Monday, May 28, 2012

The entertainment equivalent of the buggy whip industry?

Dish Network recently launched its new 'Hopper' digital video recorder (DVR), which allows commercial-free viewing of recorded TV programming.  Needless to say, the major networks are apoplectic about this, as their revenue stream relies upon advertising - and if advertisers know that consumers can simply cut out their advertisements without even knowing they were there in the first place, why should they pay such high advertising prices to the networks?  Lawsuits are pending.

My concern is this.  All Dish Network has done by introducing the 'Hopper' is to acknowledge and automate what millions of DVR users are already doing, using their remote control units - skipping past the advertisements.  Therefore, instead of desperately trying to shore up, fortify and defend an old, outdated business and revenue model by fighting such modern technology, why aren't the networks looking for a new business and revenue model that will take advantage of modern technology?  They're not going to succeed in putting the genie of technology back in the bottle.  Nor are they alone in fighting a losing battle.  Publishers of books, music and other forms of entertainment are in precisely the same (sinking) boat as the TV and movie business.

Once information is digitized, it moves beyond the narrow, restrictive boundaries that publishers, distributors and networks could once place around it.  If a single electronic copy gets out, it'll be copied, duplicated, circulated, folded, spindled and mutilated before you can say 'Jack Robinson'.  Any revenue model that relies on stopping that process is doomed to failure.  Unless the networks 'go with the flow' and update their business models, they're going to become extinct, just like the buggy whip industry did when automobiles arrived.



Joe in PNG said...

There's a few ways to get people to take a look at commericals, but the best, most successful way is what they do at the Superbowl: Make commericals that are themselves worth watching.

Dirk said...

The cost of actually producing a commercial is dwarfed by the cost of getting it aired... So, yeah - make the commercials good, and people will still watch them.

But...are commercials actually, truly, having a real effect on people's buying habits? Speaking for myself, personally, the answer is no.

One alternative to commercials is even more intrusive product placement than we have today, though...:( The death of TV commercials could mean the death of "free" TV.

You do know that TV networks aren't in the business of producing entertainment, right? Their real business is delivering eyeballs to advertisers - the entertainment produced is just a means to that end.

Anonymous said...

It is the same mindset as the publishers and Apple vs. Amazon and the independents. "Things can't change because we are the gatekeepers and we say they can't change, so we will make arrangements to keep them from changing." This as readers and watchers are finding out ever more creative ways to do what WE want to do.


Dirk said...

Make the commercials worth watching, and people will watch them - either at the time they air, or on YouTube, after they hear about them. The production cost to make a bad commercial is not significantly lower than to make a good commercial. And in any case, it's the cost of getting it aired that's the expensive part.

The downside to the death of commercials is that product placement will become even more intrusive and annoying than it already is, unless some other alternative to this type of advertising comes about.

The big question, really: How effective IS advertising, to begin with? Speaking for myself, personally, advertising really doesn't have much, if any, effect on me. I do occasionally hear of a product that I was unaware of, but at this point in my life, I've tried pretty much every brand of most everything I use, and have made my decisions on what I buy. YMMV, I guess.

Dirk said...

Sorry for the double post with essentially the same commentary - normally, my posts show up fast, but near the end of my day, hadn't seen it, so I posted again.

Anonymous said...

Our library allow "checking out" PDF versions of books. My daughter wanted to read the latest book in the Hunger Games series, but the library said they had 6 PDF versions, and 30 people already in line to "check" one the wait was estimated at 8 checkout a pdf...gotta love it.