Five questions about the future of television

This is the year we gave up on having cable service and a traditional phone line. We have joined the ranks of the internet-only!  There’s not much to say about the phone line; I sort of miss its reliability but it really didn’t offer much else.

TV is more interesting. The idea of watching pre-recorded shows broadcast at set times is obviously doomed. But it’s less clear what the future holds. Here are 5 questions about the future of TV that intrigue me.

1. Will TV shows as we know them survive?

I say yes, broadly speaking. Humans need storytelling.  Kenneth Burke called stories “equipment for living”; Robert McKee expands on this in his book Story:

Story is not only our most prolific art form but rivals all activities – work, play, eating, exercise – for our waking hours.  We tell and take in stories as much as we sleep – and even then we dream … Story isn’t a flight from reality but a vehicle that carries us on our search for reality, our best effort to make sense out of the anarchy of existence.

There is enormous demand for storytelling, and in particular for the filmed variety right now.  Not only that, but movies are too long for everyday modern life; we need something more bite-sized, and TV shows are just that.

Freedom from a broadcast schedule, with its half-hour and one-hour time slots packed with as much advertising as people can take, might open up some leeway in the length of a show. But there are limits – at the upper end, production costs, audience attention span (and why not just make a movie anyway). The interesting place to explore is probably by going shorter. There could also be some freedom from current season lengths, if business models change.

Will lavishly-produced, big-budget shows survive? Or will people come to watch the work of talented amateurs, making stories cheaply? While the internet democratises distribution, and equipment like cameras and software gets cheaper, making stories is hard, and filming stories is a huge amount of work.  Meanwhile, the demand is there for large volumes of high quality content.  I don’t see professional shows going away any time soon.

In fact, the really interesting thing for me is that we could simply see shows get better. More on this below.

Brides-to-be compete in stupid challenges to win plastic surgery procedures from their wish lists!

2. If TV shows survive, how will we pay for them?

One of the big things that drove us away from cable service was the pricing model. The overall cost is way too high and you pay for so much crap that you never watch. In our new world, we have Hulu Plus at $8/month, together with Amazon instant video for movie rentals – they’re usually something like $4 and I love the depth of their catalogue. We’ll probably flip Hulu for Netflix at some point when we need something fresh to watch. And I can see us adding the BBC iPlayer when it comes here next year. We have Amazon prime but I don’t really count that because we got it for the 2-day deliveries – the video archive is a strange extra. I also paid for $20 for a season of NFL game rewind – more on that later.

Anyway, the point is – we may not quite get everything we’d like to watch, but there’s enough, and the price difference is astonishing.

People saving money ... on groceries ... with coupons. Lots of coupons.

Looking into the future as a consumer, I’d like to:

  • Pay less!  And not in a cheapskate way … I mean that I don’t want to pay for stuff that I don’t watch.
  • Have some more flexibility, e.g. between subscribing to stuff versus paying per view
  • Know how much it would cost to buy myself out of all adverts?

Apart from simply saving myself money, I’m very interested in the longer term in how this affects the nature of the content produced. If the future includes a more direct connection between what you watch and what you pay for, that has some big implications. For example, shows no longer need be measured by audience share alone. It should open up the possibility for niche shows that have small but passionate fanbases who are willing to pay for them. Maybe – please – shows like Firefly could thrive in this world? And if creators don’t always need to aim purely for audience share or advertising demographics, maybe TV shows can lose some of the generic, bland, formulaic traits they suffer from too often.

That’s pretty exciting, and should be good for consumers and content creators alike. The only person hurt is the middleman … speaking of which:

3. Will cable companies survive?

Easy: yes! At least for the foreseeable future. Here’s why:

  • A depressing reason: inertia. A large number of people will keep paying their cable bill without thinking too hard about it. Just check out these incredible stats on how much AOL still make from dial-up users, including charging those users extra for things like email – yes, partly rural customers, but still …
  • They have a complete monopoly on the wires to your house. So whether you’re paying for their TV service or want to watch streaming video over the internet, they’re going to make you pay them somehow.  Hopefully projects like Google Fiber can start to break this, but it will take a lot of time.
  • They are going to cling onto content rights. Average users don’t have any emotional ties to old technology; they just need the time of the new tech to come. But they do have emotional ties to their favourite content. Bet on the cable companies to make exclusive deals where possible and withhold their own content from other channels. The really ‘premium’ content (live sports, big movies, big-budget shows) is so expensive to licence that it will be hard for other startups to just pay for rights.  Netflix is just about getting big enough to begin doing this, but only a little.
  • Oh and they are hedging their bets anyway – Comcast owns Hulu …

It’s sad, because for me, dealing with Comcast was just miserable:

  • Tied in on long contracts (we were in for a year; many of their deals hold you for 2 years)
  • Paying a large amount of money per month for a ridiculous number of channels that I had no interest in
  • Paying silly extra charges (when can we all just get over HD and realise that it’s normal?) and equipment rental fees
  • The most horrible user experience imaginable. Take their on-demand movie service for example: a maze of ugly menus. When you watch a trailer, half of the screen is blocked with a “Buy now?” dialogue box, making the trailer almost unwatchable, and making me scared to touch the remote. It’s never clear which of the two buttons on the “Buy X?” dialogue boxes are highlighted … am I saying yes or no? Should I just turn my box off and start again to be sure? Now we use Amazon Instant Video and I wish we’d done it all along … it’s the way it should be.

