Broadcast TV is a dead business model. I know I’ve said that before, but I still believe it. It died as a viable business the moment it lost its monopoly on American’s TVs and their eyes. It’s just that nobody seems to have noticed right away, and the death throes are taking a while. After the jump.
Before going too far into the weeds I want to say this isn’t my typical post. It’s more about our relationship with the show, and the network that airs it. What do we owe them, what do they owe us in return, and how is that relationship changing? A few things I read recently finally clicked in to place and a discussion I’d been skating along the edges of finally came together. I’ll point you to both of the main ones, though this started with Faith’s news that we aren’t likely to get Chuck episodes any way other than live for a while. I understand the thinking behind it, but what interests me more is the response of consumers and fans. I’ll get to that soon enough. The first post was an interesting scoop at Geek Furious (I believe that is DR’s new blog, expanding beyond just Chuck). It seems that a full third of Chuck’s key demo audience watched on their schedule rather than NBC’s. The other is one I stumbled across about eBooks and the readers, but the discussion about how problematic it is to maintain a proprietary format or means of delivery definitely applies. The site is called Ric’s Rulez, and it is pretty political outside the post in question, so I’ll just remind readers this is a Chuck site and we discuss Chuck, not politics. If you don’t want to be exposed to political discussion you could probably read the article in question, but shouldn’t go beyond that. And it goes without saying that I will offer no endorsement or criticism of the politics involved, so any issue with the site or any post on it does not need to be raised here . Anyway, stick with me for a while and have your say with a few polls at the end.
It is always a mistake to confuse what it is you are selling the public. The music industry has a history of this, first with records, then tapes and again CDs. They got caught up in the idea that they were delivering a plastic disk rather than what was on that disk. The public always knew they were buying a song. The disk was just the means of delivery. By locking themselves into that means of delivery the music industry sought to have a monopoly on the distribution of and hence maintain control of copyrighted material. A perfectly reasonable goal by the way. This can work for a while, but monopolies tend to make the people who hold them lazy and complacent. And arrogant. The public decides the price they’ll pay, but also what they expect for that price. For the price of that disk the consumer who bought it felt perfectly entitled to copy the contents to cassette tape so they could listen in their car, and later on their Walkman and iPod. After all, they bought the song. When the music industry tried to extract a price again and again for what the customer felt they already owned, the song, they wouldn’t accept it. As the cost rose and the quality declined the music industry found itself outmaneuvered by increasingly clever and agile customers and independent musicians. You see, they were selling that $18 disk, which was one thing when the group was The Rolling Stones and the disk contained Exile on Main Street, but quite another when it was Marky Mark and the Funky Bunch. Eighteen bucks for one of the greatest albums of all times is something people will pay for. One catchy tune that’ll be forgotten in a few weeks and a bunch of filler isn’t. So customers either stayed away or found another way. Until a rather clever guy decided he had a better way. Sell the song, not the disk. Steve Jobs likely saved the music industry from itself by showing them that what they were selling wasn’t worth what they thought it was. At first he had to go along to get along. Make his distribution method look like just the next means of delivery, and make the format proprietary so the access and distribution could be controlled, but little by little, as others jumped in the game, the new reality took hold. That song was worth 99 cents, and that’s what consumers would pay for it. Try to charge $18, they’ll refuse to buy or find a way to steal. At 99 cents, it isn’t worth the effort to steal it. That is why music is now sold digitally online with no copy protection whatsoever. And why I’ve spent nearly $1,000 over the years, most of which never would have been spent on plastic disks with a lot of filler.
Steve Jobs was a great capitalist in addition to being a great innovator. He provided a new market for consumers, and a new revenue stream for musicians, and as a clever middleman made sure he got his cut through the players and the store. Find a way to give the consumer something they want at a price they are willing to pay and you make billions. Telling them my way or the highway is a guaranteed way to destroy a fortune. Unless you can enforce that monopoly.
