THE ABILITY TO WATCH A SHOW ANYTIME, ANYWHERE WILL MEAN NEW WINNERS AND NEW LOSERS.
By Rick Bentley
The Fresno Bee
Sunday, April 2, 2006
It’s 10:03 p.m. Sunday. You suddenly realize that besides the fact you were not home to watch the weekly antics of the women of ABC’s "Desperate Housewives," you forgot to set the VCR, digital recorder or TiVo.
At one time, this viewing boo-boo meant trying to find someone who videotaped the television show or having to wait for the rerun. Those days have gone the way of vinyl albums, eight-track tape players and suitcase-size home computers.
Three new systems for the delivery of television programming to the public have arrived: devices connected to the Internet, nonconnected mobile devices such as the iPod or other MP3 players and the cell phone.
The Consumer Electronics Association reports $135 billion will be spent on consumer electronic products in the next year. A huge chunk of that money will be spent on electronic equipment to watch television.
That’s why the networks and cable channels are offering episodes of television shows, short program highlights and even sporting events through these new platforms. The reason is simple. Each platform offers potential growth in viewing numbers for their offerings.
No longer does a TV watcher have to stay at home or remember to set a recording device.
With great new technology comes great responsibilities. How will television stations deal with the loss of viewers for commercials on their stations? Who will benefit financially from the new delivery services? Which new technology is the best? Is traditional TV viewing at home going away?
The simple answers are don’t know, don’t know, don’t know and no chance in Helsinki.
There are a lot of unanswered questions at this point. But executives, journalists, producers and those who monitor television agree that the consumer is the big winner.
Jon Winsell, director of Online Media Strategy at ID Society, an interactive marketing agency, says consumers are in a great position.
"There are so many new technologies that allow the consumer to watch what they want and when they want to watch it. What all of these technologies are doing is making TV watching more convenient in between the times you are at home. It all helps you be more mobile," Winsell says.
CBS president Nina Tassler told television critics in January: "The truth is, we don’t know where we’re headed. We know that we are going for the ride.
"I think, philosophically, we know that we need to get our programming to the audience: where they are, when they want to watch it. For us, it’s all about content, and our hit shows and the quality of our hit shows means that all the opportunities for these other platforms are even greater. We’re very curious as to where this is going to lead."
Fox entertainment president Peter Liguori says that it is too early to talk about which new form of delivering programming will be used.
"We’re taking a more measured approach to what works and what may not work and I think, in the world of new technology, that is the quintessential marathon, not a sprint, and we’re looking at it accordingly," Liguori says.
What’s traditional TV’s future?
What the television executives are looking at is an assortment of ways for television watchers to see programs without having to sit in front of their television sets in their homes.
ABC already is offering episodes of "Lost" that can be purchased for podcasts. The same goes for NBC and "The Office."
One of the big concerns is that the more such shows are viewed on computers, telephones or iPods, the less likely the program will be watched on local affiliates.
The networks make deals with local television stations to broadcast their programming. The stations sell advertising time on those shows to make money. If fewer people are watching the programs the traditional way, there will be fewer people seeing the local and national commercials.
Mark Glaser, a longtime journalist, suggests there is plenty of advertising-generating programming for everyone. He says that the demand for entertainment has grown to the point there is no way it can be adequately delivered by the networks and cable channels.
"There’s a finite amount of space that you could have in those instruction models, but the Internet and new distribution avenues are basically opening it up so you can add an infinite amount of inventory," Glaser says.
That means instead of being limited to the 24 hours of daily programming available on each network, every old and new television show could be made available to the public.
Most network executives agree that the majority of television viewing, at least for now, will still be done through traditional television sets. All of the new technologies just offer some bonus opportunities.
Tassler explains CBS is looking at all of the new alternative ways of watching television as a means to draw attention to the original broadcast format.
When an episode of "Two and a Half Men" aired following a Yahoo! broadcast of the CBS show, the comedy experienced an increase in viewing by the 18-to-49 age group. Network executives credit the Internet exposure with the ratings jump.
Early efforts to offer programs such as "Desperate Housewives" and "Lost" through Apple iTunes have shown that television watchers are more inclined to watch a show after they have seen it on one of the new delivery systems.
"It has not taken away viewers at all from our shows, but actually drove up and increased our viewership," says Albert Cheng, vice president of digital media for Disney-ABC.
The Sci-Fi Channel will use iPods to give viewers more opportunities to watch new episodes of "Ghost Hunters." New episodes started airing Wednesday on the cable channel. The shows were available on iTunes for $1.99 the day after their first-run broadcast.
The new technologies are not just limited to series. CBS offered college basketball fans condensed versions of all the 2006 NCAA Men’s Division I Basketball championship games for $1.99 per game as a webcast.
