LIVEdigitally

At GigaOm, a piece just ran called “It’s not about piracy, it’s about a failure to adapt” and all I can think of is how off the mark it is (and while I don’t agree with the premise, I do think it’s quite worth reading).  Here are some examples of how the industry has adapted in the past few years:

• 5 years ago, even with high speed internet, you couldn’t legally obtain *any* hollywood content streaming over the Internet.  Today you have Netflix, Redbox, Blockbuster, Amazon, Apple, VUDU, and many others doing just that.
• 5 years ago, your cable company only offered linear broadcasting.  Today, they offer huge selections of video on demand content, much of which is free.
• 5 years ago, your cable/satellite set top box was a completely locked down product.  Today, most offer programmable APIs, and have smartphone and iPad apps to control and program them directly.
• 5 years ago, your cable/satellite companies only let you watch stuff on TVs, via set top boxes.  Today, many offer TV Everywhere options streaming to your computer, phone, and iPad.  Further, some of them even offer apps to run on Smart TVs.
• 5 years ago, your Xbox was a game console.  Today it is a viable platform for end-to-end content delivery.
• 5 years ago, HBOGO could never, ever have existed.  Today it’s on a multitude of devices, and growing.

I’m not saying everything is grand and perfect and we’re all in the ultimate utopia or anything.  SOPA was a disaster, and the RIAA and hollywood lobbyists do terrible things.  It is true that getting Game of Thrones, right now, anywhere but live on HBO is impossible to do legitimately.  But I can make the same argument that getting Hunger Games outside of movie theaters is impossible to do legitimately.  Let’s face it, the amount of content you CAN get, legitimately, right now, is quite a bit.  And it’s all pretty cheap too.

As a guy who spends virtually every day talking to people out of Hollywood, device manufacturers, and cable/satellite providers, I can say with extreme confidence: these people are moving, and moving fast. They are not sitting on their laurels.  But they also aren’t abandoning their businesses and rushing to jump on board the Internet train of “everything, regardless of quality or production cost, is supposed to be free.”  There’s a great piece over on Wired today on the topic, I recommend reading it as well.

From my calculations, including the end-to-end costs of producing hardware *and* producing TV content, the TV industry alone represents well over $500 BILLION dollars.  This doesn’t include movies, music, video games, or other pieces of the puzzle.  It’s an impossibly huge amount of our economy and jobs to make and distribute the entertainment that we all enjoy for effectively meager amounts of money.

Just because we are getting used to everything we want, RIGHT NOW, doesn’t mean we are actually going to get it, RIGHT NOW.  Sometimes, as a man once said, you can’t always get what you want (when you want it).  Even my 5-year-old has that one figured out (except when it applies to chocolate).

“I’ve got it!”

“What?”

“We’ll give users points just for doing stuff they already do.  That’ll make them come back, be loyal, love us!”

“Huh?”

“Check it out.  Users will go to the stores they like, eat food they like, see the movies they like, listen to music they like.  The whole time, they’ll get points.  When they get enough points, we’ll give them a prize.”

“Oh.  What kind of prize?”

“I don’t know… how about we get a great sponsor, and then give away something awesome, like say… a Mercedez! Or maybe an iPad for a smaller reward.  Or a free vacation at a Four Seasons!”

“Let’s do it!!!”

3 months later

“I’ve got the latest sponsor!”

“Sweet, who?”

“Hyundai!”

“Oh.  Ok.  I guess that’ll fit well with last month’s Axe promo.”

3 more months later.

“Check it out – a Super 8 getaway in Sacramento!  Hello?”

So what happened here?  Seemed like a great idea at the time.  Create a simple program by which users get rewarded for the activities they already like.  It’s actually a no-brainer!

Until you apply a little game theory and a little human nature to it, that is.  Let’s play it out a little.

Prize 1, a Mercedez.  Gets lots of people excited and enticed, gets some buzz going, maybe even goes viral.  After all, who doesn’t want a sweet ride?  So the system/app/site gets loads of initial sign-ups, then users perform whatever mundane check-in/scan/picture-taking activity they are supposed to do.  Eventually, the prize is given away.  At which point, the site has a user base chock full of people.  All is well.

But then, they do a little data analysis, and find that most of the users who are playing the game/task/chore are really not of the demographic of Mercedez buyers.  New sponsors show up, eagerly, but at a slightly lesser stature.  Why?  Well, companies who would fund the giveaway of a Mercedez are trying to, for the most part, attract a demographic who might actually be able to buy one.  Instead, they reach an aspirational demographic, as well as, for lack of a better word, bottom feeders – folks who want the “free thing” whatever it might be.

