What happens if TV goes the way of music and newspapers?
theatlantic.com
theatlantic.com
Will the cost of channels rise for some of the reasons he says, sure. But one of three things will happen:
a) total spend/investment (in aggregate of time and surplus attention arbitraged to ads) across ALL channels will rise - this will hit us all in the pockets, but also raise the overall budget for content production... this doesn't lead to his conclusions.
b) total spend and therefore the same amount will be available as is available now for content
c) total spend will go down. This might superficially appear to support his conclusions but it doesn't if you think about it. If ESPN rises but other things fall in price and I lose a few things I virtually never watch, and my overall bill is lower - which it will be on average if the total spend is down - then I don't CARE that ESPN is $20 per month instead of $5.
What will happen is called a market!
We'll have a marketplace for content. There will be a certain amount that people are prepared to spend on content, and how much surplus attention they're prepared to pay for ads which will subsidize content. The allocation of these resources will be made more efficient by a more efficient market dynamic. We'll invest more in things we value, less in things we don't. So the BBC and NFL Network will make money out of me for Dr. Who and the football season. But I'll no longer be squandering monthly bills in shit I never watch.
Plus as content moves to apps on TV the playing field is leveled for independent producers to rise up and the barriers to entry will be much lower than they are today for a show to garner - or KEEP - an audience and revenue stream large enough to sustain it.
Imagine if Firefly had been able to say: Fox has bailed on us, but if we can get a million of you to pay just $20 a year we can keep it on the air and send you a copy of the season on DVD after it's over... or something to that effect.
This article is garbage. It's amazing how much ink old media dedicates - even on their new media sites - to trying to argue against the inevitable changes ahead. Perversely it also highlights why old media doesn't have some natural right to survive and have us all protect it against this onslaught. Their content is often mediocre, like this. (And yes I know the Atlantic has a ton of great content, that's not the point.)
producing the pilot of Game of Thrones cost $10M, before they knew it would be a hit. you can't make those gambles in an efficient market - ever. in the efficient market scenario, we'll end up with a lot more reality TV and mediocre sitcoms/drama.
the reality check is - the current system ain't so bad, and while I want "independent content" as much as you, I think we have a lot more of it in the current system than you outline... Workaholics? Portlandia? etc.
Why is that? Isn't it just like any other kind of investment that regularly gets made in an efficient market?
market testing in TV and movies is exactly what produces mediocre crap.
if you'd like to spend some more time getting up to speed on how the industry works before deciding it sucks, i'm happy to oblige.
This is not true. Look at silicon valley. $10MM is nothing. The issue is that markets are human. Humans are bad at predicting what will be successful art, untill its successful. Technology on the whole, is much easier landscape in which to invest in standalone projects (ie, startups). That is why movies are financed on a portfolio basis, and why you see so many sequels in large ticket entertainment (both games and Films). Its also why you see other projects financed in-house (ie, via hierarchy) as opposed to independently (ie, in a market).
Also, Netflix has trained me to not be able to stand commercials. When I am at a relative's house or catch a glimpse of TV in the background, commercials stand out like a sore thumb and irritate the heck out of me.
It's an absolutely terrible way to watch a dramatic series. I could only stomach that first episode. For all the rest, I just waited till they popped up on amazon and paid the $2 so I could watch them without interruptions.
But alas, outside of HBO, Starz, Cinemax, Showtime and The Movie Channel none come to mind, so let's engage in theoretical discussions.
How many YC startups would accept that compromise?
The legacy of the massive broadcast entertainment ecosystem will take some time yet to unravel, but will do so quite quickly when it happens. Then there will be a void for more agile content creators to step in.
Until that void appears, expect pain and horror.
What does he mean if the universe changes?
I'm also not entirely sure that people would continue subscribing to "ESPN" in this new world. More likely, you'd subscribe to individual sports or sporting events. Similarly, I don't think you'd be subscribing to "CBS", you'd be subscribing The Big Bang Theory, or whatever individual show you're actually interested in.
To be honest, though, I don't think he really means what he says there. They're going to fight tooth and nail to keep the status quo.
Except it IS cheap to distribute content on the Internet. Shows are already being distributed to millions of homes without costing the content owners a dime (It's just currently being done illegally using bit-torrent).
I don't buy that TV is going to be dead. I'd love to watch TV along with my family in our living room. However, I also want flexibility that on-demand offers. I'm sure TBBT is getting lot of money with this experiment.
The question about Netflix is complicated one and I hope author goes into unit economics in his future column. I also agree, at the current rates (for netflix subscription), it will be hard for Netflix to show latest on-demand content. I imagine we will have premium fees for such feature.
The content providers know the direction things are heading and probably know $20-30 a month for one channel from each subscriber is a tough pitch. So what's the ingenious model to offset the loss of big money cable television advertisements?
Crouching Tiger, Hidden Dragon was a low budget film, for example. It's budget was about 9% of the budget of Waterworld.
"So now, ESPN Watcher, the price you have to pay
to watch the same network you love has to cover
all those lost homes and all that lost advertising."
This is the same old romantization of the status quo that always occurs. Is TV really so fantastic today? For every gem that manages to squeek its way through the byzantine television production system there are a thousand bombs. Most television is horrific. Badly written. Badly premised. Badly executed. Badly acted. Bad.
Being cut loose from a ready stream of massive advertising revenue will affect some of the production values of video content, certainly, but will that be such a bad thing? Modern television is a product of committee and bureaucracy. And it shows. Bowdlerization is commonplace. Mediocrity is the norm.
A more democritized, more guerilla, more individual "television" landscape offers the possibility of raising the medium to a true art form.
Movies have been around for over a century, television for half that, but both mediums still have trouble grappling with serious subjects. Consider the fundamental difference in gravitas between an emmy, an oscar, and a pulitzer or nobel prize in literature. Why is that? I would contend that it's because up until now creating a movie or a tv show has been inhibited by being beholden to commercial interests and established publishing powers. Perhaps the brave new world of more individualized video production will result in a revitalization of that medium.
I predict
1) TV will merge into the internet
2) Channels will go away, and there will be individual shows/event broadcasts that the viewers will choose to pay for.
3) There will be bundled packages of the best shows.
4) Most profits will go to the people who produce the shows, unlike now.
You can actually see it in action right now - look at the top Youtube channels (which should really be called "shows"), and multiply by $2 per 1000 video views.