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Alyssa

Finding the Price Points for a New Generation of Television Technology

I think James Poniewozik is largely correct that while the networks may be upset about new technologies that let viewers skip ads, they might be better off trying to find fee structures that are responsive to new technologies:

But they want—and a good business would provide—many more ways of paying, if not with their eyeball attention to ads, then with money. (There’s the possibility, for instance, that networks could raise fees to networks like Dish that offer ad-zappers, which fees could be passed along to those who ad-zap, to replace lost ad revenue.) People want to be able to buy episodes, subscribe to shows, watch on their own schedule, and bypass ads they don’t want. In the process, the relationship of people to TV networks will change: right now, networks’ true “customers” are the advertisers, because they’re the ones who pay money.

The TV business is changing from one with a single main revenue source to one with a lot of them; the transition is bound to be painful for the networks. But quashing an option your consumers want is the wrong way to forestall that pain. You can’t pull the plug on technology forever, and if that’s your best response to change, it’s your own fault when consumers start tuning you out.

I also think this is easier in theory than in practice, and is going to take years to sort out. One important experiment will be to see how consumers respond to a Netflix or Hulu Plus pricing scheme that’s more reflective of the actual cost of supporting that content and the production of higher-quality original content. A second step will be to see how consumers behave if they’re faced with regular but reasonable hikes in the prices of those services, which are responsive to both renegotiated content contracts and rising wages and costs. I would like for it to be true that people are willing to pay for content at a cost that will support a fairly diverse array of high-quality programming, but as I’ve written before, we don’t actually have proof of a viable financial model yet, and it’s not wrong for the networks to be cautious about blowing up an existing business model in favor of optimistic projections.

We have a sense of what we’ll pay for three distinct products in this market. First, there’s what people will pay for bundled cable, both in terms of what prices will get them in the door and what prices won’t lead them to quit at the end of a first-year contract. We also have a sense of what we’ll pay for a single episode of television, because iTunes and Amazon have established that price for consumers much in the way cable companies did. And we know we’ll pay $8-$30 a month for streaming video and DVD exchange services. As consumers, I think we have little sense of the ad revenue we’d have to make up if we were to replace advertisers as networks’ customers. I’d be excited to see a good experiment in how to price out new models, but it would take serious negotiation between distributors and the networks to set one up, and it would need to include both coastal and rural consumers to account for differences in broadband penetration and avoid preference bias. If folks have ideas on how to make such an experiment work, leave them in comments. It’s time to start thinking beyond the simple idea that evolution is good and important, and start talking in greater detail about how we get there.

Alyssa

Cord Cutting Continues, But The Rate Is Slow

Nielsen’s latest figures are out, and 1.5 million households gave up their cable subscriptions in 2011. That’s not a tiny figure—it’s a 1.5 percent decline—but it’s also probably not enough to convince the cable companies that they should be running scared of alternatives, or that they should reexamine their pricing or anything else about their business model.

In fact, this is a case where the recession seems to me to be the enemy of innovation. As cutbacks go, cable is an easy and obvious thing to eliminate from your budget if times get hard. It’s a non-minor chunk of change, and you can make up a fair bit of the value around the margins or with a Netflix streaming subscription. Even if you buy a single season of a show on iTunes and parcel it out, it’s less money than a month’s subscription, and may feel like you’re spending your money in a more targeted way than you were if you splashing out for a whole cable package. Cable may be less expensive than, say, a family trip to the movies, but it is a fixed cost you can eliminate, rather than a periodic and discretionary one you can save up for as a treat.

Given all of these things, I’d imagine the cable companies view the threat to their business model as circumstantial rather than existential. If cord cutting doesn’t just continue but accelerates once the economy starts to improve dramatically rather than incrementally, and if that trend continues over several years, then they might reassess. But companies tend to feel pain that’s a spur to innovation in a lag after individual consumers feel a pinch that causes them to change their behavior.

Alyssa

Intermission

The bridge is yours.

-Ben Kingsley will be the villain in Iron Man 3. It’s a great time to be a British actor who wants to break into superhero and sci-fi franchises as a baddie.

-Adam McKay, bless him, is starting to give us Anchorman 2 details.

-The average American household is now paying $86 a month for cable.

