Shifting the Commerical-Based Revenue Paradigm

[Damion Chaplin]

http://www.nytimes.com/2006/05/07/business/yourmoney/07digi.html?ex=1304654400&en=776d2dbf915ec2e6&ei=5088&partner=rssnyt&emc=rss

"They will take my remote control away only when they pry it from my cold, dead hands. This thought followed my first reading of a patent application for a new kind of television set and digital video recorder recently filed by a unit of Royal Philips Electronics at the United States Patent and Trademark Office. The design appears to threaten the inalienable right to channel-surf during commercials or fast-forward through ads in programs you've taped. A second, calmer reading of the patent application revealed that the proposed design would uphold the right to avoid commercials, but only for those who paid a fee. Those disinclined to pay would be prevented from changing channels during commercials. If the viewer tried to circumvent the system by recording the program and skipping the ads during playback, the new, improved recorder would detect when a commercial segment was being displayed and disable the fast-forward button for the duration."



I had pretty much the same reaction when we reported on this new patent a few weeks back. When I told my wife about it, she totally flipped out! My wife cannot stand to watch commercials, and always goes surfing when one comes on. After reading this article, I've come to understand that the issue is deeper and more fundamental than our freedom to surf or fast-forward. At stake here is the very income of the television industry: sponsors. For example: How is the Sci-Fi Channel supposed to sell advertising time for Battlestar Galactica when it can be shown that fully half of their watchers own DVRs and that 70% of them are skipping the commercials entirely. Thus Sci-Fi gets no money to support quality shows like BSG and are stuck with reruns of Xena. Shows like BSG may even stop being made because the revenue just isn't there. Obviously, the old paradigm of feeding us 3 minutes of ads for even 7 minutes of content can't be supported in the long run. The TV industry needs to find some other way making money. Personally, I think I would rather pay a yearly subscription to the shows I actually watch than a monthly subscription to my cable provider. What about you? How would you like to see the industry make money and still provide us quality programming (and our DVRs)?

[Damion Chaplin]

http://www.nytimes.com/2006/05/07/business/yourmoney/07digi.html?ex=1304654400&en=776d2dbf915ec2e6&ei=5088&partner=rssnyt&emc=rss

"They will take my remote control away only when they pry it from my cold, dead hands. This thought followed my first reading of a patent application for a new kind of television set and digital video recorder recently filed by a unit of Royal Philips Electronics at the United States Patent and Trademark Office. The design appears to threaten the inalienable right to channel-surf during commercials or fast-forward through ads in programs you've taped. A second, calmer reading of the patent application revealed that the proposed design would uphold the right to avoid commercials, but only for those who paid a fee. Those disinclined to pay would be prevented from changing channels during commercials. If the viewer tried to circumvent the system by recording the program and skipping the ads during playback, the new, improved recorder would detect when a commercial segment was being displayed and disable the fast-forward button for the duration."



I had pretty much the same reaction when we reported on this new patent a few weeks back. When I told my wife about it, she totally flipped out! My wife cannot stand to watch commercials, and always goes surfing when one comes on. After reading this article, I've come to understand that the issue is deeper and more fundamental than our freedom to surf or fast-forward. At stake here is the very income of the television industry: sponsors. For example: How is the Sci-Fi Channel supposed to sell advertising time for Battlestar Galactica when it can be shown that fully half of their watchers own DVRs and that 70% of them are skipping the commercials entirely. Thus Sci-Fi gets no money to support quality shows like BSG and are stuck with reruns of Xena. Shows like BSG may even stop being made because the revenue just isn't there. Obviously, the old paradigm of feeding us 3 minutes of ads for even 7 minutes of content can't be supported in the long run. The TV industry needs to find some other way making money. Personally, I think I would rather pay a yearly subscription to the shows I actually watch than a monthly subscription to my cable provider. What about you? How would you like to see the industry make money and still provide us quality programming (and our DVRs)?

[Jason Eaton]

Kill the broadcast.

Seriously. Broadcast is a dead to me these days. I think what we have is a setup that can no longer adapt on multiple fronts.

The first being that it can no longer adapt to fit the needs of its users. In the early days people adapted to fit the technology limitations. You shifted your life to watch things when they were sent out. Now people are the unmoving audience demanding to have it when and where they want it.

The second being that broadcast was (and is) good in areas where there are no other transmission types. In the early days sure there was over the air and as such we also accepted that we had to play by the limitations that imposed... now we can receive the 'data/shows' in different mediums that are more flexible to the first condition.

The third failure deals with the money model. When condition one and two favored broadcast the model worked as an effective avenue. However as we shift these conditions ads become a hold over that is forced versus being necessary.

To answer the question now...

To me, the ideal situation is to kill off broadcast.Get rid of the current revenue model. Move to a delivery independent method where cost is associated with the model.

DVD method, as is. You buy a series for a set amount.

Individual, episodic, a small fee per episode downloaded at your convinence.

Sign up on something like iTunes/Netflix, pick your content and 'create' a channel that streams the shows you want like a personalized tv station. Smaller fee but you have some minor commericals. (Ad guys get to know and target exactly to you based on your prefs... good for them yada yada yada but no where near as many commercials.)

Anyhoots, just my thoughts.

[David Horn]

In the UK a lot of shows are now available on demand through cable, and (I should feel guilty about this, but I don't) on Bittorrent. I have a 10mbit internet connection and can get the newest episode of Lost in DVD quality over my breakfast on the Thursday morning.

I don't use the on-demand thing, but have a Sky+ box and of course I skip adverts. I think all that'll happen is that TV will shift to a subscription service. Apparently Sky could completely remove all the ads on their channels (we get 3 minutes worth every 15 minutes, not unbearable) and still make a profit.

I really do feel sorry for your American tv viewers, last time I was there I timed segments between adverts at roughly 5 minutes.

[sundown]

I don't know what the answer is. On one hand I hate 90% of commercials so I skip them. On the other hand, I know the current broadcast model relies on advertisers.

Perhaps more targeted ads. I skip commercials mostly because they don't apply to me. I don't want to watch a Maxipad commercial during the Simpsons (or any other time). I'm a dude and that doesn't apply to me. Cool VW commercials? Yeah, I'll watch them. New flavor of Poptarts? Cool, show me. That 70's Show reruns? Pass. Targeting may be the answer. For me anyway.

Also, I don't want to see any commercial 20 times a day. Last year I tried watching Survivor on the CBS website. It was neat to be able to do it but I had to watch a segment at a time and each time they played THE SAME STUPID FREAKING Charmin commercial. I think I had to endure it 10 times. Torturous. I may remember the brand but it pisses me off when I think about it and I don't buy Charmin.

I will say this. I don't NEED television. I like to watch some things but I don't NEED it. If I have to pay more (more than the $60 a month I pay for satellite right now) to be able to skips ads or be forced to watch commercials I don't want to see again, I'll do one of two things: 1) stop watching some of the things I watch now, 2) build my own dvr that doesn't have that limitation.

[Macguy59]

I think you'll see an expansion of product placements or in-line advertising if you will.