annienyu-blog
Passion & Entertainment
Hi I'm Annie, I'm a junior at NYU studying Media, Culture, and Communications with a minor in Business Entertainment and Media Technology. In this blog I explore my passion of entertainment by taking a critical look at the television industry.
-- The Business of Media Spring 2016 --
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Guest Speaker Response: Economics of Film and TV
Response to: Guest speaker Roger, Talent Manager
Roger's discussion about talent interested me because it was a look at the industry and economic shifts from a different and fresh perspective I had not thought of before.
The first point he brought up was that actors have been recently getting more involved in television than film, in particular drama. This makes sense because in the on-going battle between different TV platforms, everyone is trying to create and produce the best content that will attract consumers and become binge-worthy. Talent wants to align themselves with this new quality content and emerging forms of media. And with all of this competition it makes sense that the networks are "petty" with each other. Roger talked about how if an actor is a series regular on one show on a particular network, they are not allowed to guest star in more than one episode of another.
Another interesting topic Roger brought up was how it is a "great time to be a non-white actor". Every network wants diversity; there is a mandate for a global platform - this is meant to add to the quality of the content. A show like "Friends" with an entire white cast would be unthinkable today. This is interesting not only because "Friends" was arguably one of the best shows of all time, but also because towards the final seasons the 6 main characters were all being paid $1 million an episode. Today it is difficult for actors to make even more than they were paid 20 years ago. Matthew Perry now does an episode of the "The Good Wife"for $8,000 because he likes the show. Most actors just really want to work. With the price of entertainment content getting lower and lower, it only foresees that the talent will start being paid less and less.
I honestly think it is ridiculous for talent to be paid $1 million an episode (even considering how much I love "Friends"). But that's how the industry works - producers need big names to get money for a project.
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Peer Response: SNL Cutting Ads
Response to: http://zmr216.tumblr.com/post/143389863523/slashing-ad-revenue
Television audiences now have access to so many different platforms, and broadcast TV is facing major competition to keep its viewers. The networks are coming to the conclusion that eliminating advertising will make their channels more appealing.
NBC has been the front runner in this shift, first on Leap Day this year with their partnership with American Express, and now announcing that their popular sketch comedy show, “Saturday Night Live”, will be cutting out 30% of advertisements next season. Creator and executive producer has noticed that “as the decades have gone by, commercial time has grown,” and their hope is to make the viewing experience of the show more consumer friendly again. But it seems to me like the network is more concerned with its audience ratings than its advertisers, which is great if it wasn’t for the fact that broadcast television earns all of its revenue from advertising expenditure.
My question is; how are they going to balance this? How will broadcast TV reduce the number of commercial minutes and still remain profitable? According to Advertising Age, there has been a recent effort to weave in “brand messaging that more closely resembles the content viewers tuned in to watch”. NBC says they plan to offer advertisers an opportunity to partner with “SNL” to create content for the show. But nowhere does it says what advertising agencies think of this shift. Now instead of paying to regular 30 second ad slots, advertisers are going to have to compete for content time with the show and then work with the network to produce and implement it in a way that it doesn’t come off too obvious or cheesy. Sounds a little complicated.
If the television industry is changing their business model, the advertising industry in turn will have to as well. The question is wether ad agencies will want to make this change or just start selling to different platforms that are available to consumers now. New digital sites are always looking for sponsorship so that would be an easy market for advertising. However, if eliminating ads does get broadcast TV significantly more viewers, advertising agencies will want to take advantage of that audience. The business of television seems to be changing every minute of every day - who knows what’s next/
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Guest Speaker Response: Fair Use
Response to: Guest speaker Bradley Silver, Assistant General Counsel at Time Warner
Although this issue doesn't directly relate to my study of the television industry, I believe that the notion of fair use is becoming increasingly prevalent as the entertainment industry shifts to digital media. The Oxford Dictionary defines the phrase as: (In US copyright law) "the doctrine that brief excerpts of copyright material may, under certain circumstances, be quoted verbatim for purposes such as criticism, news reporting, teaching, and research, without the need for permission from or payment to the copyright holder verbatim for purposes such as criticism, news reporting, teaching, and research, without the need for permission from or payment to the copyright holder".
Bradley spoke of fair use as not a right, but a defense. He said when dealing with this type of copyright law, one must look for:
The purpose of the use; is it private? commercial? transformative?
