I was lucky enough to spend some time at Swarthmore College last week thanks to a kind invitation from the Swarthmore Feminists to talk about sexuality and television, but the real treat for me was a chance to sit and chat with the students there about what television they watch, and how they watch it. Keeping in mind, of course, that this is hardly a representative sample size, that college students aren’t at the height of their purchasing power, and that it isn’t always easy to set up cable subscriptions on campus, it was still a revealing conversation, and one that did more to convince me than cord-cutting numbers have thus far that television could face a comparatively sudden realignment of its business model as a generation of television watchers comes of age, and turns out not to watch television live, in the timeslot, or through the conventional means of accessing television programming at all. I was struck by three key takeaways in particular:

1. If They Own Television Sets, It’s Mostly For Gaming: I didn’t really develop the habits of a television viewer until I’d graduated from college and had access to cable for the first time, but even then, I owned a television, and my sense was that most rooms had one, if only to watch DVDs. DVD drives didn’t come standard on laptops at the time I purchased my first one, tablets were a theoretical product, and streaming video wasn’t a commercial-ready product that could support long clips and heavy usage. Now, with all of those things standard, televisions are less a primary means of watching video content than large objects that take up space in a single or a common room. If you’re serious about video games, they might be a necessity. But all the Swarthmore students I talked to were building their habits as television viewers through their interactions with Netflix and Hulu, rather than with channel surfing. And that means a very different, and much more highly curated user experience. Television watching is a habit as much as it is an optimal consumer experience, and if it’s not developed early, there’s no reason to believe it will remain primary.

2. They Don’t Feel Any Real Hesitation About Pirating Content On Either Moral Or Quality Grounds: Only one of the students I talked to said she avoided watching content that had been illicitly downloaded on moral grounds, and she admitted that her refusal to watch movies or television that hadn’t been paid for or borrowed in some licit way marked her as something of a square. The consensus seemed to be that television networks and studios don’t really need the students’ money, that someone else is putting up the money to support the continued production of content. I obviously think that’s a fairly shortsighted perspective, but it’s illustrative of how deeply it’s taken hold as a convenient excuse for not purchasing content.

3. They Don’t Care When They See Whole Seasons, Much Less Individual Episodes: This was probably the consensus opinion that hit me hardest: the students were very comfortable with watching not just episodes of television but whole seasons of television long after they’d aired. Neither the prospect of so-called spoilers, nor the desire to engage in a cultural conversation tied temporally to air dates seemed to matter very much. And that seems like it should scare television producers more than anything else. If there’s no such thing as must-see-TV, whether it’s the old expectation that viewers wouldn’t see every episode of their favorite shows, or the modern one where it’s expected that we’ll tune in to every episode of long-arc narratives, then it’s hard to see what the television business model is at all.

I’m always up for modernizing Nielsen ratings, but this new measurement the organization is rolling out isn’t exactly what I was looking for:

Nielsen Twitter TV Rating will measure the total audience for social TV activity, including participants and users who are exposed to the activity. According to Nielsen, this will provide the “precise size of the audience and effect of social TV to TV programming.”

“The Nielsen Twitter TV Rating is a significant step forward for the industry, particularly as programmers develop increasingly captivating live TV and new second-screen experiences, and advertisers create integrated ad campaigns that combine paid and earned media,” Steve Hasker, president of global media products and advertiser solutions at Nielsen, said in a statement. “As a media measurement leader we recognize that Twitter is the preeminent source of real-time television engagement data.”

According to Nielsen, the Twitter TV Rating will serve to complement Nielsen’s existing TV ratings. The tool is described as “giving TV networks and advertisers the real-time metrics required to understand TV audience social activity.”

