Televisions Busted Business Model
Posted on May 27, 2008 - Filed Under Business |
Last week the TiVo recorded a show called Burn Notice as one of its suggested recordings. I was bored so I watched the episode, and I ended up loving it. So I went to the computer and started watching a few episodes on surfthechannel.com, then I got tired of watching poor quality, Asian-character subtitled versions of the show so I went on iTunes and downloaded the season for $20 bucks. I have been consuming it at a rapid rate ever since.
The whole point of this story is that I had never heard of the show previous to having it randomly recorded on my TiVo and within an hour or two I had purchased the whole first season without ever having watched it live on television or viewing any of the advertising that justified its existence.
TV’s Busted Business Model
Laptop computers, wifi, p2p file sharing and bit torrent technology, user generated video sites, DVR’s, and a myriad of other technologies have busted wide open the old school television conglomerates’ business model.
Gone are the days when network executives decided what you would watch and when you would watch it. I am not alone when I say that I have not watched a television show at its regularly scheduled hour in years. I almost always TiVo my favorite shows, and if for some reason the TiVo misses an episode I will catch it online.
The big draw for me is not avoiding commercials, it is the freedom to watch what I want to watch when I want to watch it. I enjoy watching a few television shows, but I definitely do not enjoy any show to schedule my life around their programming schedule.
The problem with this is that television networks start to lose a lot of money when viewers like me come into the picture. Their business model, as antiquated as it may be, is that they deliver free programming, and in return we watch advertisements from their sponsors. Until now that has been a great model. But technology and consumer behavior are changing, making this model quite obsolete.
The same types of problems are true for the music, radio, and film. Executives and industry advocates are now spending their time trying to fight against “freeloaders” like myself by litigating and otherwise moaning and bitching about the declining value of their advertising slots.
How to make TV work again
I understand the importance of copyrights…I get it. But what it comes down to is that Internet pirates, TiVo, iTunes and others just understand marketing a lot better than the networks. Marketing is all about putting the right product at the right place at the right price.
Television networks have not had to worry about the “place” as much because they have had had a single distribution method with no other viable alternatives. But technology has increased the distribution channels for media and instead of adapting and providing content across all different types of distribution, they have whined, bitched, and litigated while competitors did.
The simple solution is that networks should just stream ad-supported feeds of all of their shows sell higher quality, ad-free downloads via iTunes or their own store. Then they wouldn’t have to worry about people pirating their content. Simply put, if networks would worry more about giving people what they want than they do about making sure that people do exactly as they say, then people wouldn’t have to pirate and they could control the revenue that came from it.
I know that most networks already put a limited selection of their shows online, but they limit the number of shows they put up and rarely post entire seasons, instead opting to post only the most recent episodes. What I am suggesting is that networks follow the example of Southparkstudios.com where you can find every episode of South Park ever made.
Some networks and production companies are making steps in the right direction, but until all networks stop being greedy and ready to litigate at the drop of a hat, they will not win back their “freeloading” customers with alternative consumption patterns.
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