Our transition to the digital age has brought consumers and content creators immeasurable benefits--that certainly isn't a question. But as the way we consume media changes, some of the old business models for how content is distributed and paid for are running up against some problems.
Take traditional television, for example, which relies in large part on ad revenue. As television has shifted to digital format, there's been an explosion of channels and content, which is good for consumers. But even though there are more viewers than ever, there are fewer eyes on any one program at any given time. That's a difficult spot for an ad-supported industry to be in.
Over at Media Post's Online Spin blog, Dave Morgan hits this problem squarely on the head:
And now cable providers are feeling the pinch from that online competition. It's little wonder that we're seeing more and more traditional video providers--cable companies, satellite providers, and telecom companies--offering streaming online access to content from subscription channels for no additional charge to the regular subscription fee: "TV Everywhere," as Time Warner CEO Jeff Bewkes said earlier this week.
Will it work?
It could certainly create new potential ad revenue streams for networks and distributors, as the new wide world of digital content is available to a wider world of locations and devices than regular TV can reach.
But as with any new business model, it may be too soon to tell. But we're certainly very excited to see the industry looking at these challenges and addressing them. We're always happy when consumers are able to find the safe, legal content they want, when and where they want it. It's heartening to see that the entertainment industry is trying new things in order to provide it.
Take traditional television, for example, which relies in large part on ad revenue. As television has shifted to digital format, there's been an explosion of channels and content, which is good for consumers. But even though there are more viewers than ever, there are fewer eyes on any one program at any given time. That's a difficult spot for an ad-supported industry to be in.
Over at Media Post's Online Spin blog, Dave Morgan hits this problem squarely on the head:
But the problem is actually a bit bigger than just fragmentation of the audience--not just a problem of what people are watching. It's also a fragmentation of where people are watching their programming, with more and more people growing comfortable with seeking out traditional television programming online, whether it's on a PC or through a third-party device like AppleTV or Xbox Live.
Thus, the television industry has shifted from a world of scarce distribution to scarce attention, and most expect much of the economic value to follow. Value in the future will be less about securing distribution of programming and more about attracting and retaining audiences for programming, probably on a case-by-case basis.
Why are audiences fragmenting so much? Certainly, part of the problem is that with many more choices--actually, an explosion of programming choices--it is quite natural for viewers to spread themselves out among the many different types of channels and programs now available. Folks are no longer tied to only three broadcast networks for their television programming.
But that's not the only problem. I believe that viewer confusion and ignorance may be a very big driver of fragmentation as well. With so many choices on so many channels at so many different days and times of the day, it is practically impossible for viewers to know what's available to them at any one time.
And now cable providers are feeling the pinch from that online competition. It's little wonder that we're seeing more and more traditional video providers--cable companies, satellite providers, and telecom companies--offering streaming online access to content from subscription channels for no additional charge to the regular subscription fee: "TV Everywhere," as Time Warner CEO Jeff Bewkes said earlier this week.
Will it work?
It could certainly create new potential ad revenue streams for networks and distributors, as the new wide world of digital content is available to a wider world of locations and devices than regular TV can reach.
But as with any new business model, it may be too soon to tell. But we're certainly very excited to see the industry looking at these challenges and addressing them. We're always happy when consumers are able to find the safe, legal content they want, when and where they want it. It's heartening to see that the entertainment industry is trying new things in order to provide it.
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