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The Guardian asks: Is the golden age of television over?
Money is the root of TV's problems. In the US, where the TV economy is headquartered, TV and internet access costs two to three times what it does in the UK, and networks are in a tug-of-war with Americans, who are increasingly shredding steep cable bills in favor of Netflix and streaming services. This summer, many networks became locked in all-out legal battles with cash-strapped cable companies, with multibillion-dollar distribution deals at stake to fund those networks' huge programming budgets.
Executives are planning for a less luxurious future, in which TV shows may be briefer, lower-budget and filled with the kind of product-placement ads that audiences hate and advertisers pay for. Worse still, the company that started much of the trouble may soon confront flaws in its own business model.
Netflix reports earnings on Monday. Its problems, and those of companies like it, are more pressing than those of traditional television. At a conference in New York this month, chief executive Reed Hastings was blunt.
"Disney, who is very good in China, had their movie service shut down," he told an audience at the New Yorker Tech Fest. "Apple, who is very good in China, had their movie service closed down. It doesn't look good."
Hastings said his company was seeking to expand in other countries, India in particular. But there's a reason media businesses seeking vast scale tend to view China as the solution to all their problems: internet penetration in India is rising from 26% according to the World Bank. In China, it's rising from 50%.
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Netflix needs the money that increased scale would provide, in part, to pay top dollar for shows such as Arrested Development and Lost. In January, it told investors it owed $10.9bn in TV show licenses alone, with $4.7bn of that due this year. After that, almost the entire balance is due before the end of 2018.
Netflix will have to keep buying reruns at what will almost certainly be increasing rates if it wants to retain its users, and the companies selling those shows are now in a tight spot too – largely thanks to the ad-free Netflix model.
At US television networks, budget struggles mean making shows more as UK networks do, except with lots of ads and product placement: shorter lifespans, fewer sets and special effects, fewer episodes per series – and then little margin for error if shows look like they're failing early on.
Netflix cannot scale back. Its viewers pay for it outright and express their displeasure by canceling subscriptions, not by changing the channel. If anything, its executives are spending more: Baz Luhrmann's 1970s New York period piece, The Get Down, came with a record price tag for a service that had already driven up the cost of new scripts: $120m for 12 episodes, according to Variety.
In short, television content is expensive. With fewer people watching, the advertisers are getting fed up with paying the premiums the television networks ask for, and people aren't willing to pay the real price required for good television content. Unless something changes soon, expect cheaper television shows with shorter seasons and lots of product placements within the shows.
(Score: 3, Informative) by VLM on Tuesday October 18 2016, @12:47PM
https://en.wikipedia.org/wiki/World_Series_television_ratings [wikipedia.org]
1978 world series viewers in the 45 millions range out of 220 million, well over 20% of the population watched world series games in those days. More than a fifth of the people in the USA watched or listened to world series games! Now sure 4/5 didn't, but 1/5 of the population doing anything is amazing.
2015 viewers were low tens of millions, lets say 13 million out of 319 million, thats about 4%.
If you figure they're losing 10M viewers per decade, what does that say about pro baseball in the mid 2020s? How about those billion dollar corporate welfare stadiums that are supposed to pay for themselves via TV contacts? What kind of TV contract does a sport with 1M viewers get (think, world badminton championship, or Frisbee golf)?
If you're bored and want a good time try images.google.com and search for major league baseball fan age and in recent decades the age of the average fan has gone up about five years for every four calendar years. And the average is nearing retirement. Baseball is a sport for people just slightly younger than boomers.
Now it'll never die as a sport as long as there's parks, kids, balls, and bats. For a long time there will be pay per view like wrestling. But pro sports can and is mostly going away...
(Score: 0) by Anonymous Coward on Tuesday October 18 2016, @01:56PM
Baseball is killing itself in my household because they've moved almost all of the games to cable. I've cut the cord a couple of years ago and the only annoyance I have is with sports coverage. All of the playoff games have been on cable, and I won't get to see a game until the World Series, which I presume will be OTA. College football still has its Saturdays, but all the post season bowl games are on cable except for a few after New Years. NFL still has its normal coverage; they're just adding games on cable, although they've moved Monday Night Football to cable. The NBA is largely like baseball.
All throughout the Olympics and on Saturday afternoons with college football, all you hear is "watch the games for free on any device". What they don't mention is that it is free only if you pay for cable, because you need to log in using your cable TV login. That's not free. I don't understand the rationale for that either. I would gladly stream sporting events and view the ads they serve you. It would be expanding their viewer base by bringing in those who don't have cable.