I get that networks want to see what kind of buzz their shows are generating. But it’s a measure of real-time engagement, which is the same measurement that’s been rendered so much less useful by the rise of DVRs and high-quality, legal streaming sites. And as anyone who has been dismayed by the gap between, say, the volume of Twitter conversation about a cult sitcom like Community and the actual ratings for that show, I think it would ultimately be much more useful to the survival of beloved but low-rated programs to measure the real viewership of those programs more comprehensively. To incorporate more data, Nielsen would have to trust self-reporting from legal streaming services like Hulu, and would have to work out windows for those reports to be delivered and combined with DVR data. But it would be much more useful for networks, and for those of us who love shows where we fear enthusiasm for them isn’t being captured by the current ratings system, especially those like the CW with younger audiences who are watching more television streaming and on mobile devices, to be able to sell package ad deals across platforms, than to know what people talk about Twitter on any given night.

As Deadline notes, there’s a huge untapped potential to get more viewers watching streaming programming:

The research firm says that in September, 3.1M unique users streamed TV Everywhere programming at AT&T, Cox, Comcast (Xfinity), Verizon, Cablevision (Optimum), Time Warner Cable, and Dish Network. That comes to just 5.1% of the roughly 60M customers who could have accessed TV Everywhere videos at those companies. The data suggest “relatively weak TV Everywhere awareness among cable, DBS and telco video subs, most likely due to the lack of any serious marketing campaigns to promote the product,” analyst Tony Lenoir says. It also means the services have a long way to go to catch up to other streaming video providers. For example, Hulu had 21.3M unique users in September, while Netflix had 16.2M.

I actually think this could be a critical way to get customers to be quite loyal to cable. The streaming landscape is a deeply confusing place right now: on Hulu alone, NBC puts up everything the day after it airs, Fox delays episodes unless you’re a Hulu plus subscriber, and CBS holds everything on its own site, which has an unbelievably terrible proprietary streaming player. Then, there’s HBO GO, which is a stand-alone service to HBO subscribers, but that is slightly unreliable. And Showtime is working with cable providers to have Showtime Anytime service work through their streaming players. Netflix gets new seasons of things at uneven rates. That’s confusing even for an obsessive consumer like me. If RCN developed a streaming service that made all content available on a consistent basis, with extremely high-quality visuals and fast-loading streaming, that alone would make me affirmatively loyal to the company for the first time in my career as an adult cable consumer. And I bet it would be a real value ad for people who don’t spend ten hours a day watching television and movies.

In January at the Television Critics Association press tour, Hulu, the service set up by the broadcast networks to provide streaming content supported by advertising and subscriptions, announced its first original slate of scripted and reality content. Yesterday, they were back with announcements that Hulu will air the new seasons of the popular British shows Misfits, about a group of unlikely superpowered teenagers on probation, and Armando Iannucci’s scabrous political comedy The Thick of It on the same day and date that they air in the UK, and a panel promoting its airing of the Israeli drama, Prisoners of War, that is the basis for Showtime’s critical and commercial hit Homeland. The news that American audiences won’t have to wait to see these shows through a legitimate channel—and that Hulu won’t be bleeping the profuse and wildly creative profanity that is a hallmark of The Thick of It—is the useful, practical news out of Hulu’s session. But these shows herald something even more important: Hulu’s found some of the tools that are starting to define its competitive advantage as something other than a subsidiary of the networks that created it.

The time lags between when shows air in their home countries and when they arrive everywhere else has is one of the major frustrations of engaged television viewers who hear about programming they’re desperate to at least sample, but have no legitimate way of acquiring for months, years, or even at all. Even when Netflix makes it possible for viewers to catch up on past seasons of a show, viewers may come up against even greater gaps between the episodes they can finish and the time when new ones are available. Hulu, which doesn’t have to worry about slotting something into a narrow number of programming slots, is ideally suited to do what networks can’t and Netflix has yet to pursue: get viewers caught up on programming they love and transition them smoothly into the experience of watching along with an international audience they may already be in conversation with.