The nature of the use; is it fact? fiction?
How much of the original is being used
What is the impact
I intern for a digital media company (Zazoom Media Group), that creates and producers a series of news shows for partners such as Time, MSN, AOL, and Hearst. When pulling assets for these videos, we have to be very aware of what is and what isn't fair use. For this type of media I have learned rules such as:
Social media is fair use, as long as the contributor is cited
Celebrity social media does not need to be cited
7 seconds of YouTube video can be used, with contributor cited
Everyday images on Google are fair use
I feel as though not that many people are aware of these laws, and as technology advances and people continue to share and create digital media content online there may be a lot of copyright issues that are run into. We need a vast amount of more experts in this area. The problem is how we could ever manage to keep track of all of this at the rate and spread this shift of the entertainment industry is growing.
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Peer Response: Netflix vs. HBO
Response to: http://kristynmc.tumblr.com/post/142682378657
The once internet-based subscription video service is now producing more original programming than ever. CBS News just announced that last year Netflix put out 450 hours of original content, beating HBO - cable's premium network leader - that only had 400 hours worth. And the digital streaming site is not about to slow down, Netflix is planning to release 600 hours of original material this coming year (and now HBO is saying the same). Thus the television competition heats up.
How has Netflix become so successful? I agree that the company had great diversity among content, is the best at providing bring-worthy shows, and appeals immensely to millennia. But what makes Netflix's original programming so great and popular when compared to other TV platforms, such as Amazon and Hulu, that are "scrambling to catch up"?
The Netflix library has so much to offer. Their programming not only consists of international imports and extensions of previously existing series, but exclusives as well. The line-up consistently delivers binge-worthy material that gets everybody talking. Netflix is the one to beat.
They are fighting hard to keep all of their loyal subscribers. The company plans to be the first global network for original content. And this programming does not come cheap, Netflix is investing a lot in this goal in order to succeed - "Netflix hasn’t disclosed how much of that spending has gone toward original series and exclusive movies, but the percentage has been steadily increasing".
But even if Netflix has produced the most original programming, this doesn't mean it is the best original programming. Last year HBO won 45 Emmys while Netflix only took home 4. Perhaps they should be more concerned with quality than quantity.
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And the Ratings will be Out...After the Break
To be totally honest, I didn’t even know “American Idol” was still on television never mind having its series finale. I mean I do not own my own TV, but most millennia don’t and this is the audience the program started and grew up with. Of course “American Idol” has been extremely successful in all demographics, not to mention international popularity and spin offs as well. The series finale brought in about 13.4 million viewers, making it the most watched season in 3 years (Variety). Great news for Fox, however the show has definitely seen its ups and downs over the years.
Starting strong, after the first season “American Idol” got so big that the finale of Season 2 in 2003 outperformed the Oscars that year. This success continued as it ranked number 1 in adults 18-49 for seven consecutive years. It was not until season 11 that the show took a tumble, decreasing 30% in ratings (By the Numbers).
There are multiple reasons for this decrease. For one, reality television is not something that can easily be controlled (unlike Fox’s longest running cartoon series, “The Simpsons”). Idol will always be remembered for its original 3 judges - Randy, Paula, and Simon - but this perfect ensemble couldn’t be kept consistent for too long, and there were a lot of mix-ups with the judges. Also the fact that not a lot of the actual winners went on to become that famous - I mean does anyone really remember Taylor Hicks? There was also the introduction of NBC’s “The Voice” in 2011, working with a similar model but with a few twists, that brought a lot of competition and is still doing well today. Not to mention the major shift from network television to digital streaming platforms. We don’t wait around our TV-sets for episode premieres every week anymore, even DVR is dwindling - why bother when everything can be found online?
“American Idol” gave way to many TV models; the talent competition, the audience interaction, the talent then going on tour. It was a very tactful program of its time. Fox just didn’t know when to quit. The network is going to have to work really hard to create a reality show that will become as big as Idol did. I wonder if streaming sites like Netflix will begin to develop talent competition shows that are binge-worthy.
It would be interesting since the best part about “American Idol” was the experience of picking your favorites, voting, and waiting in suspense for the next week’s episode when you knew everyone else in America was watching it with you. Hearing host Ryan Seacrest announce the millions and millions of votes received at the elimination rounds made us feel like we were all apart of something. As technology advances I wonder if television will ever truly be able to give us this sensation again.
