How will the television content get to us tomorrow?

In the previous post I outlined my reasons for thinking that the current television content distribution model is rapidly becoming obsolete.

Networks and studios should adapt to meet the changing market needs.

Here are two examples of how this could work :

1. Studio’s sell direct to the public via the internet. This model may not stop the piracy which is plaguing the industry because the gap between free and cheap is still a big one. The networks are bypassed entirely because they currently add little to no value to the user. The studio’s benefit because they know exactly what the viewer wants and waste very little money producing shows that no-one watches.

2. The other model which may have sustainability is for the networks to add value by becoming content aggregators. They continue to buy from studios and sell to viewers either on a “pay-per-view” arrangement or on an advertising subsidised basis, but more likely in a combination of the two.

The networks get to know their viewers through proper investment in customer relationship management. They use this information to supply advertisers the opportunity to air targeted marketing content to the viewer.

Content is still accessed via the internet, meaning you can watch what you want when want to and the interruption of advertising is limited to products you actually may have an interest in.

Advertisers only pay networks for the advertising sold, minimizing the shotgun approach they currently adopt.

If these ideas sound far-fetched, think again. iTunes is already selling music under this model, you can already pull down movies using your Foxtel remote and there is a new music site call Guvera which is looking to test a similar approach with music sales.

The studios don't want to do this, they may even fight it - but sooner or later something is going to give.

The way television content is distributed won’t last much longer

That’s a pretty bold prediction, but stick with me on this – you may just agree with me. Let’s look at the old TV content value chain :

Studios produce TV shows. TV networks buy this content from studios. Networks air their content and generate revenue through a mix of subscriptions and advertising. The viewer watches the show when it is aired by the network.

This makes a great deal of sense in a situation where the only way to distribute media to a viewer is via broadcast (other than hard copies of course). It also makes sense in a situation where the viewer is disconnected from other viewers and could not collectively purchase the media content. Enter the network acting as the intermediary.

But now with high speed internet facilitating direct distribution and a hyper-connected viewing public as well as viewers who are increasingly protective about the precious resource of spare time – viewer wants and needs are changing :

1. They don’t want to pay for things they don’t want to watch
2. They want to watch what they want to watch when they want to watch it
3. They don’t want to wait for their local network to buy the content and then air it, they want it as soon as it is available
4. If they are getting content for free, they don’t want to be interrupted by marketing for things they don’t want
5. They don’t want to have to leave the house and go search through DVD’s at a store and select one to watch.

The current model does not meet the new demands of the TV viewer. Something is going to have to change soon…

In my next post, I have some ideas where this may be heading.