How Did We Manage to Make Watching TV Hard?

Pop quiz: Which channel carries "Ice Road Truckers"? Discovery? History? National Geographic? Is it the same channel as "Deadliest Catch"?
(Answers: History, and no - that one's on Discovery).

Now which website do you go to to find it? Well, that all depends. For example, where are we in the season? During premiere week, there's a good chance generous amounts of current, full-episode programming will be available on both the History Channel website or via Hulu which either carries the programming natively or links you to the History Channel website.

Okay, so same for "Deadliest Catch", except that would be on the Discovery website, right? Oops, not quite. You can find some clips and excerpts on Hulu and links to a bit more on the Discovery web site, but full episodes, no. Even if you have website access to full episodes, that's only until they decide to take down the shows. Sorry, not clear when that would be exactly, depends on the show or how one or more channels and/or websites change their policy.
Even dedicated viewers might find this sort of viewing "Tougher in Alaska" to quote yet another show title in the Alaskan enthusiast genre. Oh, and that show only has clips available on History or Hulu, but you're welcome to buy episodes on iTunes and of course DVDs, once the season wraps. Got it?

Seriously - why is this so hard? Under the general rubric of "Television Everywhere", there's at least an implicit promise of letting viewers watch what they want, when they want, where they want. Yet nothing could be further from the truth. Doubtless all these distribution decisions are individually logical, consistent with the revenue-maximizing idea of release windows, but the net effect is chaos. In fact, internet TV in general has so far been compounding an already-serious problem of fragmentation and channel brand destruction or, to drop the industry jargon, generally jerking viewers around.

Forget about the internet for a minute. Let's look at how many channels viewers have long been getting in the plain old "linear" television world, and the little help they get to manage them.

In US multichannel TV (e.g. cable, satellite) we now live in an approximately 400-channel world. This is a full multiplex count in that it includes the, say, fifteen versions of Discovery (Discovery Kids, Discovery en Español, etc., etc.), eight or more of HBO and so forth. Nevertheless, even the broad average channels per viewer broke the hundred-channel barrier quite a while ago and for premium subscribers is considerably higher.

Secondly, less than half of US subscribers have the tools to even begin to manage viewing in this sort of environment. Almost 70% of US television households don't yet have a DVR. Of the 30% or so that do, our complete swag of an estimate is that half of those have no idea how to use the advanced features to find and schedule their viewing in a consistent, meaningful way - i.e. for half of DVR users, it comes close to having an old VCR sitting under the TV, blinking "12:00"

Then there's Video on Demand. Let's be generous and say about half of US television households have digital cable (the technical prerequisite - the satellite guys are still trying to figure this one out). Therefore, half potentially have the convenience of watching what they want, when they want. But they don't - according to Leichtman less than 2/3 of those self-report being regular VoD users.

MSOs have become cagier (could there be a problem?) about releasing VoD buy rate information other than of the "billions viewed" sort. But we already know that buy rates decline rapidly after initial experimentation. And if viewers were going wild with the convenience of VoD, you can be sure we'd be hearing about it. As with the DVR, slogging through the set top interfaces to find, select, and view what they want, isn't for most viewers.

So netting it out, less than half today's television households are capable of using the inadequate "advanced" multichannel TV viewing tools they've been given. We're not only a ways off from 'Television Everywhere', we're not even coping with the television industry's pre-internet reality of complexity and missed opportunities.

Want to know how to fix some of this? Stay tuned to this blog... 

By the way, if you’re interested in a couple of minutes of fun – a rather “high-level” consumer complaining about even more basic aspects of the flawed TV experience (boxes, buttons, remotes) – here’s the Duke of Edinburgh. The interview below marked the 50th anniversary of the Prince Philip Designers Prize, and design commentator Kevin McCloud interviews H.R.H. Prince Philip about his passion for good design. The brief but acerbic television critique begins at around 6m 50s.

 

H.R.H. Prince Philip on interacting with a televison as "one of those ghastly things" - 6:50

Television Everywhere is Nowhere (Yet)

It wasn't supposed to be like this. Hulu, Amazon, Netflix, and, yes, even YouTube, were going to usher in an era of unprecedented choice and convenience. And if that didn't do it, the US cable industry's "TV Everywhere", or the UK's Project Canvas would - allowing (authenticated, of course!) paying subscribers to access, well, some stuff over the internet.

Rather than deliver on Television Everywhere's implicit promise - watch what you want, when you want, where you want - efforts so far have just made watching and supplying television harder and more fragmented than ever.

In Hollywood's original script, even a whiff of internet-enabled TV was bad. So bad that in Episode 1 ("Oh no you don't") once Google acquired YouTube, Viacom sued them for "massive intentional copyright infringement" to the tune of $1 billion. Studios to internet people: we own the intellectual property around here. Message received - Google has taken down tens of thousands of commercial, copyrighted video files. No more John Stewart.

As with many big budget productions, Hollywood revised the script. They realized that, having established who's in charge of content, they were in control of how quickly it flowed to new distribution channels, as we noted way back in 2005. So, in Episode 2 ("Did someone say 'revenue'?") Hollywood decided, quite rationally, to lay down a marker for future internet distribution. And so Hulu was born.

All the while, the television industry and its "linear" products and distribution channels have done better than ever. Broadcast viewership is at an all time high, CPMs nearly so if you can feel your way through the usual post-upfront fog. So-called "over-the-top" (OTT) internet viewing is still tiny - roughly 3 minutes a day per person vs. 300 minutes a day for good old TV - and, if anything, seems to complement rather than substitute for linear TV. And even without international distribution, it's studio-controlled Hulu that has become the (still-distant) number two video streaming site in the world, right after YouTube.