The real question is, what horrible contortions will they go through, what misery will they inflict on their customers, as their business comes under threat?  I have a feeling things may get worse for customers before they get better.

I'm just trying not to shudder right now.

4. What about live sports?

9 of the top 10 most-watched TV programmes in America in 2010 were NFL games – the other one, at number 9, was the Academy Awards.  Yes, live sports are enormously popular.  I read an interesting theory recently from Gregg Easterbrook, that sports have become especially successful because of their lack of predictability, contrasted with seemingly ever-more-formulaic TV shows. He wonders whether this also explains the success of dancing/singing/skating/whatever shows, which for all their faults, offer that same sense of unpredictability.

I too love watching sports, in fact more than anything else on TV. So how did I just walk away this year? The simple answer is that we had triplets! I don’t have time to watch much any more, and when I do … it’ll be at some random moment of their convenience (i.e. when we finally get them to sleep), which is not necessarily when sports are on. So this year, I paid $20 for NFL game rewind. You can watch any NFL game in full, in HD, ad-free … just not live (that’s why it’s $20 and not $300 for the season).  It’s not the same knowing the result, but it bizarrely suits my life right now.

So live sports are always brought up as TV’s unique advantage, because there isn’t a good internet-only service for watching them.  But I feel like you have to add ‘yet’ to that sentence.

Of course, if the cable companies have any sense, they’ll cling onto these rights for dear life (presumably they’ll then squeeze every penny they can out of their customers).  This will be a hard situation to break for a startup.  The rights are so expensive, get negotiated so infrequently and have various legal restrictions around them too.

Is there any hope for the consumer? Maybe. The most hopeful avenue is the big sports leagues deciding to go direct to consumers.  In fact, the NFL already do, provided you don’t live in the USA. I don’t know how much of a cut they get of a cable sports package, but it wouldn’t be surprising if they could charge a consumer more and still be a very appealing option.

Why bother cleaning when you could just watch it on TV?

In the long run, I’m not convinced I’d want to maintain paying relationships as a consumer with multiple different leagues. Here’s what I’d really love: a single web service where I could view all my live sports, and be billed in one place, with flexible options:

  • Subscription to a specific league or sport. Perfect for the big leagues like the NFL and EPL. Ideally, different options of subscription length.
  • Pay-per-view for big games. Maybe I don’t have the time to watch enough EPL in general, but I’m dying to see the Manchester derby. Maybe I’m one of those only-watch-the-Super-Bowl football fans.
  • I’m not sure whether the less-popular sports would warrant their own subscriptions, or whether some kind of bundling would make sense there.
  • Free highlights (the NFL is worth mentioning again for the quality of free highlights on their website).

There’s an awesome business idea.  At least, it’d be awesome to be a customer!

5. What about the BBC?

Unlike the situation with cable, I actually love the BBC.  I really hope they do well in whatever this new world becomes.  The licence fee is a bit of an odd thing, tied to old technology concepts, but I don’t think that’s an insurmountable problem. It’s a very reasonable amount of money, hard to undercut.

They also produce plenty of content, of course.  And I like the fact that they’ve adapted pretty well already, technologically. iPlayer has been around for a long time now and is by far the best streaming video experience I’ve used. I can’t wait for it to come to the US next year – sign me up already! It’ll be interesting to see if they manage to build a decent number of paid users overseas, or whether it’ll just be a bunch of homesick expats who miss Have I Got News for You?

Looks dodgier than all the other TV shows pictured on this page!

Who to kill

Paul Graham wrote this piece that did the rounds after the SOPA debacle called “Just kill Hollywood”.  I could probably have framed this piece as “Just kill cable”.

While he’s right that there are great businesses to be built finding new ways to entertain people, I don’t see them reducing the importance of TV shows or films to people.  TV watching has continued to rise throughout the recent years of Facebook/Farmville/Angry Birds; being glued to TV shows doesn’t seem to be incompatible with newer forms of entertainment.

Because people love stories.  And sports.  And fat people crying about losing weight, women competing to marry a farmer, beauty pageants for 4-year-olds … WHAT IS WRONG WITH PEOPLE?

But I agree with him fully on the idea that distribution and funding models seem ripe for creative destruction.

I am highly optimistic about the future, for both content creators and consumers.  And whoever ends up in control, please can I have some new Firefly?

