When the levee breaks on this golden age of TV, what does that look like?


#41

I can think of a lot of better metrics to use for this stuff though. What the market thinks you’re worth tells us whether the investors think the future is rosy or not, but there are a bazillion things that might affect the stock of [CBS, NBCU, Disney/ABC, Fox, Viacom, Scripps, Time Warner] especially when taken in aggregate. Time Warner is a mega-corp that does content was well as hardware, and includes the thriving HBO as well as the floundering Turner. Fox includes not only a bunch of cable channels, but a failing movie studio.

It may be that when you squish them all together it all kind of comes out in the wash, but from my layman’s view, it seems like pointing at GE’s stock price falling and saying that light bulbs are doomed.


#42

I think you’re wrong…er, I at least disagree with this completely, let’s say that. ;)

I could see this wider view if we were looking at this from a perspective of a larger span of time or a wider collection of media companies.

But this is narrow, and it is precipitous and striking.

The top 7 content providing media companies, over a five month span of time have lost 13% of their total aggregate valuation.

That suggests single causation in a targeted time period so strongly that suggesting divergent individual factors affecting each individually by that much in that narrow window is simply neither plausible or rational.


#43

I disagree a little, because I guess I’m envisioning a scenario where we get nickle and dimed to death for the same content.

I think you’re looking at what Netflix and Hulu are now, not what they might become as the landscape evolves. Right now, Netflix is a silly bargain, so much so that if you watch filmed entertainment at all, you’re crazy not to have it, assuming you can pay for the other elements within the hierarchy of needs.

But the content that Netflix airs is stuff that was contracted to them under older, flawed views of the model. AMC thought they could send old episodes of Mad Men and Walking Dead to Netflix and people who didn’t watch those shows would get hooked on an older season and tune in to the current season and become fans and maybe even buy physical home media (blu ray/dvd packages) for those shows. That was probably back in 2008 or 2009.

What we are seeing appears to be that a significant number of consumers are happy to wait for seasons of these shows to just land on Netflix 6-12 months after original airing.

So…if you’re AMC when these content contracts run out, you’re either re-upping at a significant markup to make up for lost ad and home media purchases, or you’re taking your content to your own platform and charging for that.

And so no one needs to jack up prices significantly. Netflix can stay at $8-10 per month…but it will have less content. And to get that content, you’ll have to have three or four or five other monthly subscriptions, and now what you’re paying starts to approach pay cable levels more.


#44

I know one thing that kind of lends credit to your belief, and that is that I believe ESPN is one of the biggest causes of the price of cable increasing as they keep charging and demanding more from providers for their content. I do wonder if ESPN showing up on alternative providers (ESPN is part of the Sling package) will allow them to keep their rates down for the big providers.

I have been looking at dropping cable, and once I pay for any hardware items needed, I figure I would save about $100 +/- per month. Alternative services (netflix, hulu, sling) would have to greatly increase costs to change that.


#45

I wish that was a first for today. Or even this hour.

Yeah, I agree with the conclusion as well. I believe that the investors are worried about the future of content-creation and being able to make money from it, and the stock-drop is more than just the typical ups-and-downs of big companies.

My point is only that content revenues are not themselves down 13% year-over-year. It’s the market’s judgement, not consumers’. At least not yet.

I reckon time will tell on this, but I think it’ll end up being fairly flat.

I pay $X amount for a silly bundle of cable channels through my Internet provider, 90% of which I don’t even tune into. When I turn that off and instead do an a al carte selection of only the channels or only the content that I want to see, chances are it will end up being roughly the same amount.


#46

Andrew Ross Sorkin writes about this today in regards to an analysis that ESPN is becoming a very heavy anchor around Disneys neck


#47

Ginger Yellow suggests that people will be OK with paying more for the convenience and portability. He might be right.

I don’t know if “people” will be OK with it, at least if it comes with an up-front cost. Experience shows that price trumps quality in a lot of markets, and given the shit that most people watch, I’d be surprised if telly were any different outside of live events and maybe movies, though even that’s doubtful these days. What I’m suggesting is that I’d be OK with it. I’ve long wanted Netflix to increase their rates so they could have more third party content. But they’re clearly taking the view that they’d rather have exclusive in-house content than pay up for high profile pre-aired content (at least in the domestic market - they seem quite keen on these as-live deals overseas, presumably because they’re much cheaper).


#48

Not directly TV related, but definitely related to the topic at hand. A new Pew study shows broadband penetration plateauing. Why? Because the price is too damn high.

I seriously think the cable and telecom players in the United States will reach a point in the not too distant future where regulation finally comes crashing down on them because they have leveraged the lack of competition to the point where the abuses are just too obvious for politicians not to act. Either that, or they’ll have to invest all their billions in buying members of Congress.


#49

As an old fart it is hard to imagine the 25 year old me paying what the 60 year old me pays for cable, a land line, wifi and cell phones. It is hard for the 60 year old me to imagine anyone making less money than me (and we aren’t exactly rolling in the dough right now) being able to pay for that.


#50

Actually what I’ve really long wanted is a sensible pricing structure for bespoke TV VOD, eg iTunes/Google Play. The report talks about 30c an hour, but you can quite easily pay several pounds for 10 minutes of TV on online services. It’s insane and I can’t believe more than a handful of people are buying shows that way.


#51

If the main driver of cord-cutting was to lower costs, well, let’s just say I don’t see jacking up the prices of all these a la carte services working the way providers hope it will. The younger generation has grown up with Youtube and Twitch providing on-demand content for free and unless you’re interested in a specific piece of content it’s “good enough” (and even then, with all the personalities on these two sites, they may have that specific piece of content). For me personally, I have enough content to watch or play (or both in the case of some games) that I would be fine to go completely without – and for the past five years have aside from Netflix and league passes for MLB and NBA.