-Chevy Chase: still angry, still with the voicemails.

-F. Gary Gray may give us an NWA biopic.

-Everything I’ve seen about Brave just makes me more excited for it:

Alyssa

Is Glenn Beck the Future of Stand-Alone TV Channels?

I may find Glenn Beck’s schtick repellent, based as it is on demonization of Beck’s perceived enemies and conspiracy theories. But six months after his Glenn Beck TV launched, it’s relatively clear that Beck’s efforts to build a stand-alone television channel have been successful: 300,000 people are paying either $9.95 per month or $99.95 per year for access to the network, which they can access on their computers, iPads and iPhones, and on their televisions through streaming players like Roku. Between subscriptions and advertising, GBTV is going to make $40 million in its first year.

It would be fascinating to know how many of these subscribers are signing up only so they can get access to content that stars Beck. Obviously, he’s the big draw for the network, but he isn’t alone—GBTV offers documentaries, a survivalist reality show, news analysis, even something called “Liberty Treehouse,” which is described as “a destination for the after school crowd that explores the whys and wherefores of the day’s news through the prism of the next generation.” In other words, it’s presenting itself as a fairly complete alternative for the small but monetizable audience—about 13 percent of those who tuned in to see Beck on Fox when he was broadcasting there—who want all of their programming through Beck’s worldview.

And I think that’ll probably be the model for stand-alone, web-based channels that get off the ground in the future. As much as folks like the idea of saving imperiled but deeply beloved shows like Community through Kickstarter-like campaigns or a subscription model, I actually wonder if a plan like that would be more likely to succeed if you packaged a show you were trying to save with some other programming. I’d pay for a standalone network that included, I don’t know, Community, The Guild, Husbands, and a couple of other shows, web-based or otherwise. Networks like Beck’s will be part of a move away from bundled cable as we know it now. But whatever we get to in the end, whether it’s a choose-your-own package kind of deal or the ability to pick from curated blocks of programming, I don’t think we’ll devolve as far as buying a single show at a time.

Alyssa

Time Warner Takes on Cord Cutting

This is…shockingly sensible:

Time Warner Cable CEO Glenn Britt may be the most prominent media exec making this important point: ”Our whole (entertainment) ecosystem should try to create affordability,” he told investors today at the Morgan Stanley Technology, Media & Telecom Conference. “A lot of the people who are living paycheck to paycheck want our product, but simply can’t afford it. Many entertainment executives are in denial about this, but it’s happening.” Big Media ignores that fact at its peril: The vast majority of the industry’s profits come from cable networks — but the chief of the No. 2 cable company says that the pay TV business “is fundamentally not growing.” Programmers and networks have ignored that: “What they’re trying to do is grow by raising prices” on companies like Time Warner Cable, Britt says. That may work for a while, but “it clearly is not sustainable.” One of his strategies to deal with that is offering TV Essentials — a low-cost package of channels that doesn’t include costly sports services led by ESPN as well as popular networks such as TNT, Comedy Central, Fox News and MSNBC. “We’re clearly moving away from one size fits all,” Britt says.

It’s not the end of bundling, but it’s an important experiment, and it’ll be fascinating to see how it works out. I always think of the opportunity to buy premium cable channels without the rest of the package as the thing that would bring in new subscribers and prevent full-on cord cutting, but maybe Bravo, USA and company would be enough to keep people hanging on. I doubt that Time Warner would release a comprehensive dataset publicly, but I would love to know how many people who are planning to leave end up deciding to stay once they’re offered TV Essentials, and how many subscribers the new service brings in.

Britt also explained that the company is experimenting with a metered-useage internet subscription plan in Texas. As irritating as we super-users might find something like this—my Netflix streaming alone would send me into penury, much less the whole blogging from home thing—this is clearly the future. We already see it on phone data plans. And most cable and internet companies are offering differential pricing on speed. Tiering in both of those areas may mean that not everyone gets the same quality of service, but if it means that some people can afford access they might not otherwise have, and we’re paying overall to maintain the network we use, that’s probably a good thing. I agree with those of you have complained about the fact that the same companies provide our cable and internet, and who think it stifles pricing and plan innovation. But these are good experiments.