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Just When You Thought the Price of Entertainment was Getting Cheaper
It’s happening; Netflix is raising it’s price. Next month, May 2016, the standard subscription price will rise from $7.99 to $9.99. This was bound to happen. Sure all of the streaming sights have been causing hype and television audience fragmentation, but thats doesn’t mean that they have been exactly financially successful in doing so. The reason so many people have Netflix accounts today is because of the content, lack of advertising, and affordability. Many people from traditional television companies have in fact moved to Netflix because of the creative freedom, but this kind of bing-worthy entertainment costs the digital platform to produce and gain rights to, especially when their only source of revenue is from a small monthly fee for subscribers and they don’t get any money from advertising agencies. People were attracted to streaming sites because they were different from traditional television. However as these companies are beginning to learn, it costs to be different.
According to Business Insider, most Netflix subscribers have no idea this price hike is happening. It is not an all-of-a-sudden shift though. Two years ago when the company announced the subscription price raise, they said that existing subscribers would keep the original price for two more years, but now this promise is expiring (USA Today). The issue with entertainment today is that if consumers can find it for cheap, or even for free, they will never pay more unless they don’t have alternative choices. That is what Netflix is for many consumers - a cheaper alternative of television. The question is if subscribers will keep their accounts when the price rises. Also - if Netflix will continue to up its subscription fee every two years or so until the company is profitable. The funny thing is that even with a price hike, “Netflix still has a lead in ‘price per hour of entertainment’ over pay TV. Netflix costs $0.09 per hour of viewing, while a typical pay-TV package costs $0.30 an hour” (Business Insider). I wonder if these costs will ever even out in the future - I wonder if there will even be traditional pay-TV packages in the future.
How many Netflix subscribers are predicted to cancel their accounts?
- USB estimated 3-4%
- JP Morgan survey shows that 15% said they would cancel
In my opinion, Netflix is great - what’s another $2? However its only $2 now, and we have no idea what this will look like in the next 5-10 years. At the end of the day, business is business and the company has to make profit to stay alive. I see even more streaming sites emerging and taking over traditional TV in the next 5-10 years. They will all have to compete for audiences. Netflix will have to figure out what is the right price in order to stay on top.
#netflix price increase#netflix#streaming#tv industry#entertainment#future#price of entertainment#subscribers
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April Showers Bring Less Cable Power
Today my friend was signing the lease to his new apartment and asked the ever so concerning question, “is it worth it to buy cable for my apartment for only like 2 shows?” This means that not only is cable becoming more and more unnecessary with the transition to digital technology, but there are also only a few shows on television that can exclusively be accessed through cable.
A recent article stated that “cable networks lost about 2.5% of their subscribers in new universe estimates released by Nielsen. The estimates, which are Nielsen’s official numbers for April, suggest an acceleration of cable’s erosion, and compare with a year-to-date decline of about 2%”. Nielsen measures 122 cable networks, and only 30 of them have showed any signs of growth recently. Shockingly some of the hardest hit by cord shaving were the bigger players, such as the Disney and Viacom networks that have had some pretty weak figures.
Cord-cutting refers to US householders reducing the sizes of their cable packages rather than completely cutting the cord. And “according to the latest Nielsen estimates, pay TV households are down 1.7% and the overall U.S. TV universe is essentially flat”. This trend is sure to result in lower advertising revenues because the less consumers viewing cable TV, the less advertising agencies will want to sponsor cable networks. If the networks get less money from advertising, they will have no choice but to raise subscription fees to be profitable. But why would anyone pay more for cable if they only have to pay around $10 a month for streaming sites that has most of their favorite content anyway?
My friend asking that question really shows where the future is headed. As millennia begin to get their own places, they will be less likely to buy cable and generation after generation the existence of cable will dwindle. Soon it may just become a memory like that of the VCR.
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Nielsen Breaks it Down
Television ratings agency Nielsen has been doing its best to keep up with all of the drastic changes in the TV industry. A major problem that has arisen is the fact that Nielsen traditionally has relied on cable and over-the-air broadcasts to measure audiences, but now most of these audiences have converted to the ever so popular smart TV.
Starting as soon as April 25th, Nielsen will start to report viewing data by the type of connected device the viewer is using (PC). This should give a better sense of how many households are using streaming technology to watch television, not to mention it will help to express brand popularity as well (Apple TVs, vs. Google TVs, vs. Amazon Fire TV, vs. Roku, etc). PC states that: “the new data will come from Nielsen's national television panel, approximately 40,000 homes across the country, with 100,000 TV sets and 50,000 connected devices like game consoles and smart TVs”.
