• About

LIVEdigitally

Monthly Archives: July 2013

All anyone needs to do to "disrupt" television is…

Posted on July 19, 2013 by Jeremy Toeman

Want to know how to “kill” the traditional TV industry?  It’s easy.  Come up with a cash flow of roughly $70 billion.  That’s it.  Pure and simple.

The thing about it, that so many people out there seem to not grasp (which frustrates me to no end, I must say), is it takes about that much money to maintain the rough production costs (and profits) for all the shows we love to watch.  See, we all know that there’s some perfect blend between Live TV broadcasting and an all-streaming/on-demand library (neither end of the spectrum are “correct”), but we don’t know how to get there.  Meanwhile, everyone wants to talk about killing/disruption the TV ecosystem. So let’s talk about the cold hard facts of this world:

TV Shows Are Expensive to Make. While new technologies across the spectrum certainly reduce many aspects of production, if you want a Game of Thrones, House of Cards, Mad Men, Breaking Bad, etc type of show, you need sets, lighting, etc.  We *cannot* get around that statement in any way.  So regardless of the surge in lower cost reality shows, if you enjoy quality dramas/comedies for 44/22 minutes at a time, you need a budget.  Unless you can get all the actors, directors, writers, key grips, etc to take a big salary haircut, this will not change.

Advertising Pays The Bulk of it. Other than fine shows from HBO, Showtime, Netflix, and a handful of others, the wide array of money that covers costs of TV shows comes from the $70(+) billion ad industry.  There is no model, from subscription to a la carte to anything else that can easily replace this cash flow as far as I am aware, but if so, I’m sure we’d all love to hear about it.

victoryag.org Advertising Models Are Based on Live/Near-Live Viewing. Another tough, but true, fact about the existing ecosystem is the revenue is predicated on live audiences.  While I love catch-up and streaming as much as anyone, it does not contribute to the bill-paying.  For this to change/shift/be disrupted, the massive amounts of people, and money, all have to come up with an entirely new model for their world.  Again, even if we know there’s a desire/trend toward a decrease in live viewership, nobody, anywhere, has come up with a successful alternate structure here.

So the TL;DR version of the above: TV Shows Cost a Lot Of Money, and the Only Way to Pay for them is Advertising, and the Only Way Advertisers Spend Money is on Live Viewing.

If you want/expect the above statement to change, get ready for more ads in your streaming – lots of them.  Like 8 of every 30 minutes worth.  That’s what it takes.

While we’re at it, I just want to add two topics regarding the discussion around TV disruption:

Pay-TV Operators Have an Arbitrarily Bad Rep. It’s easy to blame Comcast, ATamp;T, etc for anything and everything, but they should not be pointed to as “the problem” of television.  Yes, they have their part to play, but when you consider the fact that someone has to send people into homes to repair lines, answer customer service calls, etc, there is always going to be an easy enemy.  And as much as our cable bills have risen dramatically over the past two decades, the cost the operators are paying for content have risen *more* dramatically, and those costs are not entirely being passed along to consumers.  I’m not defending anything about Pay-TV providers, but I’m also not in agreement that they are “bad” and everyone else is “good”.

Most Startups Are Clueless About the TV Industry. Yes, that probably sounds harsh, but considering the quantity of companies who spring out of nowhere and want to disrupt or change things, it amazes me how few of them actually take the time to learn enough about the world and business they are getting into (read Mike Wolf’s solid piece on this here).  This is important because the “TV Industry” is actually an amalgam of many industries, from service providers, content production, distribution, studios, data, etc.  It’s easy to say “TV Industry” but in reality, we shouldn’t say it at all – it’s isn’t “an” industry, it’s many.  My tip to startups: pick one specific sub-industry you want to get into/go after/change/kill/whatever, and go learn how it *really* works.

So there you have it, your simple recipe for how to disrupt the simple world of television.  Good luck with that.

Share this:

  • Email
  • Facebook
  • LinkedIn
  • Twitter
  • Reddit
Posted in General | 4 Comments |

About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

Recent Posts

  • Back on the wagon/horse?
  • 11 Tips for Startups Pitching Big Companies
  • CES 2016: A New Role
  • Everything I Learned (So Far) Working For a Huge Company
  • And I’m Back…

Archives

Pages

  • About

Archives

  • January 2019
  • April 2016
  • January 2016
  • December 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • January 2014
  • December 2013
  • September 2013
  • August 2013
  • July 2013
  • May 2013
  • February 2013
  • January 2013
  • December 2012
  • October 2012
  • September 2012
  • August 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • June 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • March 2006
  • February 2006
  • January 2006
  • December 2005
  • November 2005
  • October 2005
  • September 2005
  • August 2005
  • July 2005
  • June 2005
  • May 2005
  • April 2005
  • March 2005
  • February 2005
  • January 2005
  • December 2004
  • November 2004
  • October 2004
  • September 2004

Categories

  • Convergence (81)
  • Gadgets (144)
  • Gaming (19)
  • General (999)
  • Guides (35)
  • LD Approved (72)
  • Marketing (23)
  • Mobile Technology (111)
  • Networking (22)
  • No/Low-tech (64)
  • Product Announcements (85)
  • Product Reviews (109)
  • That's Janky (93)
  • Travel (29)
  • Video/Music/Media (115)
  • Web/Internet (103)

WordPress

  • Log in
  • WordPress

CyberChimps WordPress Themes

© LIVEdigitally
loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.