Similarly, in signing up Prisoners of War, Hulu’s committed to an arena of programming that broadcast networks have essentially removed from consideration: subtitled programming. And it’s done so with the source material for one of the most buzzed-about shows on television. It’s a move to claim a new space, and in particular, one important to dedicated, smart viewers who, because they have to read the subtitles, will be keeping their eyes closely focused on the screen, something that has to make Hulu’s advertisers very happy. In a conversation after the panel, Hulu’s senior vice president for content, Andy Forssell said that the company has been trying to close deals on more international shows, including some deals to bring Danish programming to the U.S. that didn’t quite work out. But if those shows fail to find other homes on proper U.S. networks even as the Scandanavian noir trend continues with the news that FX is planning a remake of Danish/Swedish co-production The Bridge, Prisoners of War could give Hulu the track record to be best positioned to close those deals in the future.

Hulu isn’t giving up on original content, Forssell emphasized. He plans to make more episodes of Battleground, Hulu’s political show, which Forssell told me and The AV Club’s Todd VanDerWerff was one of the 25 most-viewed shows on Hulu when it was rolling out new episodes. He said he has ambitions to do smarter programs aimed at teenage girls and is looking to target under-served audiences, including African-American viewers. And Hulu will try to keep its productions lean, operating much like Israeli productions or the 10-90 deals networks like TBS and FX have set with Tyler Perry and Charlie Sheen, where actors shoot large blocks of scenes together and out of narrative order to minimize time and money on locations and to make sure they work more consecutive days.

It may take time for the network to find a mix of content and creators that make Hulu truly competitive. Forssell declined to release specific ratings figures, arguing that they were a distraction from the strategy Hulu wants to pursue of giving shows multiple seasons to mature and time to find their audiences beyond a specific ratings period. But he said that Hulu’s best-performing proprietary shows were attracting audiences roughly the size of basic cable broadcasts for each episode, and maintaining roughly two thirds of that audience for the full length of each stream. But its content acquisitions and partnerships should give Hulu time to flesh out its original content strategy, test strategies and business models to increase legitimate audiences for piracy-vulnerable shows, compete with BBC America and PBS for sophisticated audiences with a taste for international programming.

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.

There’s been a lot of discussion over the past couple of days about why HBO hasn’t made its content more widely available to non-cable subscribers. While I understand individual consumers are frustrated, I think we need to reckon with the fact that this is not a problem of a single premium network. It’s a limitation of an ecosystem that also happens to have produced the kind of environment where HBO can make the content that makes it so desirable.

Erik Kain started the current wave of this, first blaming HBO for piracy, then, arguing that HBO should offer HBO GO as a standalone service and that the company would make more from those subscriptions than from its current arrangement from cable companies, and eventually backing off for some of the reasons I’ll articulate. But it’s important to reiterate that a stand-alone service is not a minor change . There are major forces at work here, and both HBO and we would do well to be attentive to them.

First, I agree with Yglesias that commentators, particularly those of us who cover entertainment technology, tend to dramatically overrate the extent to which cord-cutting is actually happening and to which consumers want to and are dropping their cable in favor of streaming services. Even if broadband gets cheaper and broadband adoption gets more serious, that doesn’t mean that people are going to prefer streaming services to cable. As I wrote earlier this week, people are dropping cable subscriptions, but not yet in a way that indicates a cultural shift rather than a tough economy. The cable companies aren’t wilfully ignoring overwhelmingly compelling evidence. They’re waiting out a trend to see if it’s real. And until sports in particular, a much bigger driver of cable subscriptions than the premium networks, get unbundled from cable, I’m just not sure we’re going to see huge, permanent accelerations in this trend, particularly if use of streaming services like Hulu gets tied to authentication of a cable subscription or a tacked-on fee.

Second, waiting that out isn’t evidence of idiocy or a desire to do harm to consumers (though it’s a mystery to me why folks who consume content assume entertainment companies’ main purpose is to be nice to them rather than to make money). HBO and other premium cable channels have a very solid and established business model here. Cable subscriptions overall may be dropping, but HBO added 190,000 subscribers in the fourth quarter of last year, the biggest growth the network’s experienced since 2006. Folks may not like paying for bundled cable, but there isn’t actually compelling evidence that HBO in particular rather than cable companies in general should be worried about cord cutting.