By some measures, the dog caught the car, so how are we doing on that other piece, you know, the "unprecedented choice and convenience" part? Not so well, actually.

One problem is that Internet TV can't seem to make up its mind what it wants to be other than being delivered via the internet. From a viewer's point of view that's not nearly enough and is largely irrelevant. What viewers and suppliers alike need is a way to unwind the insanity of brand, show, and channel fragmentation and make watching TV easy again.

So far, what we're getting is this:

• One-stop shopping that isn't: pull together links to shows you're interested in, independent of who actually provides them (Hulu, abc.com, dailyshow.com, whatever) and provide some ways to sort through lists and then view video over the web. Excellent, right? No. Unfortunately, random policies over when and how much of full-episodes vs. highlight vs. clips appear on what site from what channel how soon after broadcast make it nearly impossible to know what to expect. Combined with technical inconsistencies from site to site that defeat attempts at "integration", and still widely-scattered content, and even Hulu's efforts at one-stop shopping are marginally useful at best.

• Smart(er) EPGs: online and pocket versions of electronic program guides so you can know what's playing and perhaps take some corresponding action

• Set-top backdoor: program your TiVo or set-top box remotely (see also 'Smart(er) EPGs')

• Sharing: (or, more fashionably, adding "social features" to your TV viewing) create shareable playlists, favorites, or share media artifacts via Facebook, etc.

• Recommendations: like Netflix or Amazon, bring what is more technically known as "collaborative filtering" to television viewing and sharing

Today we have a few prototype examples of features and feature combinations, delivered by everyone from a cable company with an iPhone application, to destination sites like Hulu, to web startups. And when you're trying to help viewers solve a fragmentation problem, is having many fragmented "solutions" in turn actually going to help?

And so, for now, Television Everywhere is largely nowhere. Want to know how to fix some of this? Stay tuned...

CSI Hollywood: The “Death” of Television

We've seen this movie before. Sixty years ago Hollywood was marked for death. "Television" had arrived and it was free, convenient, modern and soon insinuated itself into the very fabric of the post-war consumer lifestyle.

In 1946, Twentieth Century Fox's Darryl Zanuck is said to have remarked: "Video [meaning television] won't be able to hold onto any market it captures after the first six months. People will soon get tired of staring at a plywood box every night." As time went on, other studios weren't quite so sanguine - former Disney CEO Michael Eisner recalls that as a child, the RKO theatre marquee in his neighborhood admonished, “Don’t watch TV.”

But of course people did. By 1956, 65% of US households had televisions (up from less than 5% when Zanuck spoke ten years earlier) and watched them for about 5 hours per day.

Instead of dying, movie studios overcame adversity much like the resourceful heroes in their own films. They transformed, recombined, and survived an often chaotic, sometimes near-death ride to prosperity, re-emerging at the center of the much-consolidated entertainment industry Hollywood is today.

Now, according to experts, the Four Horsemen of the Apocalypse are back, riding not colored horses, but the internet. It's TV's turn to die. In fact, according to some it's already dying. Except it's not.

Bob Hoffman, ad agency CEO and maker of Toyota Prius commercials by day, 'Ad Contrarian' blogger by night put it best:

"It is a story built on shabby journalism, ad industry buffoonery, and the willful suspension of skepticism on a scale unprecedented during my time in the advertising business."

And just because we're management consultants, let's not avert our gaze from our own industry's buffoonery.

A staple of the management consulting business is the "Death of...", "End of...", and "Future of..." oeuvre with apocalyptic overtones. Its intention is to scare (the pitches are often called internally "the burning platform") and motivate clients to meet, maybe even to buy. There's often a blizzard of smart talk and data from which all the reader can ultimately extrapolate is "Gee, maybe I'd better hire these guys because it's so complicated."

Then the impressive volume ends with a simultaneously vague but very ominous conclusion.  Here's an actual one: "At a time of exquisite [sic] change in both demand and supply, immediate action is required." It then prescribes an agenda which includes such winners as "harness differentiated skills and competencies", reminiscent of  China's "Achieve the Four Modernizations!" in the late 1970's, except the Chinese used clearer English.

Television as we know it is under threat. The internet is going to change television. In the long run, television and the internet will combine to form a different medium. In the meantime, however, the relative vibrancy of the television industry and the arrival of internet-delivered video are creating an opportunity. At minimum, to slow the erosion of a huge and healthy industry, and at best to expand the business with economics very similar to today's. 

In our forthcoming book "Television Everywhere: How Hollywood Can Reclaim the Internet and Turn Digital Dimes Back in to Dollars" we'll provide some practical advice on how studios, show runners, channel executives, digital agencies and the like can do that. And our next few blog entries will select a few nuggets from the book, usually with a bit of data, to frame the opportunity and lay out the fundamentals of our case.

Before the closing credits, however, let's leave you with three sets of facts. Given the last years' economic downturn, the television industry may need to have its cholesterol levels checked, but it's nowhere near the cardiac ICU.

1. It's still very big and reasonably stable.
    
   
2. Prices have held up well.
   
   
3. Television is still by far the biggest, most pervasive medium. We pulled this rather astonishing chart from data in the recently published Video Consumer Mapping study. The size of the circles is proportional to how many people use the medium.

   Live television reaches 94% of viewers for 331 minutes every day.

    

Stay tuned...