Alyssa

HBO Doesn’t Mean to Inconvenience You

Much of the frustration consumers feel for media companies is based on the idea that these companies are disadvantaging consumers—and themselves—by refusing to make content available as quickly as possible and in the widest possible variety of formats. But I think Todd VanDerWeff does something valuable in explaining why, for HBO at least, the company’s careful control of access to its highest-value content is what preserves its ability to keep producing that content:

HBO, at least, has long based its model on the idea that a certain amount of people—more than 20 million of them at last check—will pay for the rights to watch the network’s highly acclaimed programming first-run. Those subscribers, in recent years, have also gotten access to the network’s HBO Go, a streaming site that contains nearly every show in HBO’s history, as well as whatever movies the network has the rights to for that period. (Numerous cable companies have made HBO Go unavailable to their subscribers, recognizing—correctly—that it probably represents the cable-less future of the network. They’re being idiots.) The network then releases its shows on DVD around a year after they initially debut…

The problem HBO (and the other premium cable channels) faces is that it’s boxed in by its need to be in bed with cable companies. The easiest solution to the problem posed in the Oatmeal cartoon is simply to make HBO Go available to anyone who wants it, for a monthly fee that would probably be slightly larger than what the monthly fee for the TV network is (to offset any costs lost from cable providers). The problem is that if the network does this, it will be seen as declaring war on the very providers who keep it coming into people’s homes. Even though it seems, to a generation raised on the Internet, like everybody watches stuff on the Internet all of the time, the vast majority of Americans still consume their entertainment on TV. Without the cable companies beaming HBO into those people’s homes, the network loses subscriber fees, which robs it of the ability to program anything beyond cheap movies.

I think folks really want to believe that if content companies were just willing to give them what they want, the alternate revenue streams would make up for the money those same companies would lose by walking away from other formats or lowering prices. But if we’re also arguing that companies shouldn’t get so upset over piracy because most of the people who are pirating things wouldn’t have paid for them in the first place, then companies may not have a lot to gain by trying to appease them. I’ve always been willing to accept that if we were, for example, to unbundle cable, that a lot of channels would die. It’s probably time for folks to acknowledge that if Hollywood moves away from its current pricing models, it will likely change the mix of things that it produces. And some of the casualties will be things that people like.

Alyssa

You Can’t Kill Cable Bundling Without the Premium Networks

It is a perpetual complaint that cable television is expensive out of proportion to its value, and that it’s expensive because cable bundling means customers are subsidizing channels that they don’t actually want to watch. That structure’s justified by the idea that it provides consumers with choices, even if they’re choices that customers are unlikely to ever make use of. The case against bundling is that even if it would kill some channels and make the remaining ones somewhat more expensive, is that it would let consumers exercise choice up front, paying for what they want in the combinations that they choose—to get BBC America, for example, without buying it with a tranche of other programs, or to get HBO without buying a bunch of other channels first.

And so I’m somewhat less optimistic about a new product called Aereo that’s being heralded as a cable-killer. The idea is that the service, which is premiering in New York in March, would let people rent a tiny antenna that would allow them to stream locally available television channels to any device they want. It’s not entirely clear whether Aereo is legal, something that one would imagine will have to be cleared up before the March 14 launch date. But even if it is legal, I wonder if it’ll actually be in a position to kill cable entirely.

The reason? Aereo’s only got the ability to get people access to the broadcast networks and local channels. It can’t unscramble cable networks. Hulu already gives folks access to the core programming on the broadcast nets, admittedly, with a day delay, and has become vastly more accessible on devices like iPads and streaming on set-top devices, so there’s already a service that’s similar, if not identical, on the market. But their lack of access to programming from some cable channels and all premium cable channels means that Hulu can’t be a complete substitute for a cable subscription. And even for folks who are willing to wait longer, Netflix isn’t either. People like their Bravo, and their ESPN, and their HBO, and their Showtime. As long as they can’t get them in a timely fashion any other way, I think people will continue to pay for cable to get access to those networks, and those shows that have a patina of high value.

