It’s almost become a platitude to talk about television’s new golden age, with shows popping up every season that rival film in their quality of acting, directing and cinematography. But where are these shows coming from? Who foots the bill? And how are viewers consuming this deluge of Hollywood-caliber content in the era of over-the-top streaming and wireless everything?
New technology has changed the way people watch rich, complicated TV shows, but the hallowed and oft-misunderstood practice of offering consumers content bundles largely delivers the financing, while continuing to democratize the television landscape.
With retail content packages, viewers collectively subsidize the price of all channels by sometimes paying for ones that they don’t necessarily watch. If viewers were able to pick and choose, many channels would become exorbitantly expensive, while smaller networks would simply cease to exist. ESPN, for instance, would cost $20 to $25 à la carte. The overall result wouldn’t be pretty for consumers; they would likely end up paying the same or more for less content.
Channel bundling enables networks to create shows of unprecedented scale and quality, while advents like TV Everywhere and DVR give viewers the flexibility to appreciate this rich, new content on their own schedule.
TV Tent Poles
Quality shows aren’t cheap to produce. Breaking Bad reportedly cost $3 million per episode, and Game of Thrones clocks in at a staggering $6 million per episode. Some shows have viewership to match their enormous budgets, but others probably couldn’t continue without the subsidization of channel bundling. This system works in both directions – less profitable shows support the broader creative environment. For example, Rectify on SundanceTV enjoys critical acclaim, and though it’s not quite a ratings darling, producers can experiment with new forms and styles. This sense of boldness and innovation is what attracts viewers to pay for cable in the first place.
“The breakthrough content in this golden age of television is happening because the model is sturdy.”
According to John Lansing, president and CEO of the Cable and Telecommunications Association for Marketing, this distributed-cost model provides networks a strong financial base to take creative risks, which in turn attracts new viewing demographics with new consumption habits. “The breakthrough content in this golden age of television is happening because the model is sturdy in terms of giving consumers more freedom to take the content wherever they go on different devices and to enjoy it in different ways,” he said.
Between TV Everywhere, DVR and other add-ons, cable’s relationship to the consumer is no longer bound to time slots or even living rooms. With the wide range of programming available via the bundle, the challenge has become ensuring that customers get the maximum value out of their subscriptions. “I think there’s a tremendous willingness to pay for different ways of getting things,” said Mark Garner, senior vice president of distribution at A&E. “How do we expand the ability to deliver great content and deliver great technology to people who may not otherwise embrace what’s currently available to them?”
“How do we expand the ability to deliver great content and deliver great technology to people who may not otherwise embrace what’s currently available to them?”
Spreading the Word
Ironically, streaming services like Netflix are helping evangelize TV Everywhere. Despite the antagonistic relationship often painted in the media between traditional networks and unbundled subscription-based streaming services, Garner believes the two are complimentary. For one, heavy Netflix users tend to watch much more TV Everywhere than non-Netflix users. TV Everywhere also has the advantage of coming at no extra charge, while Netflix, as Lansing puts it, “is essentially a repository of re-runs off of cable at an additional price of $8 a month.” Further, Netflix depends on the popularity of cable programming, and as TV Everywhere becomes more widely adopted, this will likely begin eating into the Netflix subscriber base.
Growth for TV Everywhere is now simply a matter of spreading awareness and reaching viewers who don’t realize they already have access. According to Garner, only one in five subscribers know they can watch shows on other devices. Whatever the rate of adoption, it’s clear that the landscape is changing rapidly, at a rate measured in months rather than years. With the accelerating expansion of TV Everywhere, the experience of watching television is likely to continue evolving for the foreseeable future.