The Future of Broadcast Television

The television industry has been fighting against progress for the last several years, but finally appears to be coming around and accepting that change is inevitable. First it was Tivo and the industry worrying about customers skipping commercials. At first the networks fought against it, but now, willingly or not they are shepherding a return to more integrated advertising. Sadly, it hasn’t resulted in a reduction in the number of commercial breaks, except for the people using Tivo or any other Digital Video Recorder (DVR).

Now the networks are struggling to adapt to the Internet. At first they seemed to ignore that it existed, then they built websites, and now almost all shows try to extend the viewing experience into the online world and try to build a community around the show. ABC is the most forward thinking of the networks, becoming the first to sell television episodes immediately after they air via Apple’s iTunes music store for $1.99. Some of the other networks followed suit, and ABC has gone so far as to offer their programming on their website for free. ABC offers their programming on their web site for free because it contains advertising.

At first you might say, why would I watch television on a computer? Well, the consumer has the ability to watch it full screen over broadband and it actually provides a win-win situation for both the consumer (only two minutes of advertising instead of 20) and the advertiser. The consumer is only exposed to one advertiser and the consumer must interact with the advertisement in order to continue watching the program (even if this only means clicking a continue button). This begs the obvious question, once a network incurs the huge cost of creating a program why aren’t they seeking to distribute it anywhere and everywhere they can?

Hulu.com is a joint venture between NBC and News Corp seems to get that point, while also seeing the site as a way to combat people posting clips of their shows to YouTube illegally. This builds upon what ABC.com is doing by allowing people to embed the content on their sites and it should decrease YouTube posts because people can come to Hulu.com and see the content for FREE at a much better quality than a YouTube bootleg copy. Bootleg versions are really only useful to people when there is a cost involved (two minutes of ads people can deal with).

OK, so people will be able to get content for free online, which is the right way to go, but nobody is allowing people to download the episodes for free. All of the networks should be allowing people to download episodes for free like a video podcast with advertisements inserted and allow people to distribute them as freely as they wish. The networks could model the likely distribution and charge advertisers based on the expected viral distribution not just the number of downloads. Why aren’t they doing this? Limiting downloads to those who are willing to pay $1.99 is a waste of time from a measurement and revenue perspective when compared to the potential advertising revenue available.

People can only consume so much entertainment and so networks should be pursuing a wide and free distribution strategy to lock up their viewers, and to encourage people to help promote their programs by further sharing and distributing them (with the commercials of course).

What do you think?