Alyssa

Bill O’Reilly’s Lack of Compassion On Whitney Houston’s Death

I think Bill O’Reilly is correct that Whitney Houston is perhaps not the best example to deploy if you want to make the case that legalizing narcotics would decrease violence related to the drug trade and make it easier for addicts to get help (I happen to agree with at least a limited version of that case). But the rest of this statement doesn’t exactly count as brave truth-telling. Watch it:

There’s nothing bold, counterintuitive, or perhaps more importantly, compassionate about saying cruel things about addicts like: “Whitney Houston wanted to kill herself. Nobody takes drugs for that long if they want to stay on the planet.” I’ve been fortunate enough not to be touched directly by addiction, but it’s my understanding that the compulsion to use has little to do with a specific suicidal ideation. And of course, you can have an addiction and still love life and depending on the level of use, contribute to society. Whitney Houston’s fans know she’d struggled for years with a disease—not failed morals. Whitney’s daughter, Bobbi Kristina Brown, who O’Reilly mentioned had been hospitalized in the wake of her mother’s sudden death, is probably more aware of anyone else on the planet of what it’s like to live with her mother’s particular failed fight against addiction.

Nobody Bill O’Reilly to remind them that Houston’s addiction robbed her of many productive years of her career and was painful, embarrassing, and detrimental to her. And there’s nothing brave about blaming addicts for the societal consequences of their addictions.

Alyssa

Four Tips for Male Journalists Who Want to Discuss Women’s Health

As the debate over contraception coverage in health insurance plans offered by religious institutions to their employees rages in Washington, one cause for complaint’s been the way the Obama administration’s decision-making process has been covered. Of the 146 guests who have come on cable news shows to discuss the decision between Monday and Thursday, 91 were men. MSNBC’s Morning Joe has come under fire from Democratic congresswomen for not inviting women, other than show co-host Mika Brzezinski, who disapproved of the Obama administration’s initial policy, to appear on the program. And at Politico, Mike Allen’s presented the White House’s decision-making process as a boys-against-girls fight pitting strategy-minded male advisors against women who were tightly focused on the actual issue at hand: making sure women can get insurance-covered access to contraceptives. And since men in media seem to have so much trouble figuring out how to cover women’s health issues, it’s time to help them out with some simple advice:

1. Ask a woman on your show: This should be elementary advice, but apparently for too many cable hosts and cable bookers, it isn’t immediately evident that when women’s issues on the table, women’s experiences and expertise might be relevant. It would be nice if men, from cable pundits to researchers, were truly as invested in women’s health issues, from contraception access to breast cancer research, as women are. But that’s just not the way things are. And if you’ve never tried to decide between oral contraceptives, had an IUD put in, or figured out how to pay for either—much less studied the medical or insurance issues around contraception—it ought to be common sense to you that there are things that you—and your audience—can learn from people who have experience that you don’t.

2. Ask women what their experiences have been with health issues that are specific to their gender: Sure, there’s a fine line between asking creepy questions about women’s sex lives and their health. But if you’re interested in why women are so invested in access to contraception, or breast cancer funding (though breast cancer is not simply a women’s disease), or other women’s health issues, find a tactful way to show genuine curiosity. I’d be willing to bet most male pundits don’t have a good sense of the difference between what brand name and generic contraceptive pills cost, or how much costs to have an IUD in, or what it feels like to use either. And while you’re learning more about the emotions that motivate women in these policy debates, you may also fulfill your mission of delivering new information to your viewers or readers. I had no idea that oral contraceptives could be part of a diabetes maintenance regimen until someone wrote about it in a piece I saw linked on Twitter. New perspectives and new data often come forward hand in hand.

3. Treat women like any other interest group: There’s something very odd about the way women get treated when they’re advocating for the issues that affect them: as parochial and unable to see the strategic damage their needs might pose to the Democratic party. No one would ever suggest that that the National Federation of Independent Business is small-minded and undermining Republicans for lobbying to change IRS reporting requirements. So stop treating women, who are a core Democratic voting bloc, as if they’re short-sighted or selfish for expecting that a party they elect will be responsive to their needs.

4. Question the frameworks you’re given: It’s remarkable how many people who profess to believe that consumer choice and a vibrant marketplace are important, particularly in health insurance, are quick to forget about those preferences when someone suggests that a policy infringes upon religious liberty. Religious organizations that don’t want to have to cover contraceptives are also deeply invested in denying their female employees any information about where they could get competing coverage. That sounds a lot less like protecting religious liberty and a lot more like constricting consumer choice. Whether you agree with either of these frameworks for the debate, it’s not impressive journalism to just accept a narrative that’s handed to you by an interest group. Ask questions. Weigh realistic assessments of the impact a policy change. Then frame your own story.

