It was a clever tactic and the best day of the year to invite new users in, but this foray into streaming was also very closely controlled. As it is not yet possible to buy a streaming-only Fox subscription at the present time, the policy of opening up the streaming seems an odd way to try and attract more cable subscribers. Additionally, it is interesting to note that Fox made the slightly odd decision to distinguish the ads sold for each platform, those streaming the game saw different ads to those watching it on TV. This decision is revealing, it demonstrates that Fox wants to capitalize on Advertising’s Biggest Day of the Year and streaming is just an afterthought. Statistics back this up, because although online display ad spending has increased 32% this year, it is still just 4.5% of the total advertising spend. Fox’s decision to separate traditional TV and digital ads is therefore representative of the industry as a whole.

Economics 101: Scarcity vs Plenty. Scarcity Principle no longer applies?

In terms of their content, both Fox and HBO are operating on the scarcity principle, which had served them so well in the past. In the pre-internet age, rationing user access to their favourite TV programs generated further revenue in the form of DVD sales, cable releases and eventually regular broadcasting channel release. This has been incredibly lucrative in the past, however this thinking is outdated and says more about the era in which the TV companies came of age than the current climate.

Enter Netflix. Netflix, had already revolutionized the DVD rental market and then surprised everyone when they starting creating unique content. Netflix, not only produced high quality, award-winning content but also decided to release the entire season at once. Why? Let everyone’s favourite Prince of Pop Culture, Kevin Spacey, tell you:

Watch this Spacey

“Clearly the success of the Netflix model - releasing the entire season of ‘House of Cards’ at once has proved one thing - the audience wants the control. They want freedom. If they want to binge - as they’ve been doing on ‘House of Cards’ - then we should let them binge.”

Transcript (bolding my own)

Releasing the entire season at once, flooding the audience, did not sate the audience’s appetite for more, on the contrary, the fervour is merely channelled into new forums, look to  the characters’ twitter feeds (Zoe Barnes’ twitter feed is itself a major plot device in season 1 of House of Cards) as an example.

Frank Underwood’s fan-created twitter feed has 24,300 followers, that’s 24,300 people who want to be more involved in the story.

It’s clear that fans of the show have kept momentum going as they wait for new content or wait for new fans to catch up. This is not limited to Netflix productions either, think of the frenzied Sherlock tumblrs, and Lost forums, this is where the audience feeds its desire to get more involved in the story. The emmy-winning Lizzie Bennett diaries took this even further, updating the Pride & Prejudice story for the digital age, with the characters tweeting in real time as the videos were released.

It is clear that television-style programs continue to entertain us, there was even a recent article by Brian Raferty in Wired detailing his desire to keep up with the characters in various TV shows without ever actually watching them. This may be the exception rather than the rule, but the good news is that the medium itself still works, we still care, we just want to watch on a different schedule, our own, rather than the historic one we inherited which was devised to suit the broadcaster’s advertising schedule. Traditional TV companies, whilst currently still lumbered with the highs (ad revenue) and lows (incredibly high running costs) of their business model need to keep an eye on how people are watching their content, whether via their own online presence, YouTube, Hulu or Netflix and strategize accordingly. Channel 4, a British channel, has recently removed the vast majority of show content from YouTube, instead encouraging users to watch via their bespoke streaming service, 4oD so they can better target ads at the users and own more of the data. 4oD is currently free to all users in the UK however it does not work anywhere else. At present these limitations of reach are ascribed to “rights”  - itself indicative of the old models of broadcast distribution, and no-one seems to be in any great hurry to re-write the rules now the distribution is streaming rather than broadcasting.   

Think about it, we watch films on our TV, videos on our phones, we interact with TV ‘characters’ in social media and then share the fan art produced: TV changed whilst we were watching and we as users barely noticed. We simply enjoyed the new convenience. This train of thought poses intriguing questions about the role of 'TV' over the next few years, if you are interested in these thoughts and more, take a look at the work of my colleagues, The Future of TV to find out what we think is going to happen next.

Get blog posts via email