[opendtv] Re: TV Ratings Have Hurt Creative Side of Television, Says Netflix Content Boss Sarandos | Variety

  • From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 12 Dec 2014 09:31:26 -0500

On Dec 11, 2014, at 8:18 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx> 
wrote:

> They are successful because it is a value proposition that people were not 
> getting previously. More choice at a good price, or they allow people to 
> shave or cut their cord, and get some of what they might have lost back, at a 
> good price. OTT sites are that second supermarket in town, Craig. Where 
> previously you could only shop at one place, subject to that one store's 
> prices, now you have a potentially unlimited number of alternatives.

I agree that these sites provide something they could not get previously. 

Near the top of the list is access to recent shows without having to watch or 
record the live stream. It was not that many years ago that the typical network 
show had 18-26 episodes, which aired once, then a second time during the 
"summer reruns." If you missed a show you had to wait six months to see the 
next live stream.

Due to the massive cost increases brought about by overpaid actors and craft 
unions, the number of episodes dropped to 13 for most shows, and the frequency 
of reruns increased. And the growth of alternative content delivered by the 
MVPDs began to take its toll on network ratings. The networks responded by 
bringing more content creation in house and developing "unscripted" reality 
shows to replace some of the expensive scripted episodic shows. Ratings 
continued to decline.

The Internet is providing the technology to make content available on demand in 
a number of ways as I outlined in the previous post. I would add, that there is 
nothing new about the growth in stores that sell content. The VCR enabled 
consumers to buy or rent content way back in the '80s. You could buy complete 
seasons of networks shows, and much of their old library content was released 
on VHS, then DVD.

What has changed it that you can access this stuff without leaving the comfort 
of your recliner, or for some the relative discomfort of watching TV on a 
desktop PC.

It might be a useful exercise Bert to ask yourself why the content congloms are 
making their shows so much more accessible?

Could it be that there is no longer any reason to sit down and watch live 
streams by appointment?

Could it be that most of the audience has moved to secondary middlemen that are 
paying the congloms big bucks for their popular shows?

Could it be that the old promotional engine of program adjacency and promos 
embedded in other programs is no longer working, making it more difficult to 
discover new shows?

Could it be that some people are tired of having their entertainment experience 
constantly interrupted with commercials and promos, and are willing to pay for 
commercial free SVOD services like Netflix?

Could it be that the content restrictions imposed on broadcasts have made 
network content less desirable, when compared to shows from non broadcast 
networks like HBO, Showtime, AMC, and now Netflix, where sex, nudity, explicit 
language and violence are used to attract an audience?

You like the store analogy Bert, but it too is under assault from the Internet. 
Why drive to a store when you can order something from Amazon and have it 
delivered for free when you pay $99/yr for Amazon Prime?

The MVPD model has never been the only place you could buy content. It 
supplemented FOTA broadcasts, then lived side-by-side with packaged media sales 
and rentals. It has been successful in large measure because it offered more 
choice at a reasonable price compared to the other ways you could buy content. 
Over time it also grew in importance as more and more exclusive content moved 
into the extended basic bundle. 

Stores need a good reason for you to shop there. It may be quality or low 
price. It may be convenience. It may be the only place you can buy something. 

For television content, exclusivity is VERY important. This is why content 
companies pay SO MUCH for the rights to exclusive content like the Olympics, or 
shows that you cannot access unless you pay for a particular service, be it the 
MVPD bundles, HBO or Netflix.

Some content is like wine. Some wines are best enjoyed when they are fresh; 
some get better with age; and some are ageless. The time value of content is 
almost as important as exclusivity. Some people want to see it when it is 
fresh. Some wait until a show has received popular acclaim, or a peer 
recommendation. And some shows become cultural phenomenons that people want to 
see more than once.

The biggest impact that the Internet is having is that it makes all content 
searchable and available on demand without having to drive to a store.

> As to the VOD aspect, if you're a cable subscriber, and all you want is 
> movies on demand, or you want to watch a prime time show you might have 
> missed, NO NEED for OTT sites. The cable system already offers this service:
> 
> http://www.cox.com/residential/tv/on-demand.cox#freezone

This is a recent phenomenon, and in many cases was an add on cost. More 
important, OTT is directly competing with these services.
> 
> So once again, I do not need to be given a long list of reasons why it's nice 
> to have VOD. Everyone knows why it's nice to have VOD. I'm simply pointing 
> out that VOD is not the sole province of OTT sites. Hence, it's not the 
> determining factor in why people like OTT sites.

Never said it was the only reason (see above). 

But we are talking about trends Bert. The fact remains that the audience is 
moving from the consumption of pre-produced programming by appointment to one 
of many on demand alternatives.
> 
>> ALL TV Everywhere services are OTT sites;
> 
> Maybe so, but I wasn't talking about TVE. I was talking about VOD not being 
> the sole province of OTT sites. Or let me say it this way. VOD is not the 
> reason why Netflix is beating out HBO, as you claim. HBO is also available 
> VOD. A common feature!
> Therefore, there must be other reasons why Netflix is so successful, Craig. 

Sorry Bert, but a big reason that Netflix streaming got a foot in the door was 
VOD. HBO was a live stream service until recently, when they starting offering 
HBO Go as a TV Everywhere alternative. The announced, but not yet available 
version of HBO for cord cutters is a direct reaction to the success of Netflix.

Netflix is successful because MANY people prefer ad free entertainment that is 
available on demand. Netflix is successful because they are investing billions 
in exclusive content. Netflix is successful because it makes binge viewing easy.

> You're off on another conversation, Craig. Following that thread I repeated 
> above, if you want to prevent people from stealing shows, give people the 
> option of watching shows ad-supported, or by subscription with fewer or no 
> ads. If given that option, you will see a lot less theft.

Both of these options are available now, but people are still using "borrowed" 
authentication credentials to avoid paying or to see shows sooner. And there 
ARE NO ALTERNATIVES for live sporting events that require a MVPD service or 
authentication.

Regards
Craig
 
 
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