How can you sell a TV network while keeping its streaming part? Only by accepting a very low price, given the way the market is thinking right now. It’s foolish that Disney with all of its evergreen assets and resources should have a 30% drop in stock price. Undoubtedly that plummet is controlled by bears who seek to benefit themselves by acquiring the “old fashioned” parts of Disney television.
No one, including those who own linear television networks, sees anything but a bleak future for linear. You TV networks and MVPDs should have listened to me in the 90s, today television would be programmatic, addressable, interactive with ROI measurement built in, and digital would never have bounced back so high from its turn of the century bubble, nor would the dollars have shifted to digital out of television, digital would have come out of promotion budgets rather than media budgets.
However, it’s not too late. By thinking smarter, television stocks can arise again. First of all, in the context of the future, what is television?
Television is the part of media where you commit yourself to specific periods of time to immerse yourself in a lean-back way where you don’t need to do any work. You get entertained, informed, you feel emotions, it’s pretty to watch and sometimes you get so caught up it’s like living through a character other than yourself whom you identify with.
Digital is the lean-forward part of media where your eye-hand coordination is in action all the time. You get entertained, informed and the novelty reward system in your brain and glands peak over and over again continuously, dopamine and maybe even oxytocin making you feel good, all because the brain is programmed to prefer novelty i.e. something new every minute or every few seconds.
Videogames are another lean-forward part of media where your eye-hand coordination is even more intense than in digital. You are much more the actor than the audience in this media type. Virtual Reality will grow out of this media type. When VR comes along in a big way today’s head-mounted units will first shrink to special glasses and finally to an almost weightless tiara-like unit on your head with direct neuro linkage. Haptic suits will provide a sense of touch to the whole body. Some television shows will become VR interactive as illustrated in this fictional chapter from an upcoming novel of mine in the Agents of Cosmic Intelligence series.
Even with today’s videogames this media type has a large share of audience. Nielsen measures videogame usage as part of measuring everything, and reports that videogames among males 18-24 peaked at a 30% share of audience in Q4 2018 on a 24/7 basis (currently still high at 20%).
My point is that these three forms of media usage are not going to go away, one of them is not going to eliminate the other two entirely. Even as new generations come along who are even more attracted to high touch high tech, there will be times when these new people will simply want to be able to lean back and take off the cognitive load to a degree that isn’t offered by the lean-forward media types.
The fact that the lean-back medium is going to be digitally delivered and called streaming makes not a whit of difference. There will always be television, the lean-back screen media type.
Why is the streaming conversion hurting television stock prices and revenue growth? Because the main audience of streaming is young, energetic, fickle, price sensitive, wants to be “with it” and wants to try all possible experiences, so except when you have a series that resonates, they watch the medium without much program loyalty.
When a person cuts the cord and shifts to fluent streaming usage, the traditional TV networks are going to lose a certain amount of that person’s time. This is one aspect of what is going on right now.
The solution is to make better programs that are irresistible to the largest possible audience. Yes that means larger investments. However the success rate can be radically improved by more intelligent use of pretesting (human and AI) and more intelligent use of tune-in.
The other major aspect of why streaming is hurting traditional television at the moment is because the decision was made to cut the commercial load in streaming down to 5 minutes per hour, from about 14 minutes.
The best way to deal with this is to offer tiered streaming choices with free ad-supported at full linear TV commercial load, low monthly subscription fee plus 5 minutes per hour commercial loads and commercial-free at a higher subscription price.
Getting the pricing/packaging right, and also leveraging on-camera talent (think Influentials) and production quality to beat the digital video players at their own games with services like YouTube or TikTok that are just as free but more glamorous and enticing, making the product better and the tune-in better by applying science and AI…these are the prescriptions to making it through these hard times turning the great ship in the water. Once you get to this other course, the sailing will be much smoother. Half or whatever proportion of leisure time will be lean back and television stock will be riding high for the rest of history.
AI is involved in all of these processes of improvement which are needed to ensure better television programs with more effective tune-in. The television czars have never been particularly drawn to science, math and technology. They come out of the cinema tradition which is seat of the pants auteurism uber alles. If they had been a bit more oriented to science, they would have invented digital and everything would be different, this was what Next Century Media was attempting to bring about in the 90s.
Five companies have each grown to dwarf the television companies because they embraced science, technology, math and are now among the leaders in AI. Apple was the first. Now they are known as the FAANGs: Meta is the “F” for Facebook, Apple, Amazon, Netflix and Google (aka Alphabet), and there are others like Microsoft, Ali Baba, TikTok, et al.
If the television companies continue to think last century, the science and AI driven companies will take over lean back too.
It’s not too late. Hollywood, Bollywood, Pinewood, Cinecitta, Huace, and all of you making television and cinema what it is, you are among the greatest creators of art in history, it’s time to bring in much more of the science part now, or others who do, will supplant you.
Posted at MediaVillage through the Thought Leadership self-publishing platform.
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.