TV 2.0

Henry Blodget makes a pretty compelling case for the imminent demise of the TV business model and the shift to internet delivered content. I’ve written posts on this topic from a producers perspective, and I agree that the Network and Cable TV conglomerates will soon be crushed under their own weight and forced to reorganize, much like the news paper industry right now. I also agree that the choke points of content will be released, creating a web delivered plethora of niche content from millions of channels. But Mr. Blodget’s implication that these millions of channels will be filled with quality content like Battlestar Galactica and The Sopranos is a misconception.

• The existing, bloated TV business model already can’t sustain these kinds of shows. The production values are too expensive, and the talent too demanding. That’s why the networks have spent the last 10 years retraining viewers how to watch low production value reality shows. If the value of TV advertising continues to fall from its current premium level, shows with high end production values will become rare.

• When the cable TV providers are gone, the business of distributing video content through the internet will be handled by aggregators. Aggregators don’t discriminate between good or bad, relevant or irrelevant. The aggregator gathers content into a database and offers the possibility of distribution based on demand. They don’t market, promote or add value to content in any way. It will be up to the content producers to monetize their content by creating strong niche brands, building a direct relationship between the brand and the consumer, and translating that relationship into a financial transaction. Producers who master this process will be successful regardless of the production value of their content, and production values will become less important as a barometer of entertainment value.

• Battlestar Galactica is a great show, but NBC Universal spent many millions of dollars marketing and advertising the brand over a period of years. It remains to be seen if that kind of marketing will be sustainable in the revised business model of content distribution, and if its possible to recoup $1,000,000 of production expense per episode without this kind of world wide marketing campaign. Hulu is successful because its filled with high quality content produced by conglomerates who spent millions marketing those shows. Who will be willing to spend a million per episode on a series that is launched on Hulu, or Netflix streaming, or X-box Live?

• Most current TV content is reality, how-to, magazine shows, news, and so forth, and that’s the content that will boom when the aggregators take hold of the delivery pipeline and the producer’s profit margins are driven down. When the professional producers abandon the long tail video market for more profitable ventures, the production void will be filled by consumer-producers with affordable, accessible video production tools.