Monday, March 16, 2009

Will On Demand Content Kill Linear TV

Who has time to watch a full episode of TV. As a society we have gotten use to small bites as opposed to large mouthfuls. Wasn't that the very reason USA Today was created as a newspaper, to provide short articles, quickly read, to get our fill of news. And so the internet and video sites, like Hulu, have done the very same thing. They have offered us bite sized highlights rather than sitting through the full TV shows. From SNL to Daily Show, we can watch the highlights. And for those that like the flexibility to watch the whole show, where and when and how you prefer, full shows are accessible with "limited commercial interruptions". How nice!

And from this convenience comes the problem, the profit return is far less than from the traditional TV set. While USA Today may have been charging as much as other newspapers to get their version of the news, online video does not get the same amount of advertising dollars. And while more and more people are accessing the web for their videos, the numbers watching TV are dropping. "While more and more viewers are watching TV programming online, the networks aren't getting anywhere near the amount that they would earn from commercials that run the old-fashioned way. ... As a means of siphoning away traditional TV viewers, the Internet could soon make cable's threat to the Big Four nets seem like a cakewalk. In fact, the competition posed by online distribution is equally menacing to broadcast and ad-supporting cable channels, which could make the Internet the common enemy that finally unifies the smallscreen's rival factions."

And what is TV doing about it. They are actually putting more content online and literally training the consumer to seek content on less profitable platforms. So how does TV compete? Does all TV need to be live to add a bit of danger and anything can happen to the viewing experience? Will hi definition and bigger TV screens save the TV experience. And can new interactivity through the set top box make the big screen experience more preferable?

Will we buy our networks directly off the web or still work with our "broadband" provider to get packages of content. How advertising reaches us must get more creative too. Where once viewership was merely a sampling and estimate, it is moving toward true engagement and actual views, measuring action and purchase. New interactive opportunities could enable purchasing, couponing, sweepstakes, and feedback. Measurable and accurate. Perhaps that will improve the profit margin.

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