Sunday’s Emmy Awards brought some of TV’s biggest challenges front and center. It was filled with subtle and not-so-subtle quips and jokes about the direction TV is heading. Emcee Neil Patrick Harris summed up some of the challenges. He sang, urging viewers not to channel surf or DVR the show: “Don’t jump online cause this fine mug of mine needs a huge high def screen,” sang the star of How I Met Your Mother. (Read more about the Emmy’s here.)
As much as we hate to acknowledge that entertainment isn’t just about glitzy red carpet award shows or lavish movie premieres, when the cameras are off it’s like any other business. And in a year where we would rather rely on entertainment to distract us from the onslaught of gloomy economic news, business-related stories from content providers have been dominating the headlines. We’ve all heard about how the Internet has wreaked havoc on the newspaper and record industries. Well, the game has also changed dramatically for the television industry, as executives try to figure out how to monetize their content online while the growing popularity of TiVo and DVR technology eats into advertising revenue.
At last week’s Goldman Sachs Communicopia conference, TiVo’s CEO Tom Rogers said “Commercial avoidance is the issue that the media industry wants to avoid.” NBC Executive Jeff Zucker countered with, “We can’t put our heads in the sand and pretend that people aren’t using DVRs – and that people aren’t consuming content online… We don’t want to become the newspaper business. We don’t want to become the Record Music Business.”
A lesson can certainly be learned from the newspaper industry. The drop in advertising revenues caused huge budget cuts, depleting the funds necessary to continue proper investigative reporting. As an example, the Balco/Barry Bonds steroids story took two years and cost the San Francisco Chronicle millions of dollars to investigate. These types of stories may become a lost art. (HBO’ Real Sports Report: Woe is the Newspaper).
Similarly, as noted in the LA Times, TV’s scripted comedy and drama shows are becoming scarcer due to royalty fees and higher production costs and are being replaced by talk shows and reality programs which are much cheaper to produce.
So are we in for a steady diet of low quality, cheaper content that lacks creativity, authenticity, and most of all substance?
There is a bright side for television: Product integration may start to play a bigger role in combating the DVR’s effect on TV. NBC’s Jeff Zucker promised to make the Jay Leno Show “as TiVo proof as possible by incorporating lots of product integration.” Also, content providers are looking to reversing the flow of their content.” In a business still looking for a workable business formula – a new “windowing strategy” –taking material online and eventually sending it to television and DVD – has shown signs of offering a bright outlook.” Warner Brothers’ WB.com and Sony’s Crackle.com are already exploring windowing opportunities.
Newspapers aren’t going down without a fight either. Last week Variety announced their plans to put some of its website content behind a “pay wall” that will require a paid annual subscription.
As much as I enjoy a juicy Big Mac, I certainly wouldn’t want it for dinner every night.