Alyssa

How Long Does NBC Have to Improve? And What Identity Will It Take On?

NBC is the network that everyone seems to want to succeed. It gave us Community! And the Office! And Parks and Recreation! And while I think we all recognize that it’s extraordinarily unlikely that shows like that will ever become massive hits, it would feel more just if the network reaped some good karma down the road for doing right by the medium and taking some time out to pander to the lowest common denominator. But there isn’t really karma in business, just work and product development. And the biggest question I had coming out of NBC’s sessions at the Television Critics Association press tour are how long Bob Greenblatt will be given to turn the network around.

“The good news about NBC today is that we have new owners and they’re investing in our business not only with significant financial resources but with their patience,” Greenblatt said. “They’re providing me with everything we need at NBC entertainment to go after prime time.”

The interesting question is how long that patience lasts. Todd VanDerWerff and I were chatting about this, and he pointed out that the network’s cautiousness with The Voice, which they’re running in a normal schedule instead of oversaturating in the name of a quick ratings bump, is a good sign of a long-term game plan. And only the silliest person would have trouble with the concept that it takes a long time to turn a network around, something that effectively means changing audience expectations and consuming patterns. But NBC’s transformation is part of a tricky double-act: the network’s struggle up the ratings ladder as its head of programming learns how to run a network instead of a cable channel.

Greenblatt clearly is in the midst of an adjustment between a cable mindset and a network one. “I’m done with cable. It’s a dying business,” he joked, “And ruining the culture of America.” But there’s no question that he misses cable: he talked with surprising frequency about how sorry he was Prime Suspect hadn’t done better, and said that had it been a cable show, it “would have been picked up in the third episode and declared a hit”; and said that “if I was at Showtime, you’d be calling me a genius for launching one or two good shows in a season.”

And in the short term, NBC’s new launches actually feel very much like cable’s strengths: those that are precision-cut and diamond-honed like Smash, and then inexpensive junk like Are You There, Chelsea?, and very little in between. And in between is network television’s sweet spot. Cable is all about the stuff that you just have to pay to get access to because it’s so compelling, and the stuff that you watch because it’s there and it’s all about getting your money’s worth. Network is the stuff that’s pretty solid. The Firm feels like it ought to be that sort of pretty solid show, something mid-level and pleasant without needing to be either revolutionary in its concepts or perspectives or gorgeous in its execution. But the premise for it is so silly—does Mitch ever come back to testify against the firm? Why would he and Abby ever quit their Caribbean early retirement? What is it with this dude and Evil Law Firms?—that I worry it won’t make it over the hump. A show can be cheap and effective or cheap and cheap, and it’s easier to find the latter than the former—see:Fashion Star—but important to at least seem like you’re searching for the former.

Beyond the three-tier question, there’s the problem of the network’s identity and sense of its core demographics, because nerds isn’t going to cut it (Awake’s Kyle Killen joked at his panel that a room full of critics made up most of Community‘s fan base). At Showtime, Greenblatt developed a set of shows that I think could best be described as melancholy anti-heroes, more accessible and diverse than HBO and FX’s somewhat-scary mostly-white dudes. There’s definitely not a pattern that strong in the slate of programming he rolled out here in Pasadena.

And in terms of demographics, I suppose I’d suggest that between Smash, Bent, Are You There, Chelsea? and Fashion Star, they’re aiming for a less-wealthy version of Bravo’s smart lady contingency. When I followed up with Greenblatt about whether the network could rebuild by trying to lure demographics who have largely walked away from the networks back, he said that seeing more diversity in ensemble casts is “going to happen much faster than a black family or an Asian family show…If somebody brings me the great Asian family show or the great black family show, we’re developing some of that. I just think it’s more likely to see large ensembles with diversity.” Which I think is probably correct, though it remains unfortunate that the representative American family on television is still a majority-white one. If we’re going to be a majority minority nation in 2050 (aeons in entertainment-land), we’re going to need more shows like Rob about white folks learning to live with minorities, except not terrible. I’d love to see Future NBC do something like that.

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