And though Erik suggested that it would be easy for HBO to make up lost revenue by charging more for HBO subscriptions, I think he dramatically understated the difficulty and unpredictability of that move. It’s not just that “HBO has deals with cable companies that may make this move difficult, and quite possibly very expensive.” It’s that there is no way the cable companies would let this go quietly. At all. As Todd VanDerWerff put it:
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When the Hollywood Reporter noted yesterday that My Damn Channel, an online television network, had unveiled a slate full of original content, it clarified a major problem with web television for me. While YouTube’s channels, like Felicia Day’s Geek & Sundry, will aggregate some similar tranches of web programming, so many of the best shows live off in their own isolated spaces, word of them traveling by word of mouth. I’d watch vastly more web television shows if there was a single place I could find a lot of them, sorted by topic, or theme, or programmed into something approaching harmony. And I wonder why, in their pushes into original programming, Hulu, Netflix, and Amazon haven’t focused more on true web television and less on an arms race with networks that have an enormous advantage over them in production and advertising budgets (Google is, to be fair, spending $200 million advertising its YouTube channels) and savvy.

Much of what these online content providers seem to be doing so far is feeding off scraps or trying to capture old magic. When Terra Nova was cancelled, there were rumors Netflix might pick it up even though it was immediately and obviously a terrible proposition. Its remake of House of Cards, helmed by David Fincher, lacks a creative rationale and is a hugely expensive attempt to purchase the kind of credibility that so many British shows arrive in the states armored in. The Arrested Development reboot is about satisfying an old core audience rather than building a new one. This is a defensive strategy rather than an offensive one. Hulu’s been trying to play offense, but its new shows have no built-in audience unless you count Morgan Spurlock diehards.

Acquiring or distributing existing web TV franchises would be a more modest first step, but it makes sense for a lot of reasons. First, it would be a lower-cost way to bring existing fans of a program to Netflix, Hulu, or Amazon’s streaming site, and in a way that has the potential to be sticky if people jump from a show they already like to one they aren’t familiar with. Second, and this is important, web series offer the potential to catch audience growth on the upswing, rather than the downswing. While this isn’t true for all web series, shows like Jane Espenson’s Husbands can work as individual episodes or, watched all together, as a test pilot. Web shows could be a way for Hulu, Netflix, or Amazon to grow an initial audience and figure out which shows are their best investment bets to level up to full series, and then allocate their production and advertising budgets to shows and showrunners with proven track records in this format.

This is a more modest, less fast way to compete with the networks. But ultimately, it’s hard to believe that the streaming services will truly be able to match network content. They’re viable precisely because people want to pay less for content, and so the streaming services’ best bet is not to try to stretch those dollars threadbare, but to use them to build something entirely different. Google seems to get this. Everyone else? Not so much yet.

As I noted in my post about this on Tuesday, CBS has been the most reluctant of the four major networks to put episodes of its shows online. Unlike ABC, NBC, and Fox, neither CBS nor any of its corporate affiliates owns a stake in Hulu. The network puts relatively few of its shows on the streaming service, and when it does, the video quality is significantly lower than that of their competitors. In some cases, it doesn’t put certain hits online at all: 2 Broke Girls started out with full episodes available on Hulu, then full episodes were available only on CBS’s website, and now the network only makes clip shows available. The episodes aren’t even available on iTunes (though you can pick up a game based on the main characters). If you’re not watching the show on your television screen, you’re not watching it.

But could that change if Hulu, as has been discussed, moves towards a system that would require users to authenticate that they subscribe to a cable service in order to stream shows (whether it would preserve a pay alternative like Hulu Plus is an open question). Les Moonves told the Hollywood Reporter that he’d reassess doing business with Hulu if the company moved to an authentication system.

