Streaming Video as TV game-changer

Much has been written to the effect that Netflix original programming threatens to be a home viewing game-changer. That much may be true. Yet when it comes to TV, game-changing is par for the course.

Television began life as a game-changer. It fast grew from novelty to necessity. In the U.S., a model quickly emerged where networks produced higher-end programming, local stations produced sundry lower-end offerings, and advertisers paid for the whole thing.

Now, thanks to the interactive media, that’s all up in the air.

In my parents’ day, a television market (or ADI, for Area of Dominant Influence) with more than three VHF stations was really something. Less cool were UHF stations, which required you to endure fuzzy pictures and sound, develop a taste for tired reruns, and attach a funky circular or butterfly-shaped antenna to the standard VHF antenna, fondly referred to as “rabbit ears.” A game-changing switch from analog to digital obviated rabbit ears, bringing with it higher resolution, still rued by viewers who prefer not seeing the details of a news anchor’s every pore.

Cable and, later, satellite technology changed the way TV signals found their way into homes. The game changed again with the likes of VCRs, DVRs, and TiVo, which freed us from network schedules so we could watch when we darn well pleased. In turn, that changed the game for viewer-tracking companies like Nielsen. And, to the consternation of advertisers, these technologies freed us to zip past commercials. Pay-per-view and, later, streaming upped the ante by relieving us of even having to record.

Streaming and pay-per-view also changed video rental. Why trudge to the video store and risk returning with a DVD scratched beyond use when you can stay home and stream? Almost overnight, giants Hollywood and Blockbuster found themselves sitting on costly, superfluous real estate and inventory. As I write, cloud-based video purchasing capability threatens the DVD industry itself.

But in the most recent game, Netflix, whose streaming model once limited members to expired TV series and films no longer in theaters, has begun dabbling in original programming. They hope that people will want to see the likes of House of Cards or, if rumor pays out, new installments of Arrested Development badly enough to subscribe, and will then elect to remain subscribers. This represents a direct challenge to the cable/satellite model, where people subscribe to an overabundance of stations at a much bigger price tag solely to watch games on ESPN or to find out what fate awaits Dexter Morgan.

Since the Netflix model has no need—yet—for advertising, look for more game changing in the advertising arena. You will likely see an increase in product placement activity, and not a few network and station reps running around looking terrified.

As they say in the biz, stay tuned.

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