There is much discussion about the future of television these days. The current negotiation between Fox and Time Warner Cable is just another sign of the times.
But the future of television has a lot to do with the economics of advertising as well. Jeff Jarvis suggests that Fox’s attempt to get more fees from cable shows they are counting on less revenue from ads. Jeff writes:
Again and again lately, the company is surrendering the advertising battle. In newspapers, it is saying that advertising won’t support its high costs and so it will sacrifice traffic and advertising the hopes of building build pay walls. In MySpace, the company handed over its advertising fate to Google and then couldn’t produce. Now in TV — which is where Murdoch fils says the future of the company lies — they’re trying to eek fees from cable operators.
There are so many problems with the current tv advertising model.
1. First, DVR usage is higher than ever and those users don’t watch ads.
If online users have banner blindness then tv users 30 second skip reflex. Our DVR remotes have a 30 second skip built in, or we’ve hacked them or we’ve figured out how to fast forward past the ads precisely to the start of the show.Thats why tens of millions of people have DVRs in the first place.
2. The other issue is Netflix. It’s a wonderful service and I’m using it more and more these days to watch regular television programming and not just movies. No ads.
3. Advertisers seem to prefer tv for branded campaigns but they don’t get any real feedback on those ads. Imagine if those advertisers bought online media that way.
4. The rate card doesn’t seem to make sense to me. Why am I worth more to an advertiser when I watch one show vs another show. It’s still just me. I’m the same guy with the same intent regardless of what show I’m watching.
5. TV torrent sites are growing faster than ever. They are more comprehensive and easier to use than ever before. TV content owners need to figure out how to get ahead of this.
I know studios believe they are being aggressive to avoid the problems that the music industry is facing. Frankly, I dont’ think it’s enough. Imagine if everytime you went to iTunes or Rhapsody different albums appeared and disappeared at different times. It would be quite odd. That’s how video is playing out.
Here’s an example: Check out the 30Rock page on Hulu today and you will see exactly two episodes available at the moment. That’s it. Then the user gets this message.
Making it this hard only pushes people to Netflix or illegal tv torrent sites. And that isn’t good for anyone (users, content owners, advertisers or cable).
TV needs to evolve with the times along with a new business model.