TV's Future is an Ad-Free, A-La-Carte Model
When HBO landed on the scene in the 1970s it unwittingly pioneered consumers to subscribe to premium TV programming over copper cable wires. That was unheard of back then. It's now the norm when we sign up for cable TV. We expect to be presented with several packages, including deluxe networks like ESPN, HBO or Showtime that require an additional fare. However, a new business model for TV is emerging.
It's no secret that consumers in droves are tuning out ads using TiVo or DVRs. This is forcing the networks to try all kinds of new distribution models. Though the approaches vary, they share some things in common. One, they're letting people own ad-free programming forever by selling it over the Web. Two, they're peddling this content on an a-la-carte or a subscription basis, whether it be on Google Video, Apple iTunes or starting next week on MySpace. And three, they're teasing out ad-free portions of shows for free using podcasts. Notice how many times I said "ad-free."
As the technology gets more sophisticated and the generation that grew up with the Internet , iPods and always on connections become adults, I see a day coming when a lot of TV content will a) be paid for and b) consumed ad-free.
Now, some content will always remain free and ad-supported. However, in the future - as technology progresses - you will have to pay for the best programming, even if it's carried by ABC, NBC, Fox or CBS. These shows will be sold a-la-carte, as subscriptions or in packages and they will all be delivered over the Internet protocol. Once purchased you will be able to watch these shows on any number of portable devices/phones, a computer or on your Internet-connected HDTV.
So what happens to all those advertising dollars? Good question. Stay tuned to find out, but not to your TV.
(Fine print: MySpace is an Edelman client)
UPDATE: I didn't see this before I wrote my post, but digg says Alex Beam has a similar thought.
Technorati Tags: Google Video, HBO, iTunes, MySpace
Maybe we will go back to the old days of sponsorship, "This programme is brought to you by XXX + brief slogan." Unobtrusive, and too brief to cut out + close association with programme that people like.
Or perhaps we will just have to have more creative ads that people enjoy watching.
Posted by: Bertie | Monday, May 15, 2006 at 05:53 PM
There are 3 certain things in life: Death, taxes and advertising...(M. SAACHI)
I believe that in the near future we will have a choice of either recieving the content with ads, which we chose to see from a list of brands, or we'll be able to pay extra in order to recieve ad-free content.
Posted by: Asi | Tuesday, May 16, 2006 at 03:43 AM
Thanks for reminding me why I DON'T watch TV anymore. It's all become one big advertisement portal. Even TV shows are promoting products nowadays. Back in the olden days, (gosh, am I that old already?) actors just drank out of generic soda cans and drank milk out of "MILK" cartons...Now we see actors promoting Old Navy clothing!
Posted by: Maria Palma | Tuesday, May 16, 2006 at 04:43 AM
I don't think video's future is glitzy manufactured network content at all.
I think it's C2C sales of user-generated content.
Posted by: Mike Abundo | Tuesday, May 16, 2006 at 08:48 AM
What happens when the networks begin showing next seasons shows early online to create a buzz? I recently heard that NBC would start doing this...I think in an effort to generate a buzz. The problem exists when EVERY network starts putting their shows online for first viewing, then the playing field has been leveled again. I agree that the only way to monetize this process is to launch the programs or channels totally a-la-carte.
Posted by: Eric | Tuesday, May 16, 2006 at 09:52 AM
Adam Gerber of Brightcove, at the IAB Conference "Broadband and Beyond" on Monday, predicted that a major cable channel will (in one years time) eliminate the standard "ad pod" model and move to an exclusive "brought to you by" advertiser model. Only one advertiser will participate in each show.
Just wanted to record that here so we can call him on it next year.
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anyone know what HBO has up its sleeve? heard rumors of a big launch 1Q07...
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