And all of this data will of course be combined with the data Nielsen already gets through monitoring cable and over-the-air broadcasts already as well. The agency has named this concept TUT for Total Use of Television, and it should prove to be very efficient. This breakthrough of collecting data by Nielsen may even prove the myth of cord-cutting after all. I think they’ll find that most households are using streaming platforms just as much, and maybe even more than, as traditional forms of television. My question for Nielsen is if they would ever consider measuring TV consumption data through college dorms? These are the future household owners of America. 10 years ago I think most college students would buy a TV for there dorm room, and this have evidently changed. This should be the next step of the agency’s path of breaking it all down. We could definitely predict that because of millennia, cord cutting will probably no longer be a myth in the next 10 years - it will be a reality.
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Showtime “Dicing” Out a New Series
Because of the popularity with digital streaming for television shows, everyone in the industry is eager for binge-worthy content. The traditional linear line up just isn’t enough anymore. In the past, audiences were so excited once Thursday night came along and they could watch the latest episode of “Friends”. I even remember all the hype around Tuesday nights when episodes of “Pretty Little Liars” would premiere and everyone would be live-tweeting about it. But times have changed so quickly, and along with digital television platforms has come our loss of patience and our desire to binge. Business models associated with digital streaming services have become the new trend in TV.
Releasing all of the episodes at once before the linear premiere of a new show has become a popular experiment for TV programmers, according to an article in Variety. This type of strategy makes the most sense for premium channels, as HBO has been so successful with it. Showtime has seen this success and is now ready to take the same type of gamble. On April 10th, the channel is going to release 6 episodes of its new comedy series “Dice” via its streaming services and on-demand. The show stars Andrew Dice Clay, and the story follows the comedian and his attempt at a comeback in Las Vegas. President of programming for the Showtime network, Gary Levine, feels that “Dice” is a comedy meant to be consumed all at once and is excited to launch “DICE binge”.
What’s clever is that April 10th is the same day on which the series’ linear premiere will also take place. Any Showtime subscribers that watch the first episode and are intrigued, can then go to on-demand or on the site’s streaming platform and continue to watch the show binge-style. The hope is that subscribers will create hype around the show and create FOMO for non-subscribers that are only allowed to see the first episode. This may translate into more subscribers for Showtime, if the show is a hit.
On the other hand however, this binge strategy has not always paid off in the past. Let’s hope Showtime has a hit on their hands.
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The Dynamic Duo and How they’re Going to Do it
Ben Affleck and Matt Damon have always been living proof to hold on to ideas and dreams no matter what. They pitched an reality competition series and 16 years later it has now finally been picked up (Deadline).
The show, titled The Runner, will feature one “Runner” trying to get across the country in 30 days unnoticed while teams of “Chasers” try to capture the Runner for a prize of $1 million. The Chasers are also given mobile devices that receive clues. Why now and not 16 years ago? Affleck and Damon know that a traditional reality series will not cut it in where the television industry is headed nowadays. They are hoping their show will attract the attention of millennials. In order to do this, The Runner must be delivered and packaged in an untraditional modern way. And this is exactly what they’re doing with it.
First of all, the platform that picked up the series is Verizon’s new video streaming application - go90. Launched last year, this new entertainment platform provides live events, prime-time TV, the “best of the web,” and original series. The inspiration was to build an app that is specifically catered to the mobile-first generation. To really take off, go90 needs to have a show like this that will really cause a lot of hype and draw the attention of their target audience.
The Runner isn’t just any reality TV series (it definitely wouldn’t make it in the television industry of today if it was). The plan is to make it more digitally interactive than any other show has ever been. On go90 viewers will not only be able to simply watch the series, but they will be able to play along in real time with the chance of winning cash rewards. The app will also provide notification updates as the show goes along and this will all be in real time as well.
I think this show will definitely bring in attention as a modern way of thinking. Everybody in TV is trying to come up with these kind of new ideas right now. It will also benefit Verizon because go90 hasn’t been very established or successful yet, but aligning it with two huge names like Affleck and Damon will increase its popularity. It will be exciting to see if The Runner starts a new television culture of audiences interacting on their mobile devices as they watch rather than scrolling through social media with the TV on as background noise. In this new generation everyone feels as though they should always be doing something, always multitasking. Therefore this is a smart way to incorporate fresh trends with fresh content.