#52

I think convenience and a relatively low price-point will go a long way.

Although the pressures are very different, this situation reminds me a lot of the music market around the turn of the century as we migrated away from physical media towards digital.

The analogy breaks down if you squint at it too hard, but you had many of the same elements: people declaring the death of an industry because consumers will not willing to pay for the content in the new form; dire statements about no one being willing to spend any money on developing artists; lots of hand-waving about artists not being able to survive unless everyone was forced to buy entire albums instead of single songs; and of course the apocalyptic visions of Napster training everyone not to expect to pay for music ever again.

And part of those fears DID come true: you don’t see many record stores any more. But that’s about it - the music industry didn’t collapse, there is no dearth of new artists, and most people (or at least most Americans) are happy enough to pay $1.29 per song.

I’m actually excited to see what the a la carte model spawns in terms of funding new series content. For example, I envision “pre-order discounts” as a way for studios to show investors that their concepts have merit before filming begins.


#53

I was thinking of the “death of radio” when TV was introduced after WWII. Yes, radio stopped being the home of scripted serial programming, but it didn’t go away. After a disruption, it found its place.


#54

I’m not sure I can say “man that is NOT how it seems to me” enough here.

I mean, at first read it sounds mildly plausible, but it starts off by imagining an ecosystem where the motive consumer is under age 18. While they’re important, the drivers of consumer content platforms are all older than that, and they’re going to be in that demographic sweet spot for for 10-20 years. TV is going to change pretty strikingly within the next five.

But even then, suggesting a world of content consumption where people only view content they’re actually interested in as some sort of luxury and that everything else is “good enough” is the kind of programming doctrine that was shot full of holes about 3 decades ago. Consumers of video content consume that content specifically because it is something they’re interested in. Look around this thread. No one’s praising the random two hours of Youtube they watched yesterday and suggesting others watch two hours of youtube today. People talk about specific shows, actors, directors, and writers. Specific content is exactly what drives viewership and content consumption, especially the viewership willing to follow a show off one platform onto another.


#55

That’s a massive change, dude. As in, a bubble bursting or end of an age type thing. I think if you asked video media content providers if they’d be assuaged by a “radio found its place” argument, they and their investors would spend Christmas gargling hemlock.


#56

Again, I have to wonder if I live on some other planet, because the part here that I just bolded is not only specifically NOT true, it’s so not true that right now the music industry is in a massive struggle of its own that even more starkly paints a picture of an unsure future. It’s perhaps THE biggest industry story in music content delivery since the introduction of the CD, bigger even than mp3s and file sharing in its implications and potential impact.

(People don’t buy music as much as they used to, and the trend towards streaming is becoming an avalanche and content creators aren’t being paid for it.)


#57

But even then, suggesting a world of content consumption where people only view content they’re actually interested in as some sort of luxury and that everything else is “good enough” is the kind of programming doctrine that was shot full of holes about 3 decades ago. Consumers of video content consume that content specifically because it is something they’re interested in. Look around this thread. No one’s praising the random two hours of Youtube they watched yesterday and suggesting others watch two hours of youtube today.

Well that’s because we have a Best Youtube videos thread. I’d quite happily recommend 2 hours of Youtube for you to watch today. I watched about an hour myself and thoroughly enjoyed it. I’ve got about two dozen channel subscriptions, which is more channels than I watch on linear TV, and produces about a day’s worth of content every day. Admittedly I’m not going to watch every DotA match that goes out, but I’ll watch 90% of many channels’ output.

And, more importantly, while I don’t have kids myself to provide anecdata, you constantly hear that the 10-18 year-old set are watching far, far more Youtube and Twitch than linear TV or even Netflix. It’s not just “good enough” for them, it’s what they want to watch, namely makeup tutorials, Minecraft, and silly skits. That’s what I’d be shitting myself about (and Vine, Periscope what have you) if I were in the traditional TV production ecosystem, not getting paid a bit less by Netflix. Screw being trained to wait for TV shows, a generation has already been trained not to watch “shows” at all.


#58

I think you missed the point, but that’s OK. Data that I can’t share because of NDA says pretty conclusively that even “original” youtube content relies heavily on pre-existing content, and at any rate telling 43 million Netflix subscribers that an evening of teen kid vlogs and Buzzfeed candy challenge countdowns is going to replace episodes of Parks & Rec seems like a stretch.


#59

Perhaps part of the problem is the music industry cried wolf when they were faced with selling individual tracks that no one hears them with streaming. As Adele attests to though, no one forces them into the streaming model.

Back to TV. I won’t pay almost 200 dollars a month for content, period. It’s a ridiculous price, and some of those channels received dollars from me when I never touched their content… couldn’t stand it even. I’ve cut back to broadcast channels, HBO and buying seasons in disc. My TV viewing has dropped drastically over the years, and I don’t miss it. I’ve filled that slot with other things.

One thing I still pay for those are tickets to the movies. I enjoy the experience, not just the content. There’s still value there for me. I also buy music tracks as I hear and want them, way less than the streaming models ask me to pay each month. I’d rather just have it free and clear at a few bucks a month… if that.


#60

Apologies if someone has asked or answered but in light of the breaking levee aren’t there some parallels here to the Music Industry, artists, songs and consumer payment methods? In fact, it seems like re: Hulu, Netflix, HBOGo, etc. that TV is pretty much already there. I guess I’m asking how come this development didn’t ruin the Music Industry (as we know it)? Mean old levee…

{edit} …aaaand it is literally in the post above me. FML.