Part III - Why Broadcast TV Can’t Use Scripted Programming
As we can now see, because of the DVR and the C3 rating system, the only thing economically important about any ad supported TV show is how many viewers watch commercials live or within 3 days after the air date. Any show that does not incline viewers to watch live and/or within 3 days is commercially disadvantaged.
Consider two wildly successful programs - "American Idol" and "Dancing with the Stars." If you have viewed these shows, one fact is obvious - much like a football game, you really need to view these shows live or nearly live. If you watch them recorded more than a day later, you are likely to have heard the results and miss all the "shared excitement, angst, anger, and joy." And even more compelling for millions of viewers, if you watch these two shows live you get to vote! And if you watch them live, advertisers believe you are bound to "view" some of the commercials. Further, these shows require a competition show on one night and a results show on another night, adding to the ad revenue for the networks.
Also consider two of CBS' reasonably successful programs - "Survivor" and "Amazing Race." Again, much like a football game, you really need to view these shows live or nearly live. If you watch them recorded more than a day later, you are likely to have heard the results and miss all the "shared excitement, angst, anger, and joy" around the water cooler.
Scripted dramas and comedy, on the other hand, can be watched when the mood strikes. Sure, you can have an occasional "Who killed JR?" cliffhanger which created some shared angst. Ordinarily though, if you hear around the watercooler that they killed off a character in a show like "Law and Order", you might feel a bit left out, but you'll watch the episode on tape and continue to "time shift" future episodes anyway.
And so, most completely-scripted programming is likely to become severely devalued to advertisers and the networks under these circumstances.
Aware of the changes and aware that not everyone has a DVR, NBC offers full episodes of over 20 programs to be watched live through an internet connection - with ads, of course. Members of our household can watch these episodes on our 42" plasma "TV" which is really just a monitor without a tuner that connects directly to our computer and audio system.
To expand upon this, after trying out a deal with Apple to feed shows to iPods, NBC joined with Fox to create a venture called Hulu.com. Jeff Zucker, CEO of NBC-Universal said regarding the move away from Apple: "We don't want to replace the dollars we were making in the analog world with pennies on the digital side."
The Hulu web site explains what it's all about:
"We hope to provide you with the web's most comprehensive selection of premium programming across all genres and formats - television shows, feature films, clips, and more...."
"Hulu offers current primetime shows like The Office, Prison Break, Bionic Woman, House and Bones, and episodes from TV classics like Buffy the Vampire Slayer, Miami Vice, Arrested Development and more. We've also partnered with premier content owners like E! Entertainment, FUEL TV, SciFi Network and USA Networks to add to our growing collection of premium programming."
"Hulu is designed with a singular focus on providing an exceptional, online video viewing experience....
"Hulu lets you easily share your favorite videos via email or embed them on your own website. You can even choose to share the entire video or just one scene....
"Hulu lets you enjoy your favorite videos at websites where you are already spending your time online...AOL, Comcast, MSN, MySpace and Yahoo...."
Is this going to change television? Zucker recently noted that NBC.com had 50 million video streams in October, 50% higher than the previous record, in May. "It's become a small cable channel in our universe," he said. Of the Hulu venture he said it was a "superstore" while NBC.com was a "specialty shop." He indicated that the digital issue is the biggest nightmare in his job. "Nobody has figured out the economic model yet. And if we don't figure it out soon, those dollars will turn to pennies."
What did Zucker have to say about the writers strike? "It will be a real watershed event, [and we'll see] whether [viewers will] come back to scripted programming," he said. "An event like this will happen at everyone's peril." The issue for the writers is residuals on viewing of programming on the internet or downloaded through the internet.
Continue to Part IV