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Tag Archives: streaming

TV is in trouble. DVRs like TiVo neuter the efficacy of advertisements on broadcast outlets and the internet is threatening the subscription model that supports cable. Marketplaces like iTunes and Apple TV are becoming increasingly attractive to consumers who question the value of paying for access to hundreds of channels that they don’t watch. And, despite experimenting with streaming services like Hulu, content providers are getting cold feet now that technology has migrated from the computer screen to the TV itself.

Cable stalwarts like Mark Cuban argue that internet-based al a cart services, like those provided by iTunes, Hulu and Boxee will not be able to compete with cable in terms of price. Cuban believes that the current prices that are charged to purchase commercial-free TV shows are artificially low because the business model is subsidized by revenue from cable subscriptions. Take away the cable TV business, he says, and suddenly the internet becomes a lot more expensive and less attractive to consumers.

The problem can be summed up like this: The internet doesn’t seem to be as profitable as traditional TV, but traditional TV is starting to wither. This is a lot like the problem newspapers face, it’s just earlier in the process. What to do?

In earlier posts, I’ve argued that the answer lies in getting creative. Thinking about this tonight, I was trying to imagine the ideal TV setup for me as a consumer. Trying to imagine how it would all work, not just for me, but for the advertisers as well. The following is just part of the system I imagined, and I’ve not heard this proposed before. So, in the spirit of creativity, I offer the following idea to the industry:

The Consumer Directed Content Pricing Model

Here’s how it works. I have a set-top box, let’s say an Apple TV. With this devise I can do all the stuff I can currently do with my Apple TV: purchase or rent TV episodes and movies, download podcasts etc. But, when watching a program, I have options about how to pay. As shown in the following mock-up, the interface provides me a slider that lets me set the price I’m going to pay to purchase the program.

dreamtv1

I could choose to pay the full price of $12.99 to download and keep the program comercial free as a can on the current Apple TV. Or, I could opt to pay nothing, and get the program with a full complement of commercial breaks. The viewing experience would be much like watching the show on broadcast television in this case, except I can time shift it and watch it as many times as I want (as with a DVR). Unlike a DVR, I would be forced to let the commercials run in their entirety, much the way HULU requires on their website. Alternatively I could move the slider to some mid-point between the two extremes. This would allow me to pay a modest price in exhange for fewer commercials. 

dreamtv2

The more I’m willing to pay, the fewer commercials I’ll get and the shorter the running time will be. 

Now, to make this practical, the ads should not be part of the video download. Just meta-data that marks the insert points for them in the timeline of the program. When a commercial break occurs, the ads are streamed in from the web. That way, advertisers can insert timely ads into a viewing, even if the consumer purchased the program some time ago.

As a consumer, I like this, because it gives me flexibility and control to watch what I want, whenever I want, and pay whatever I think is fair. As an advertiser, I like this because I get all the benefits of the traditional broadcast ad model, avoid the pitfalls of DVRs, and can target my ads to viewers based on the psychographic profile generated by my viewing habits. 

The only folks this model cuts out is the broadcast network. They’re screwed. I’m sure cable providers will hate it to, since they’re determined to be involved in my content decisions. But, hopefully, they will embrace the inevitability of their utility status, and focus on providing us consumers the most excellent dumb pipe screaming fast internet connectivity possible. 

Does this model solve the problem? I’m sure it’s not that simple, but this is the sort of creative thinking that I’m not seeing from most of the players in the industry. One notable exception is Boxee, a company which at the moment seems more interested in improving the Apple TV device than Apple does.

There are other things that I want from TV as a consumer, but I’ll save those ideas for future posts.

UPDATE: Since writing this, I found this post that describes a similar idea. Cool.

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