Changing Viewing Habits in the New Media Age
Share
APEX Insight: As viewers subscribe to all-you-can-watch, on-demand, ad-free platforms, traditional media channels will have to change their tune to keep up with consumer expectations.
Hollywood has had a love-hate relationship with technology since the advent of “talkies” in the late-1920s. While the entertainment industry as a whole has weathered massive format and content delivery system changes over the past century, a huge part of that success is owed to the fact that, at almost every turn, the industry has controlled how and when said content is made available to consumers.
But in today’s à la carte digital landscape, where practically every song, book, movie or TV show you ever wanted to hear, read or watch is available anytime of the day or night at the swipe of a fingertip online, one has to wonder how much longer the traditional Hollywood distribution model can hold sway. Especially after the drumming the industry took recently on Wall Street where weak earnings reports dragged the sector into the worst two-day loss since 2008.
Simply put, if cord-cutters and millennials are paying for content, they want to control when and how they enjoy it.
While it’s easy to blame online streaming services like Netflix, Hulu and Amazon for the massive audience erosion of late, the real problem isn’t that these services are better or cheaper than cable TV – although most streaming subscriptions are a fraction of the cost of traditional cable – but that they are just more fundamentally in tune with the changing viewing habits of today’s audiences. Simply put, if cord-cutters and millennials are paying for content, they want to control when and how they enjoy it. And when you’re dealing with a generation that came of age with the iPod, DVRs and YouTube, how can you blame them?
“The Internet isn’t going away, and one simple truth of the modern world is that you either adapt to its existence or you die.” says Barrett Garese, CEO of The Horizon Factory, a startup that helps creatives build and publish their own streaming video on-demand or streaming media applications for a range of platforms. A former talent agent who helped launch United Talent Agency’s new media division in 2006, Garese suggests that Hollywood’s reliance on an antiquated business model is one of the key factors driving the audience exodus of the past decade. “I think much of traditional entertainment is suffering from a delusion that things will get back to ‘normal’ soon, ‘normal’ being 1995.”
Hollywood’s reliance on an antiquated business model is one of the key factors driving the audience exodus of the past decade.
“The very simple reality is that much of the modern entertainment business is based on a very artificial scarcity – of time, of product and of distribution. For TV, you had to be in the right place at the right time on the right channel to be entertained. For film, you needed to be in the right building at the right time and pay money for the privilege – later on, any viewing on your own time required a shiny disc,” says Garese.
“DVR exposed the artificial scarcity of time, allowing you to watch on your own schedule and not on the broadcast schedule. Piracy exposed the artificial scarcity of distribution … that something was not available legally wasn’t because it technologically couldn’t be, but because someone had decided that their business model demanded it not be,” he adds. “YouTube exposed the artificial scarcity of product, showing that there was more ‘entertainment’ than just the traditional media product. So audiences looked around at each of these elements over the last 15 years and noticed the artificiality. More importantly, they also noticed that there were methods to efficiently bypass that artificial scarcity,” and, Garese says, they simply shifted gears accordingly.
“Media companies are often asking their audiences to ignore a better consumer experience in favor of supporting a poorer consumer experience, and their audiences are ignoring them in return,” explains Garese. “I’m not sure what they expected, but playing the blame game won’t solve the problem, making a better experience will.” Key in enhancing that experience, notes Garese, is changing the industry’s business model from the ground up.
“I’m obviously biased here given my company’s product, but I think shifting from all-in no matter what you watch [cable] to à la carte subscriptions for channels and even for shows, is the best model for entertainment moving forward,” explains Garese.
“If ad-free, on-demand, all-you-can-watch content becomes the norm, relying on partners who also happen to be content-producing competitors is a very bad idea.” – Barrett Garese, The Horizon Factory
“Either way, I think it’s in the best interest of TV entities to take better control of their on-demand distribution and go directly to audiences themselves instead of leaving it in the hands of their ‘frenemies’ at Amazon, Netflix, et al. to figure out.” Garese says. “If ad-free, on-demand, all-you-can-watch content becomes the norm, relying on partners who also happen to be content-producing competitors is a very bad idea.”
Although traditional networks and cable channels may not like it and will probably not be spearheading the movement, Garese predicts that the switch from channels to apps over the next few years will present a massive opportunity for smaller companies. Particularly those looking to become huge media companies by courting their audience on already familiar entertainment devices like smartphones, tablets, and TVs.
“In the next 18 months we’re going to see some new companies [come] out of nowhere to have millions of subscribers paying monthly subscriptions, but really they’re just [meeting] their audiences’ expectations with an entertaining product. Some of them will be brands that previously spent their dollars on ads or show sponsorship, but now spend it on making content and building an audience.” And at the end of the day, suggests Garese, the real winners will be viewers who will have even more original content to chose from than ever.