It makes sense that CBS would be the network most reluctant to experiment with online content. Like all networks, CBS has had some dips in ratings this spring, but unlike NBC, which is almost being forced into niche programming against its will, CBS still has huge mass-market hits like NCIS, Two and a Half Men, 2 Broke Girls, and The Big Bang Theory. CBS isn’t scrambling to meet the needs of a fanatical audience with very precise tastes both in content and how they consume it. That doesn’t mean that the network isn’t thinking about digital—Moonves says they’re working on web-only content to be prepared for the day when that business model is financially viable. But they’re not approaching streaming episodes with a sense that they need to do so to preserve the audience they’re in danger of losing. From their perspective, authentication would give CBS the means to provide a new and improved convenience to the customers they’ve already got locked down. The question is whether they’re acting from a position of strength or poised for a crash if they’re suddenly confronted with a generation of users that wants much more flexibility in their viewing experiences.

Yesterday came the news that Fox, as part of its negotiations with Comcast, was moving toward a model that would require people who wanted to view its content online to provide proof that they were cable subscribers, likely through the same mechanism that HBO uses to grant access to its HBO GO site: using their cable provider login to sign in rather than a login for a specific service. That would mean that Hulu users who wanted to watch Fox content through Hulu would likely be subject to the same restriction, and Hulu appears to be exploring a cable verification login system more broadly.

There are a couple of things to consider here. It may be easy to forget this, but Hulu isn’t an independent company. It’s owned by Comcast, Disney, and News Corp, all of which are apparently going to take a larger stake in Hulu next week when the fourth company invested in the company sells back its 10 percent stake in Hulu to its partners. Whether that is a tipping point or not, it’s worth remembering that Hulu has never been about providing an alternative to cord-based television watching. It’s a way to keep as much revenue as possible directly in the pockets of content companies without an intermediary eating up the revenue and negotiating long-term content deals that could turn out to be less-than-desirable for the content companies. And in that context, it’s not really surprising that Hulu’s owners would want people to pay for every single bit of content they watch on the site, whether you’re paying a monthly fee for streaming or a cable bill.

That gets at the really interesting question: will Fox’s carriage agreement with Comcast exempt Hulu Plus? That would be a move that would still require people to pay for content promptly, but would acknowledge that some people are gone from cable and will never come back. Will, as TechCrunch suggests, a free, ad-supported option still exist, but with episodes going up 30 days after they air? It would be the kind of thing that would drive users like The Oatmeal insane, but that strikes me as completely reasonable, considering what a bargain Prime is, and the fact that content costs more to produce than many people feel comfortable acknowledging.

Either way, Hulu warned us what it was when it first launched:

Hulu has never been a challenge to the content companies. It’s their rearguard battalion, making sure the content industry gets money out of folks who go AWOL.

Were you planning on cutting the cord on your cable as soon as Hulu signed a few more content deals and let you watch your favorite shows the day after they aired? Think again. The New York Post reports that Fox is renegotiating its deal with Comcast in a way that would require Hulu to require users to prove that they already subscribe to cable in order to get access to its content. The authentication system would likely work the same way: users would log in to Hulu with their cable company logins, rather than with a Hulu ID. Fox is already somewhat more restrictive about its content than the other major networks (with the exception of CBS, which puts almost none of its content on Hulu and declines to stream many episodes at all). Currently, you have to have Hulu Plus to stream Fox shows the day after they air. Otherwise, you have to wait a full week to watch the shows supported only by ads.

It makes sense that now is the time Fox would strike. Hulu (and Netflix as well) are early in their efforts to create original content. And while those companies say publicly that their original shows are meeting their expectations, they haven’t been precisely clear about what those expectations were, or whether that means they’re even close to garnering network-level (or even cable-style) audiences for that programming. They’re nowhere near close to telling the television networks to shove it, so Fox is striking in what it sees as one of a few remaining moments of opportunity, especially because it wants to make sure it can retain the cash to pay its retransmission fees. The cable companies need to hang on to their subscribers both to ensure their own profits, and to meet their own outside demands. Until retransmission fees are out of the equation, it’s hard to imagine that this model is going to change dramatically.