Every so often it's a good exercise to examine some of the core beliefs of a company or industry and call out the ones that don't make any sense. In the short run, saying out loud what a lot of people have been thinking pisses off those who are heavily invested in these now outmoded ideas, but in the long run, it's healthier for all involved to recalibrate.
TV Everywhere Wasn’t Worth The Battle. It sounded like a great idea at the time: you can take your television with you anywhere you go and watch it on your tablet or smartphone. The reality, however, shows a very limited number of use cases beyond sports and live events.
Because seriously, when are you going to have a half hour to an hour to watch live TV outside the house in a place where you have a decent 4G or WiFi connection?
It’s not like you’re going to leave your bedroom or living room to go down to Starbucks to spend an hour watching Game of Thrones. Sitting in the park may sound appealing, but anyone who’s ever tried to use an iPad outdoors knows it’s not a pleasant experience. Hotel rooms? Maybe, if you want to watch something off your DVR, but for most people, travel is a once or twice yearly event.
Commuting is the one use case that makes sense, but here again: (a) what percentage of Americans commute 30 minutes or more each way via public transportation, and (b) moving from cell tower to cell tower does not create an optimal condition for video reception. So even if you solve for B, A still makes it a niche product.
TV Everywhere does make sense inside the house for personal viewing: using the iPad as the bedroom or kitchen TV. But that’s it and it certainly doesn’t seem worth the amount of money the networks and the MVPDs have spent in legal battles over it.
Cord Plussers Are More Common Than Cord Cutters/Nevers: A Nielsen study that came out this week confirmed something I’d suspected all along: Netflix and other OTT subscription video on demand (SVOD) services are far more popular with upper income households who use them as an add-on to their existing Titanium Level pay TV packages. Let’s call this group “Cord Plussers” as they’re looking for options beyond what their cable package offers and for $8/month each, they think it’s a steal to add on Netflix and Hulu Plus.
Never mind that the success of Netflix and Hulu is a huge fumble by the MVPDs, many of whom maintain extensive VOD libraries that could compete with Netflix and who should be enabling the kind of 7 day catch-up TV you find in Europe, but who have outsourced that function (and then some) to Hulu, Amazon and Netflix-- the price of these additional services and the value add they bring is enough for people to add them without feeling the need to drop their existing pay TV service.
As for cord nevers, we’ve been through this already, but to reiterate, it’s not that surprising that certain busy, single, tech savvy 20somethings don’t feel the need for a cable subscription: at some point, as they grow older and settle down, they probably will. That, and study after study fails to find any evidence of cord cutting outside of the anecdotal evidence offered by tech bloggers.
Another recent study showed that 18-24 year olds watch an average of 5 hours of TV online each week. What's important to note is that’s not 5 hours they chose to watch TV on their laptops instead of a big screen TV, but 5 hours they carved out to watch TV online in the absence of an actual television set. People really do like watching TV.
Twitter Is Not The Future of Second Screen. This is another seemingly obvious one: most people are not on Twitter, so why do we expect Twitter to become the dominant medium for second screen?
If you’re Fox, and (to use an extremely generous figure*) 30% of your American Idol audience is on Twitter, but 100% of that same audience can take part in a second screen poll, which one are you going to go for?
It’s a win for Fox if the 30% who are on Twitter start tweeting about the poll, but it’s crucial to remember that they are just talking to each other: the 70% who are not on Twitter will never see what they're saying.
Here's the problem: Right now, Twitter has a much larger install base than any second screen app. It's also free to implement, since the only real cost is whatever "tweet about our show" promotion the network decides to run. So in Spring 2013, the numbers work in its favor. But that won't last for long: as second screen becomes more ubiquitous, the percentage of people using Twitter will be dwarfed by the number using second screen. If MVPDs and/or TV manufacturers go ahead and make second screen the primary program guide and remote control option, you're looking at close to a 100% adoption rate.
Second Screen Engagement Will Never Replace Marketing. Like it’s cousin, social media, second screen TV is really good at two things: (a) making hard core fans even more hardcore by giving them an outlet for their obsession and (b) moving casual fans up a notch by fleshing out the experience.
This does not mean every hardcore fan and every casual fan: it means just a few of them.
Because really, how many shows can you be a hardcore fan of? 3? 6? In any season, there are only a handful of shows people can fully devote their energy to. Second Screen interaction can help make sure a show remains one of those handful, but that’s it: it can’t create interest where previously there was none.
Aereo Is Not Worth Worrying About. While the networks are all up in arms about Aereo, it's worth thinking about why someone would want it: while Aereo plus Netflix may be a way to replace cable for $20/month, the resulting experience is not all that desirable. Aereo has a less than ideal UI (see my review on VideoNuze) and, like Netflix, you don't get the "always on" option - you've got to make a choice every time you use it and as this piece from Nilay Patel at The Verge points out, that creates an experience that's very different than just turning on the TV and flipping the channels.
That, and the notion that Aereo plus Netflix is a perfectly good replacement for a full cable package is debatable. Lots of people still want their MTV. And ESPN and Disney and Nick and Comedy Central. So the question remains - is it worth it?
UI and content issues aside, all Aereo offers is a very basic cable package for $8/month. There's no reason the MVPDs couldn't replicate this (and then some - throw in some cable only channels) at the same price point and drive Aereo out of business. So it's all sounding like much ado about nothing. Or much ado about retrans fees, which winds up being about nothing.
TV is the one medium that has not yet been disrupted by the digital revolution... yet. That's why it's so fascinating to watch the various pieces as the industry slowly changes and important to keep track of what's a wish and what's reality.
*Extremely generous. According to a recent Pew report, only 14% of Millennials use Twitter. And that’s use Twitter period, not "use Twitter regularly to chat about the TV show they're currently watching."
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