Affleck and Damon are not simply creating a new piece of entertainment, they are creating an experience.
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Yahoo Scores a Goal, on its Way to a Touchdown
Yahoo has signed a deal with the National Hockey League and will now deliver live hockey games for free. The plan is for Yahoo Sports to stream the NHL’s “Game of the Day” for up to four days each week. The deal also states that Yahoo will provide condensed NHL games, “Best of the Day” and “Best of the Week” top plays, post-game highlights, and Yahoo Sports will continue to be the league’s official fantasy sports partner.
Yahoo’s VP of media partnerships, Phil Lynch, explained that “this alliance brings us one step closer to providing fans a live professional sporting event every day, on Yahoo...” And they are providing this content completely free, no cable subscription required.
According to Variety, Yahoo was the first digital outlet to stream an NFL game bringing in millions of viewers. Yahoo has a huge sports concentration and is continuing to take more steps in acquiring this type of content - especially live sports. It looks like Yahoo will be in the running for the NFL’s over-the-top streaming rights next season. But this will not be easy - other big digital companies such as Facebook, Amazon, and Verizon are eager to bid for the NFL property as well.
The fact of the matter is that the slow death of traditional television does not include the death of sports television. The Super Bowl continues to get more viewers every year, and the price of advertising for this event always increases. Why? Because people like to watch their sports LIVE. This will never change. What may changed is the platform on which people watch sports. If Yahoo is offering live NHL games for free could it be possible that in the future Yahoo and other Internet companies will offer all live sporting events for free too? This may be where the industry is going - just another reason cable subscriptions will become eventually unnecessary. The question is how these digitals platforms will make money. Right now all television platforms are competing for customers, and getting sports content may give digital even more of an advantage over traditional TV.
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NBC Leaping Through the Commercials
In order to compete with new popular on-demand and streaming platforms of television, traditional broadcast and cable companies have to take risks. On leap day of this year, NBC did just that. An article from The New York Times described it as follows:
“Monday’s season premiere of the NBC reality singing competition “The Voice” will include a bonus interview with last season’s winner. During “Blindspot,” the hit hourlong drama about a mysterious tattooed woman, there will be interviews with the show’s creator and two of its stars. The “Today” show will feature an extended segment with Kathie Lee Gifford and Hoda Kotb, and “Late Night with Seth Meyers” will have an additional comedy sketch.”
In total this will add up to about 11 more minutes of NBC content than usual, cutting into commercial time. But here’s the twist - before and after these additional segments it must be mentioned that this content was “brought to you by American Express”. Could NBC be starting a new model for television advertising?
American Express came to NBC with the idea in December, knowing that the television industry needs to begin experimenting in order to keep their audiences. The article stated that last year commercials on broadcast networks accounted for 17.3% of programming time, up from 16.8% in 2012, and there’s an even larger percentage of commercial time on cable. It is hard to say if this is the reason for lowered ratings, but the industry is definitely aware of the increase in advertised content.
According to BloombergBusiness, many networks are cutting back on commercial time to appeal to younger viewers and facilitate the needs of advertisers. The major issue is how the broadcast and cable networks have to compete with ad-free on-demand and streaming platforms, but their major revenue comes from advertising. The worry is that efforts to win back ratings might not be enough to offset the price.
The American Express deal is definitely an wise move for NBC. I think it’s unique tactic and success will lead to other networks experimenting with ways to change advertising models. It also offers an atmosphere of intrigue for advertising companies to follow American Express and make deals with TV networks. The shift in television is moving quite fast, but is it refreshing to see traditional forms of the industry finding new ways to keep up.
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Disney Getting it’s Head in the Game
Big news for all of us post-millennials out there - "High School Musical 4"has officially been green-lighted by Disney Channel. Deadline announced that a nationwide casting began on March 1st, and the project is supposed to continue the story as well as "introduce new East High Wildcats and their cross-town school rivals, the West High Knights". Jeffery Hornaday has been eager to direct and choreograph the movie for some time now.