Which new format is the best?
The simple answer right now is that no one knows.
Network executives are looking at several criteria when trying to decide which new format will be best: The technology must be sound; it must be enjoyable for the consumer to use; there must be a way to protect the programming from being pirated; there must be aspects that complement what the network is doing; and making money is important.
"It’s about looking at consumer needs, looking at the consumer experience, going everywhere they are," says Stephen McPherson, ABC entertainment president.
David Katz, head of sports and entertainment for Yahoo! Media Group, points out there has been a clear shift of usage to the Internet in recent years.
"If you’re trying to market your programs, you absolutely need to be on these other devices and platforms in order to get your message in front of folks," Katz says. "I do believe, however, the Internet is going to be a great promotional platform for all of these shows and ultimately help enhance loyalty and drive people back to the shows.
"Now everybody is getting high-speed Internet access. And through IP [Internet Protocol] delivery, you’re going to see a couple of different things. The premise behind an IPTV is that you can really combine that kind of rich video programming with the interactivity and really make kind of an interactive, more immersive experience."
The Internet v
iewing will require advertisers to find new ways to sell their products. Right now, viewers can speed through commercials in any recorded program.
One way that the Internet can take advantage is to have the entire telecast sponsored by a single advertiser. There also can be interactive points on the screen that would allow a consumer to watch a TV show and order a pizza.
There’s no doubt that the Internet is huge. But just think about how many cell phones are being used.
National research shows that 52% of those 25 to 34 years of age have their cell phone with them always or almost always. That means that more than 90% of the time they have their cell phone with them while they are watching television.
Using cell phones as another source of television, even if it is just short segments of shows, is a way to add to the number of viewers being exposed to a network comedy, a college basketball game or a news update.
Tassler says the big question right now is not which new format will be the best. It is a matter of moving forward to make sure that the networks are using some alternative viewing method.
"It is imperative that we make our content available to audiences where they are and when they want to watch it. Their habits are changing, and we have to be there when they want to see our hit shows," the CBS president says.
Fox president Peter Ligouri says the worst strategy is to push all of the new viewing formats and then see what happens.
His approach is to work on producing the best content possible. Then when the leading new format emerges, the network will have the kind of programming that viewers will want to see on that format.
Who benefits the most?
These new ways of delivering programs are a source of new revenue for the networks. Consumers will have to pay to watch the shows. Debates are being held in the broadcasting world as to how the new income source will be shared.
Network affiliates are making the case that they should be compensated for revenue they lose from people not seeing their commercials.
Then there is the talent that produces the programming. The talent already gets a portion of the profits from the sale of shows into syndication. New contracts had to be negotiated in recent years with actors, writers, directors, etc. when DVDs became so popular so they would be paid something as their work was distributed.
NBC executives already have started talking with various entertainment guilds in regard to this matter.
"The thing that makes it particularly complicated is that these are uncharted waters, and we are figuring it out ourselves," NBC entertainment president Kevin Reilly says. "We are in the talent business, and the talent needs to get compensated for their work. They create this product. We do not."
"So it will certainly be a priority for us to engage and come to a fair decision with the guilds. But those are very complicated discussions because we’re truly all figuring it out as we go."
Brad Adgate, senior vice president and director of research for Horizon Media, points out, from an advertising perspective, that the Internet allows local merchants to advertise locally while at the same time reaching a much larger, even global, audience.
That could make the new delivery formats more cost efficient than a commercial aired on a local television station.
But the argument is made that a commercial for a local laundry on the Internet does little to promote business outside the city.
Final word
Unlike the battle between cable and television networks, the current boom in viewing alternatives is not an "us-or-them" mentality.
Cyriac Roeding, vice president of wireless for CBS digital media, describes the future of TV watching with all the new outlets as a move to combine as many technologies as possible.
"It is about creating something that makes sense together rather than these individual platforms that might be hyped one day and are gone the other," Roeding says. "It’s about creating something, new forms of content, and that’s what it all comes down to."
At ABC, Cheng says, the focus of television viewing is certainly on the future. It doesn’t matter whether programming gets 5 billion downloads or none; the key is to provide the consumer as many ways as possible to see programming in a cost-efficient way.
Dawn Ostroff, president of UPN, says: "I think that we all realize that technology is great for all of us. It gives us not only more exposure for our shows, more opportunity for viewers to be able to keep up with their favorite shows, but also possible other revenue streams.
"I think that in the end, when we look at television and we look at television shows, there’s nothing like sitting back in a living room, watching TV on a big-screen TV, or sitting there with your family or with your friends, and it’s almost like a community experience in an odd way."
Kevin Reilly, NBC entertainment president, compares the arrival of new ways to watch TV programming to a speeding train.
"You either get on the train, or you get rolled over by it," Reilly says.