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4 Responses to Five questions about the future of television

  1. Virgin Media’s TiVo service is excellent – I recently signed up for 1TB TiVo box and its 30% full already. Only costs £3 extra per month. The user interface is actually quite good, with very a helpful search service, series record (after only three weeks I now have about 90 episodes of Friends, and about 50 of BB Theory & 2.5 Men each), and one press record. You can browse through TV Guide and hit record on what you want to watch later. 1TB box stores 500 hours SD or 100 hours of HD. VM are upgrading my 10Mbit BB to 20Mbit for free in about April, so things are looking up.

    I have a laptop sat beside my TV and connected to the PC port plus the stereo system, but generally I have not watched a lot of TV through it yet. I like the TiVo idea. I think the future of TV will be between personal storage such as with TiVo, versus Content Delivery Networks such as cable TV or Amazon Instant Video etc. Its nice with tivo to keep stuff, and not pay extra per view. Plus with tivo you can easily fast-forward through ads. Scheduled TV is helpful as you can browse the listings and check out stuff you may not otherwise know about.

    Its a bit like with high street book shops, like Waterstones. You go in and see books you might never hear about elsewhere, then on searching Amazon, ‘people also bought…’ widget throws up more books that could be of interest. When everything goes online, where do you start? In that sense even advertising has a purpose.

    I note VM TiVo box is made by Cisco – they are now hedging between the network and the storage side.

    • lukehalliwell says:

      I feel like the Tivo might be a bit of a bridging solution … once you have a fast network connection and the right business model to pay for video, it doesn’t make _that_ much sense to me that you’d need to store it locally.

      You mention connecting the laptop to the TV and also having to go online – and that’s a really good point, watching online services currently sucks. For online watching to become commonplace, there needs to be a standardised box that sits under your TV that you just plug into your router, and it “just works”, connecting you to whoever the main providers are. I guess the newer ‘smart TVs’ might be moving in that direction but I don’t know enough about them yet.

      • Indeed the storage solution has limits, however for me TiVo has been the greatest development in TV technology in my lifetime. Especially for busy people this is a must have service. Clearly also storage can only go up – we are already on 3TB drives, and Moore’s law will keep doubling that every 2 years.

        With PC to TV – although inconvenient for regular viewing, it is very useful for some things – eg viewing photos, using Adobe Bridge for example, playing PC games with wireless keyb/mouse or controller, demoing a web site to get feedback (impress your friends/family!), or watching specific Youtube videos. Also iPlayer is available for 30 days online, whereas only 7 days on TV. Especially when its 2 or more people watching – standing around a PC is not very convenient. 10m DVI to HDMI cables can be had for only £9 on Amazon. One of the problems though is that some people may not understand how to set it up – eg switching graphics driver to clone mode or switching 1280×1024 to 1280×720 for a 720p TV, etc.

        By viewing the breakdown of usage of Netflix its interesting to see many people (it seems almost 50%) are using Wii/PS3/XBox to access the service.

  2. anonymouse says:

    Note that this is slanted towards EU television viewer, but there are FTA channels covering the US. PayTV is available from DirectTV amongst others.

    We do not pay for television channels, and have not since 2006. We live in Europe, and have a satellite dish. It picks up all of the British free to air (unencrypted) channels like BBC1,2,3,4, ITV1,2,3,4 C4, C5 and a reasonable film channels Film4 and CBS Action/Horror etc. There are about 60 channels available. This covers us for the anglophone sphere, whilst the free to air channels available from French Television cover the francophone sphere (France O 2 3 5, arte, TV5Monde FBS and TV5 Monde Europe along with and extra 20 French language channels).
    Its all free, and the advertisements are not that bad (none on the BBC channels). There are an additional 2,000 channels that we do not watch because these are in unintelligible languages or are simply crap channels.

    The whole set-up was a little expensive (receiver 40 euros, 4 LNB satellite dish Wavefrontier 90cm 140euros, and 6 hours of my time installing it). This was a one off payment of about 180 euros. Is this a steep price? My mother-in-law pays 40 euros per month for 35 channels of which 4 she watches, and the rest are unwatchable. Perversely 2 of the channels she watches are free down the TV antenna. Since 2006 she has paid 4,808 Euros whilst we have paid 180 Euros!

    List of free British channels http://www.freesat.co.uk/
    Note that it is possible to receive these channels over most of the EU, including Cyprus or Grand Canaria, but huge dishs are required. Huge being between 3 and 5 metres. Most of the rest of the EU gets away with 120cms, or 50/60 centimeter dishes in Belelux/France.
    Free French Television is available on the satellite Atlantic Bird 3 located at 5W, Astra at 19.2E and Hot Bird at 13E.

    Of course, we don’t have video on demand, and do not want it. We would rather just flick on the television and see what is there. In a sense knowing a certain programme is on at 8p.m on Thursdays makes us arrange our day, instead of it being happenstance.

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