An interesting move for Disney, after the finale of the last High School Musical I do not think audiences were exactly expecting another one. I wondered if making a 4th installment has ever been beneficial for a media company. Looking at some of the most well-known movies that came in 4s (not so many), I researched the box offices of "Shrek,"Alien,""Lethal Weapon," and "Scream". Consistently, the gross profits of these films significantly decreased with a fourth installment.
Can Disney "Bet on it"and prove to defy these odds?
The High School Musical franchise may have a small history, but an immense one at that. We must remember that it all started on New Years Eve, January 2006. Disney Channel held a promotional special and introduced its viewers to the 6 unknown teen actors. According to MTVNews, they also introduced the musical scenes from the movie beforehand - running them on the station as advertising for the January 20th release. This resulted in the album hitting #1 on Billboard after only 7 weeks back in 2006 - that had never happened for a kids TV movie soundtrack!
This all set the stage for the release of "High School Music 2" in August 2007. Even I remember the hype for this summer hit - Disney.com did a interactive survey asking kids what kind of things they wanted to see in the movie (guest stars etc.). B&C said that the sequel "drew the most kids of any telecast ever on broadcast or cable, with 6.1 million, and stands as TV's second-most-watched entertainment telecast with tweens 9-14, behind the 2004 Superbowl". It famously drew 17.2 million viewers, making it the most viewed basic-telecast ever. This remained true for almost 7 years, until the return of "The Walking Dead" season 4, in October 2013 hit 20.2 million viewers taking the throne of most-viewed non-sports cable telecast (TheHollywoodReporter).
Why was it so popular? Disney believes it is because High School Musical is the new generations version of "Grease"and there's nothing else like it. The best ideas come from our inspired past entertainment right? After seeing the numbers of "High School Music 2"Disney was wise enough to take the finale to the big screen - or at least we though it was the finale. "High School Musical 3: Senior Year"came out with a worldwide box office of over $200million.
Is it a smart move to make a 4th movie? I think Disney definitely has the odds in their favor, if they hype and advertise it as much as they did with the last three, a new installment will bring in feelings of nostalgia for the post-millennials and excitement for the new and younger generations. I think the major question here is should High School Musical 4 be a made for TV movie, or a feature film. The issue is that the main and known cast are not returning, so audiences may be hesitant to spend money on a movie ticket, in which case it would be safer to bring back to television. But on the other hand, if there is enough build up and PR, Disney might achieve a huge box office for the opening weekend if timed right. Will be interesting to see what happens!
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Google Takes InitiaTiVe
Variety announced that Google has partnered with TV manufacturer Vizio on creating a series of new TV sets. This new line of TVs has been reported to be available as early as this spring. They are not going to include any traditional smart TV applications, but will function like a streaming adapter instead. This means consumers will have the ability to watch online services like Netflix on their TV sets, but with the streaming initiating from mobile devices.
Google has definitely been stepping up the game in this period of transition for the television industry. These new TV sets are planned to function just like Google’s platform Chromecast. When introduced in 2013, Chromecast became very popular, selling out more than 20 million units even before introduced as a second generation. This is likely due to the mobile device control scheme and low price. The media streaming is very simple and convenient as well, as all the consumer has to do is plug in the HDMI and download the Chromecast app to connect. The applications replace remote controls in this way. The plan for the new TVs with Vizio is to use an Android-based tablet as a remote control for the system. The shift in the technology of television has also led to a shift in consumer interaction with TV.
Google sees the value in adding casting to TV sets. The company is in the midst of approaching other TV manufacturers for new developments as well. The partnership with Vizio should be beneficial though, since they have had bigger ambitions for their TVs for some time now. After measuring media consumption habits for years, it has been duly noted that having connected TVs causes consumers to watch more streaming than traditional television.
The rethinking of Google is right within the times which is why the company has been so successful. Shifting along with consumer preferences has led to great success. However it must be difficult knowing how fast the industry, technology, and consumer taste will continue to change. Will they be able to keep up?
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Cord-Cutting or Cord-Shaving?
Back in July 2015, a panel of experts at Fortune’s Brainstorm Tech conference discussed the future of television. They agreed that the threat of cord-cutting has been well overblown.
There is no question that the way television content is consumed has been drastically changing. Common discourse has been bombarded with theories that everyone will be canceling their cable subscriptions and will start to watch their favorite shows on alternative platforms. Looking at recent statistics however, Fortune says that these theories are not all that realistic. It is just another big story for the press.