(Score: 1, Insightful) by Anonymous Coward on Tuesday October 18 2016, @03:26PM
Here's their rationale. Take the Big Ten Network in my part of the country for example. I watch a fair amount of college football and basketball as an alumni of a Big Ten University. If my cable or satellite package (before I cut the cord) did not carry this network I would miss 50% or more of the games I care about, so I would switch to another carrier. If the Big Ten Network (BTN) can charge Comcast, Dish, and DirecTV $1* per subscriber for this channel, not only do they get my money, they get a bunch of people who never watch the network. I'm guessing for every person who tunes in to every game for their school, there are 10-20 people that never turn on that station.
* I don't have the actual costs per subscriber or % of viewers, but the principal is the same.
The sad part is I would gladly pay a couple dollars a month to stream this network certain seasons out of the year. Instead I have to borrow the login of a friend who has yet to cut the cord so I can stream games on my roku. Maybe if the number of cord cutters reaches a significant number (maybe 20-30% of the population) they will realize they are missing on a large pool of potential customers and offer a true steaming option. However, they are resisting because of all the non-viewers that are paying into their cable package. Once sports start allowing streaming only independent of pay TV, the curd cutting will accelerate dramatically. For the Big Ten Network to get the same revenue from Comcast, they might need to raise rates because there are fewer subscribers (which could cause more people to leave). The networks, cable TV and satellite providers know this, and are trying to push this date as far down the road as they can. IMHO the expensive prices sports networks can demand from cable and satellite is a bubble, and it's time is nearing the end. The only question is how long it will take to burst.
(Score: 0) by Anonymous Coward on Tuesday October 18 2016, @07:38PM
I still don't understand why they require a login. The only thing it brings them is the metadata tracking so that they know who is watching what and when. Is that worth more than showing ads to people who don't log in?
Though your example with the BTN works for your case, I think it is a mistake for these networks to get into the subscription streaming business. Right now CBS and the other OTA networks have streaming services that cost on par with Netflix. But any of these networks individually don't have a sufficient library that I would want to subscribe to them directly, and there's a small limit to the number of streaming providers that I will sign up with because you quickly end up paying per month the same or more that you'd be paying for a cable subscription. I think they are better off making deals with network-agnostic streaming services where I can go look at a broad library of content rather than a bunch of individual narrower content that I have to pay for separately.
We also need more Netflixes. They are heading down the HBO or MTV paths where they stray from what made them good and popular and moving into self-generated material.
(Score: 2) by Phoenix666 on Wednesday October 19 2016, @09:39AM
Yeah, well meanwhile we have kids who have never seen sports on TV and will never because the sports leagues are recalcitrant. Fine, guys, whatever. There are infinitely more useful, productive, and fun things to do with a weekend than watching sports on a screen.
The same principle applies to content companies like disney. They are so greedy about not allowing their shows on netflix and amazon that no kid in a cord-cutting household has ever seen a disney program. As such they don't know who mickey mouse or donald duck are and have formed no emotional attachments to those characters. Thus they don't pester their parents to buy them toys, t-shirts, or other merchandise, and will never beg to go to disney world. In short, their short-term thinking has doomed their long-term prospects.
Somebody needs to walk up and smack the NFL, MLB, NBA, and others with a massive cluestick or they're done. Especially since taking your kids to one of their live games is financially out of reach when tickets are >$100 each.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Tuesday October 18 2016, @06:11PM
TV has the exact same problem as music.
With music you have to compete with every greatest hit every made and decades worth of other material.
The cost to make 1 new item is going up yet the other stuff is a fixed sunk cost. However, the value of the new item is not necessarily more than the old items. If I have 5 things and add one to it I probably add decent amount of value. If I have 1 billion things and add one item I add value but relatively tiny small amount but the cost could be huge. Movies and TV have the exact same problem. We are now at a point where we can ~90% recreate all of our TV and movie history for the past 100 years. That is a huge catalog of stuff to compete against.
What does that have to do with your point? It is the same thing. Basically it is a dilution of value. When there were 3 channels to pick from you watched that. Now you have 500+, and the internet, and movies, and dvds, and whatever. Entertainment options over the past 30 years have exploded. Why sit through a football game that should take at most an hour and instead takes 4 because of commercial breaks and talking heads. When instead I could watch an explosion fest like star wars 7. Or DVR it and then bash through it in 45 mins but then start to realize that the game is actually technically kinda boring if your not playing it.