The one thing that will change the business of television

By Guest 

(By Mike Proulx, Co-Author of Social TV, SVP/Director of Digital Strategy at Hill Holliday)

There are conversations happening in the boardrooms of every TV network and MSO about the one thing that could have the most impact on television as we know it today. And it’s something corporate communications professionals across the industry don’t want to be public about – at least not right now.


No, it’s not social media, 4k, or DVRs – and it’s definitely not 3-D or second screen apps. It’s the one thing that gives television its lifeblood and is the backbone of its DNA: TV’s very own programming – its content.

When Steve Jobs introduced the redesigned Apple TV in September 2010, he was emphatic that people want “Hollywood movies and TV shows…they don’t want amateur hour.” He, of course, was highlighting the quality gap between on-demand television and online video content.

Fast forward two and half years and, today, television’s canvas spans far beyond the TV set and onto myriad portable and connected devices – all powered by the Internet –always within arms’ reach.

And that Hollywood grade content we’ve come to love and expect from television? It’s no longer getting produced and distributed by just the TV networks. Enter Netflix, Hulu, Amazon, Redbox, Microsoft – and even Rovio (Angry Birds) – who are all producing (or acquiring) original “TV” series. And their core distribution strategy relies squarely on new media channels – completely bypassing the TV networks and MSOs.

Over-the-top (OTT) streaming services are looking more and more like premium cable channels. Netflix and HBO both have a mix of movies and original “TV” series. There are close to thirty million U.S. Netflix subscribers and this is right on par with the amount of HBO subscribers (give or take a couple million). The two big differences (outside of debating the quality & quantity of content) are that you can’t subscribe to HBO as a stand-alone service and Netflix’s current original series strategy is to release entire seasons of content all up front.

In a way, Netflix et al are really just unbundled cable channels – but entirely on-demand that happen to be delivered via the Internet. And while HBO GO is the best-in-class “TV everywhere” platform, it’s just not in premium cable networks’ financial best interests to operate as stand alone entities – at the moment. But you can bet they’re all closely watching what’s happening with the likes of Netflix’s House of Cards and Hemlock Grove. And just as the networks aren’t publically commenting on the phenomenon, neither is Netflix about the amount of people who are actually streaming their marquee original series – other than saying, after its debut, that House of Cards was “the most-watched thing on Netflix.”

OTT services tout their inherent “anytime anywhere” model but human behavior also underscores the importance of real-time connection with one another. That’s one of the draws to watching TV when it airs – especially in the social TV era of television. There’s excitement, hope, and anticipation that happens in between linear TV episode airings. Communities form and grow over time, and engage across platforms before, during, and after a show’s broadcast. While on-demand is “in demand” so still is live television. The two must (and can) coexist under the umbrella of “TV.”

Broadcast and cable networks are certainly not oblivious to this changing tide, as Jesse Redniss, SVP of Digital for USA Network, notes his network’s own SUITS Recruits multi-platform video series in which consumers engaged across screens and access points – including VOD, Hulu, iTunes, and YouTube – creating an integrated cross-screen/cross-device experience. Redniss says this is a great example of “driving the story from a top cable show with fan favorite characters in new directions, deepening the consumer experience beyond forty-two minutes, into their every day lives.”

When it comes to advertising, well, many of the streaming video subscription services (just like premium cable) aren’t ad supported. But Hulu sure is and they’re creating interesting ways for advertisers to be integrated into their original series programming giving brands the ability to reach a bit more niche/targeted “TV” audiences. While more “channels” leads to even more viewership fragmentation, this could actually be a good thing for brands.

As Shiv Singh, Global Head of Digital for PepsiCo Beverages, shared with me, “We’re finding that media fragmentation is resulting in increased, more dynamic and more creative ways for us to reach our consumers in real-time and in ways that both build our brands and add value to their lives. It is no more about television versus digital or the :30 second spot versus the pre-roll or the networks versus streaming services. It’s about real-time story telling across platforms and devices harnessing the power of social signals from the web and enabling multi-platform experiences – some driven through media partners and even sometimes directly to consumers. Video will always matter immensely as a format for communicating brand stories and as long as television is an effective distribution medium at scale for brands so too will it.”

The key is for brands to partner early with the right media company for their given target audience. As Jesse Redniss adds, “Advertisers are recognizing the ability to use platforms such as Hulu and YouTube to hyper target a specific demographic or psychographic. By working with production studios upfront, whether it be FullScreen or ShineAmerica or USA Network, they can help co-fund this content, utilizing it as a feature part of their content marketing strategy.”

In contrast to all of the upside to what’s happening with television content, there’s still risk to broadcast and cable networks as well as MSOs. As TV becomes increasingly seen as video regardless of how its produced or distributed and as Hollywood quality content attracts more people to streaming services, it is possible this could come at the expense of some broadcast or cable TV viewing. But it will happen slowly over the course of time – yet make no mistake that this very topic is top of mind for every television executive industry-wide. And that’s why “TV” content itself is the one thing that will change the business of television.

While you may be thinking this is yet another affirmation for an impending death of TV and the thirty-second spot, history tells us this is simply not the case. When premium cable began to take off in the late 1970s, television survived. DVRs were thought to kill live TV viewing yet television is surviving. So too will television survive as it enters this new era. The seventy-four year old medium has proven itself to be both timeless and resilient because it continues to evolve, adapt and, most importantly, innovate.