Is the pace of cord-cutting only happening in our heads? Deadline recently said that still even today, pay TV distributors suggest we have nothing to worry about based on Q4 subscriptions numbers - nothing to worry about yet, that is. But these results also showed that this was the first time the industry declined in four consecutive quarters. Cable, satellite, and telco video providers lost 123,000 subscribers in Q4 combined, for a total of 98.8 million. This decline is due to various issues:
- the millennia's’ inability to start their own subscriptions (they have cable at home already so they tend to just use streaming services themselves)
- there still hasn’t been recent household recovery formation (this could be a good or bad surprise)
- investors now have to guess about how many customers networks actually have
President of Hearst Ventures, George Kliavkoff, suggests a trend of a la carte purchasing of channels replacing the all-encompassing multichannel packages - he refers to it as “cord-shaving”. This is a shift in which we are headed. A prime example is Comcast’s new streaming service - “Stream” - which offers HBO, access to four broadcast networks, and a DVR service all for $15 per month. Services like this are the next steps in the television industry.
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As if Pilot Season Wasn’t Stressful Enough...
Deadline has just announced the abrupt leave of ABC Entertainment Group President Paul Lee - right in the midst of pilot season! Channing Dungey, ABC head of drama, has been named to replace him. She has quickly become the first black executive to run one of the Big Four networks’ entertainment divisions.
There have reportedly been rumors of Lee leaving ever since Ben Sherwood became co-chairman of Disney Media Networks in spring 2014. The two have never seen eye-to-eye, and many of times their different visions for the network have clashed. For example, Sherwood wanted ABC primetime to be more procedural with closed-ended episodes, while Lee favored serialized dramas because he would rather offer other series for consumers for binge watch.
Yet the timing of this departure is surprising considering they are in the process of producing pilots for the next season. The Los Angeles Times reported that this abrupt transition shocked many in Hollywood. Many at ABC did not publicly discuss the issue because they were dismayed by Lee’s leaving. The article stated that, “TV network presidencies are typically high-pressure, turbulent and often short-lived assignments. Lee, 55, lasted 51/2 years in the top job at ABC, and was more successful than most.” And these executive positions are just going to get more and more difficult with the change in the industry.
But promoting from within has been a beneficial solution on ABC’s part. Sherwood said on his choice: “Channing is a gifted leader and a proven magnet for top creative talent, with an impressive record of developing compelling, breakthrough programming that resonates with viewers.” Dungey is thrilled to to be replacing Lee, whom she said had been a great mentor.
Many at ABC believe the network was due for an executive change. This season has been down in overall audience percentage. But unfortunately for broadcast networks, most of the big companies are also down in overall audience - except for NBC that is, they are up a whomping 1%...
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Time to Simplify the TV Experience
As we know, the television world is in a huge transition today. This is making it extremely difficult for companies to decide which directions to take within the industry. Cable, broadcast networks, and streaming are all in a competition for consumers, and consumers are relying on multiple devices and screens to attain their favorite TV content.
FCC Chairman, Tom Wheeler, says they have been dealing with this consumer issue for about 20 years now. The Federal Communications Committee has recently taken a vote and according to an article on NPR, the Commission has begun a process that could lead to allowing TV viewers the ability to own their cable TV set-up boxes. This means that people would be able to watch sports live on ESPN, stream their favorite Netflix shows, and watch ABC’s weekly primetime lineup all from the same box they paid for once. Although this process could take years, and might not even happen at all as Wheeler admits to Deadline, it is already causing a conversation within the television industry.
Pros:
- Owning a set-top box could save customers a lot of money. Research shows that people spend over $200 annually on cable boxes.
- Giving consumers a simpler and more convenient way to watch all of the programs they already spend money on that isn’t packaged by cable.
Cons:
- Independent device makers could try to repackage programming which would cause a threat to minority broadcast business.
- Cable and satellite companies fear it may cause issues involving copyright protection and financial loss on their part.
- Cable and telecom companies will probably file suits.
Why all this now? The Telecommunications Act of 1996 was reinforced in a 2014 bill regulating the FCC to study new technologies and then “promote the competitive availability of navigation devices.” It’s hard to tell if this is a step in the right direction or not. Aren’t Smart TVs already paving the way for this kind of technology? In the future, we probably wont even need set-top boxes at all, media technology is compressing further and further everyday. The FCC must also take into consideration that most of the next generation is watching television on their computer or cell phone screens, not a TV set.
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