A similar trend is now taking place in TV and movies. New technology has again changed the relationship between the producers and the consumers, and hence the price each is willing to pay to the other. Put simply, network TV is now overpriced to the viewer. Appointment TV extracts too much time on an inflexible schedule when the viewer has other options. These days, especially in the main product the networks sell the advertisers, the eyes and attention of the 18-49 demo, they have options. And so do the advertisers. Network TV, as a business model essentially places the network in the role of a middle man or a time broker. To an advertiser the potential customer’s attention is vitally important, so they’re willing to pay a premium for that attention. For the network to capture that attention they need to give the potential customer something fairly valuable, free entertainment. They give us, in the case of Chuck, 43 minutes of great entertainment. What they ask in return is another 17 minutes, or significant fraction thereof of our attention.
There was a day when the big three networks could count on most TV’s being tuned to one of them just about every night. What was the competition after all? PBS and a few local independents that couldn’t compete with their original programming. In those days people made appointment TV a habit. Some still do, but it’s a dying habit. It started dying in the 1980’s with the arrival of the VCR and the vast expansion of programming on premium cable stations. Still VCRs and tapes were initially expensive, as were premium channels, so the big three and their affiliates, holders of those all important broadcast frequencies ruled the airwaves for years to come. But there was competition on the horizon.
The VCR, and now the DVR, gave the viewer the ability to watch at their leisure, and to skip the part where they pay for the entertainment. Premium cable and more channels gave the viewer more options, thus increasing the availability and the number of choices for their entertainment, and lowering the individual value of each one, but they extracted their price from the consumer directly, no commercials to watch. You can choose to pay for HBO and Showtime, DVR your shows, or rent or stream from Amazon or Netflix. You can choose to pay Netflix $9.95 a month or Amazon $80/year and have tens of thousands of hours of entertainment available. That doesn’t even consider the vast expansion of cable or satellite channels available to your average cable subscriber. This lowers the value of network advertising to the advertiser. They now have incentive to go elsewhere to find a less diluted pool of potential customers. The most valuable advertising time left on TV is sporting events, where the viewer still has a strong incentive to watch live. It appears that network TV either has to find that new price the viewers are willing to pay in time and investment, or find a way to justify what they do deliver to the advertisers as worthwhile. This is the reason the Save Chuck campaigns worked. The viewers went to the advertisers and said yes, it is worth what you pay, we are supporting you because you support Chuck. Now the networks just have to figure out how to do that, or their future is reality TV, which started out as essentially a pre-taped sporting competition with Survivor, and has managed to diversify in to a low-priced source for drama with shows such as The Bachelor.
So broadcast TV isn’t so much dead as it is a zombie. It’s time has come and gone, but it continues to shuffle along unaware of its decay and eventual inevitable demise. There will be something called a broadcast network as long as those valuable spectrum monopolies exist, though their intrinsic value has and will continue to decline. But what Network TV will look like is anyone’s guess. I’m more interested in the future of entertainment, and more specifically the niche shows like Chuck.
To me, all the vitality and creativity in visual entertainment is happening on TV right now. You have a ton of shows (many of them on NBC oddly) that are pushing the boundaries of storytelling and traditional structure in both drama and comedy. It’s no surprise that I think Chuck is a leader among them. For movies and mini-series, you can’t beat HBO lately. To me, the movies have kind of died as a creative force in entertainment. They are innovating technically, but seem stagnant creatively. You need look no further than the number of remakes to see the decline. All they can seem to think of is re-telling a story with flashier camera work and bigger stunts. Visual appeal is great, but it only takes you so far.
