The Rise Of Online Video (and the Death of TV)TV is Dead

Is there any question? My wife and I were talking about how much our television watching behavior has changed in just a past few years. It came up because of a recent family trip we took, where we and our two little kids shared a suite that had only cable television. We turned on the Cartoon Network, or maybe Nickelodeon, while we arranged everything for a trip to the pool.

Within minutes, SpongeBob or whatever was playing went into commercials, and the kids freaked out. They climbed up onto the cabinet to change the channel, or demanded that Mommy or I ‘fix it.’. That was the moment it dawned on us.

At ages 3 and 4, the kids had never seen a television ad.

It’s The Stream

At home, we have the Roku box, which has competitors in Apple TV and Google TV. And we stream quite a bit of video content from Netflix, Hulu and other sites. Sure, we watch plenty of cable shows, but always after they’ve aired. We sometimes wait years, after a show has become a phenomenon or even run its course. And we’re not alone. A lot of people got into Sons of Anarchy, True Blood, or Game of Thrones only after hearing about it from friends. And we never, ever see an ad we don’t want to see. Not anymore.

To adults this is something of a major shift, but imagine being a small child today, growing up wondering, “Ad? What’s an ad?”. I’ve personally never seen a butter churn or a quill pen being used, and that would probably amaze people from the 1700s, the way it amazes me that my kids will never see a cassette tape or a typewriter except in a museum. To never experience a television ad would be a very welcome upgrade in the average standard of living, wouldn’t it?

So Wither TV?

There is no point in operating a television network or affiliates unless you can be the exclusive distributor of new content, and sell ads. In the post-original content space, networks are on an equal footing with studios, which no longer need the network for distribution. That’s why royalties alone will never cover the loss of the advertising business model. Secondly, cable providers tend to offer broadband Internet as well, which is why most people keep it whether they watch cable programming or streaming video.

There are, of course, people who argue that TV networks and cable providers are safe, for various reasons. One primary reason that TV continues to thrive, at least for now, is that sports events and ‘reality’ contest programs must be viewed pretty much in real time. But except for those, everything on television has an alternative:

  • News programs compete with websites – either their own sites, those of print publications, or digital media sites, where anyone can get today’s coverage of news, finance, sports, weather and anything else that is timely and important.
  • Network programs compete with cable shows, which offers better programming, fewer ads, and highly specialized content. It’s like an outlet mall, where shoppers shop stores that are dedicated to a product brand. The cable networks have established a practice of offering the best stuff to their subscribers.
  • Cable shows compete with movies and published programs, which are streamed as much as they are viewed on a cable channel. Practically every movie I’ve seen in the past two years has been through streaming.
  • Streaming websites have become a complementary technology, as many people are using tablets while they watch television. This could be seen in two ways: People are using social networks to discuss what they see on TV, or; this is a gateway behavior that will lead to the tablet becoming the primary viewing platform.

Today I’m at Brightcove PLAY in Boston, a conference produced by Brightcove, the leading online video platform and provider of cloud content services. Brightcove PLAY is where the leaders of the digital media industry gather to discuss the future of online video, including streaming, television programming, and delivery of content to tablets and smartphones.

The Brightcove PLAY schedule is jam-packed with discussions on using streaming technology for entertainment and marketing, as well as monetizing an online video strategy. That’s one thing that today’s television networks still have going for them – they’re still raking in the dough. Maybe that will continue in the long-term, or maybe it won’t.

There’s one thing I do know; my kids will not tolerate an ad, and that means something’s gotta give.