I'm the king of the world. Give me a prize.

In phase 2 (figuratively speaking – it could take numerous “waves” of prize rounds for this to occur), with a lower quality item, the demographics slip worse (from a brand marketing perspective, not a judgement of people perspective).  After all, the prize moves from something highly aspirational into something accessible, likely affordable.  Which brings out the “couponeers” and everyone else who is less interested in the item per se, and just interested in winning something free.

After that, a bit of a death spiral occurs.  Prizes get shoddier, and the makeup of the game players not only slips, but becomes more highly fragmented along the way.  Eventually everything about the platform has slipped too far to recover.  And capitulation occurs.

Moral of the story: if you want to reward a user’s behavior, reward the change, not the things that stay the same.  That and if you don’t play any games whatsoever, odds are you’ll continually struggle with game theory.  Oh, that, and playing to become “mayor” is a crappy game, regardless of how you spin it.

Over the past 30 years we’ve evolved the television experience from something where everybody watched the same shows on the same channels on the same devices in the same rooms at the same time to a world where that’s almost never the case.  Today, with the exception of appointment TV, it’s such a fragmented landscape that it’s almost a challenge to find other people watching the same stuff you do.  But with all the variance in content, services, devices, location, price, etc, there’s still really only two ways people choose to watch TV.  This is a subtle, but extremely important concept to anyone in the business of changing television.

Deliberate viewing: you go to the TV with a specific piece of content in mind.  This includes live TV (“let’s watch Idol at 8pm tonight”), your DVR (“I need to watch last night’s 30 Rock”), and any VOD/OTT platform such as Comcast OnDemand, Netflix, Hulu, etc (“I’m going to watch the first season of Breaking Bad”).  We could also include a deliberate type of content in this category (“I’m going to watch a comedy” – not necessarily something you’d say out loud, but if you are in the mood for something funny, that’s a pretty deliberate concept).  I also refer to deliberate viewing as “search mode” for TV, since you will specifically search for the piece of content you want, whether by changing the channel, navigating your OnDemand menu, or going to your DVR library.

Random viewing: you go to the TV with no idea what you want to watch.  This includes simple channel surfing (“nope, next!”) as well as direct channel changing (“I wonder if anything good is on TNT now.  Maybe Shawshank or Blues Brothers??”).  It also includes browsing the OnDemand options (“I wonder if there’s anything new on Netflix?”) and even your DVR (“Maybe we recorded something we haven’t watched yet?”).  I also refer to random viewing as “browse mode” for TV, since you are just perusing lists of stuff until you find something you are content to watch.  Note the last phrasing here, as random viewing is less about the “excitement” factor of watching something deliberately, and more about the “good enough to pass the time” factor, with the potential for excitement.

Now for the cold, hard fact: any “future TV” service or product which doesn’t account for both types of TV viewing, will fail. This includes OTT services, smart TV apps, second screen apps, third screen apps, eighth screen apps, widgets, websites, gadgets, platforms, and everything else under the hood.  Again, if you cannot service both primary needs of a viewing audience, your system is a goner – unless, that is, you are specifically aiming to replace an existing component of those services (in other words – if your live TV service is designed to replace another live TV service, that’s viable, since the consumer’s ecosystem will still include whatever else it had before).

How do I back this up without cold, hard facts?  Because people don’t really change much, and TV, specifically, is not merely “another” activity up there with Angry Birds, Facebook, Pinterest, reading books, etc.  Watching TV is a very specific type of activity, one about entertainment and more importantly, escape.  Life is hard, TV lets you escape for a period of your day – why on earth would Americans spend 4-8 HOURS per day in front of it otherwise?

So if people don’t change, and people need escape (especially as they age – I’m not talking about 13 year olds here, for the most part), they need some version of deliberate and random lean back TV watching.  Could this include YouTube videos? Sure. How about an all-on demand lineup?  Doubtful.  How about a “TV is just an app” concept? Doubtful. It’s why most cord-cutting theories aren’t holding water.  It’s why #SocialTV is still mostly just a fad. It’s why most “second screen” apps are just barely gaining traction. It’s why Google TV is such a mess right now.  It’s why Apple TV is still a hobby.  Sure, these things work absolutely great for some, but absolutely don’t for most.

The future of TV involves a lot of change.  And the more things change, the more they stay the same.  Long live TV.