So back to what got me thinking about this. I’ll probably drop out of Chuck for a while this season. Since NBC has decided to burn off the remaining Chuck episodes over the holidays, I’m practically guaranteed to miss at least one, showing on the 23rd of December, and until I get the chance to watch it, on my DVR when I get back from my Christmas vacation, I won’t be watching another episode of Chuck. I’m weird that way with the serialized stories. I want to see them in order. If Chuck were available on iTunes or Amazon, I guarantee I’d be subscribed for the season and would use them to keep up-to-date so I could watch live with the rest of the fandom on the 30th (or at least in closer proximity to the live air dates for 5.07 and 5.08) but that option has been withheld, and so at least one less viewer will be watching live. Seems counter-productive to me, but then maybe it’s just me. I don’t think so, we all have a lot more options now, from the DVR to simply waiting for the iTunes or DVD release. And while in no way should this be seen as an excusing or endorsement, then there’s piracy.
A while back we saw that Chuck was the most pirated show on TV. I think we know why. Chuck has a pretty large international fanbase, and they don’t like waiting for Chuck to show up in their iTunes store or on one of their TV networks. In other words, the cost is too high, so they find another way. I think this also bleeds over into the availability of Chuck via iTunes or Amazon in the US. For some reason Chuck is just about the only WB or NBC show that I can find that isn’t readily available via iTunes or Amazon. And it is (or was) likely the most pirated TV show in part because of that.
I don’t know why Chuck seems to be such a unique case. Perhaps it’s the value to the advertisers, they want people watching live or on DVR so their product placement and commercials have maximum impact as opposed to the commercial free iTunes and Amazon, or different commercials on Hulu or OnDemand, requiring the advertisers to pay for multiple venues. I do however know this, it has limited effectiveness. There are too many tech-savvy viewers out there who are more than glad to bend the rules to help their fellow Chuck fans keep up with the show so they can participate in the online community. That spreads out from there, via the friend of a friend network to the more casual fans, until you have the most pirated TV show as a consequence of trying to restrict access and extract that price from the viewers. The viewers are telling you something. The price is too high, the wait is too long, the means of delivery too restrictive. You can fight it, or embrace it, but the fans and the consumers will have final say.
So what does this have to do with network TV? I don’t know. But entertainment and the means of delivery is changing, and the broadcast networks can’t count on their unique status as license holders to the spectrum to keep them going. There are too many people with satellite or cable to count on that, and even then there are too many DVRs to count on live views. There are too many ways around that price they want to extract in exchange for free entertainment, and too much other free entertainment. So they have to find another way to draw the viewers in. Much as I criticize NBC, they’ve actually been pretty good at identifying shows with something different to offer, like Chuck or Community or Heroes, or really well done shows like Southland or Friday Night Lights. The only problem is that nobody seems to know they exist. The third place network can’t seem to get the word out and get eyes on these promising new shows. I don’t think limiting their availability helps either. CBS may be able to get away with that, not NBC. Do I have an answer? No, this is just a little rant that may lead to some interesting discussion. Someone smarter than me will figure this out. Online viewing is likely to have a major role as the line between cable TV and internet continues to blur, and the set-top boxes, Amazon, Hulu+, iTunes, Netflix and all the rest will start to see themselves the way HBO eventually did, as a network with a different revenue model. They will eventually look for exclusive or original content to draw in subscribers, and perhaps this is where the niche shows can fins a home. Advertisers aren’t willing to pay a premium for 3-5 million viewers, no matter how intelligent and charming we are, but if 3-5 million viewers, or even a decent fraction of them, are willing to pay for their entertainment, who knows what’s possible.
So was there a point to this post? Not really. Just venting about how it seems TPTB are taking one last opportunity to stick it to Chuck fans again, and how I think it’s a counterproductive, and ultimately doomed effort. For Chuck, it doesn’t really matter. We’re coming to the end of the journey, and I may have a few (heh) words about that later. For now, have your say in the comments and the polls.
First choose the one that best describes how you watch, for instance if you have “other sources” it really isn’t necessary for you to be in a foreign country, I’m just assuming that will be the largest contingent of those viewing by not necessarily sanctioned means. If you usually watch via DVR as opposed to occasionally live, choose DVR as your prefered method.
Next up, just for fun let’s see how people might react to missing an episode. Me, I want to watch in order and will wait till I can catch up before moving on. How about you?