TV used to be an appointment medium. It’s Thursday night at 8 and you’re in front of the set watching or else you missed your favorite show. Then VCR’s, DVD’s and DVR’s progressively pecked away at the appointment schedule. Many of us now wait till a show has aired and then watch a saved copy at our leisure.
On-demand TV and mobile subscriptions from channels like HBO and services like Hulu further erode the appointment habit. So now TV is a hybrid business, sliding towards a publishing model in which the product is released and viewers consume as they encounter it. Missed the first season of Game of Thrones? No problem, you can catch up on the entire season and continue following as new episodes air.
But most TV still imagines itself in an appointment model. Easy to see why; the largest simultaneous audience for a show is for that first viewing, and advertisers get the biggest bang for their buck from that first broadcast. Ratings, which determine whether a series continues to get made, also are measured off that first showing.
Under the current model, customers buy packages of channels – 33 channels, 57 channels, 500 channels of movies, sports, news and entertainment. Even though you watch only one
channel show at a time, conceptually all those other channels are still pumping out 24/7 through your cable box or satellite receiver. But why? If I’m paying for 500 channels and consistently watch only five or six, why am I paying for all the others?
It’s because the channel model is an artificial construct for dividing up that content.
Under the channel model, your cable or satellite company contracts with channels for carriage and pays them. While some customizing is allowed, you-the-consumer can’t pick and choose only the channels you want to pay for. Battles to change the rules over this have been waging for years between cable companies, channels, producers and the broadcast networks.
As TV becomes more publishy and less appointment, this will change. YouTube has ambitions to create premium quality shows, published and available on-demand. Though cable and satellite are still the primary carriers of TV, that’s changing as we spend more time on our computers and mobile devices.
Channels as an artificial construct
There’s a conceptual construct that props up the current model. The 500 TV channels are really an illusion. We talk about buying “500-channel” packages, but really what we’re buying is access to a library that gives us access to X-number of shows. It’s not even good access – most TV isn’t on-demand all the time – you have to see it when it airs, remember to record a show if you want it later, or see it within the TV-provider’s limited on-demand window. The current model is built on streams of content that you pay to access.
It’s been easier to get consumers to buy content in channels than it is to get them to buy individual shows. Channels spread the consumer risk. We perceive more more value with more choice. And until recently, channels were the only way you could get the TV you wanted.
Channels also support middle men. The cable company is a middle man, taking a cut from providing access to channels. The channels themselves are another middle man, packaging shows in streams, branding them (“characters wanted”) and taking a cut. The choices available in the library, when defined in “channels” make possible these middlemen.
If we think library rather than channel, the middle men are less valuable. Consumers bypass their cable provider and the channels and choose directly which shows they want to see. Even though channels are more profitable, libraries are more efficient.
In the arts, theatre seasons are “channels”. Concert seasons are “channels”. Like the TV model, subscription packages have traditionally been the best way to lock up audiences and sell product. But now more people are resisting subscriptions, preferring to pick and choose individual shows on their own. The library is a more powerful model. The library is based on more choice, reducing the role of the middleman.
Channels make sense when channels are the only means to access content. But libraries are more dynamic and individual and can be more appealing to consumers when choices expand. Channels are a brand; libraries are content. Whether your brand is worth buying depends on the value you add to the content.
The flip side? Access to 100,000 shows is a bit daunting. Give me a way of organizing overwhelming content in ways I can use and make sense of and I’ll sign on to your channel or brand or artistic vision or whatever you want to call it.