The end of “free” TV could be coming to an end. I have talked on the blog about the evolution of television and internet and the necessity for the merger of these two entities for broadcasting to be successful. I imagine the future being more of a selection than being told what to watch. People to a certain extent like choice – they don’t like being told what to watch.
I think we’ll see a model based something like iTunes or “On Demand” where you can purchase shows that you want to watch. This could be a draw back in one regard – what if you don’t know what you want to watch? You have the luxury now of flipping through hundreds of channels to see what piques your interest.
HOW TV GETS MONEY$
Advertising is an important element of the broadcasting. Today it’s the main source of income. The recession has hit all of us hard and television is no different. Advertisers are being pushed further and further and now broadcasters are looking to new ways to get money.
Networks (CBS,NBC,ABC,FOX) distribute shows to network affiliates. Affiliates are privately owned stations which networks distribute and pay affiliates to broadcast their programming. By law affiliates are sporadically spread across the country to provide local news coverage and programming from the networks. Networks pay affiliates to broadcast their programming. Over the past couple of years we have noticed a trend; audiences are shrinking and funds for affiliates are virtually nothing.
NEW PAYMENT MODEL
There is no denying the fact that television is suffering greatly. You also notice that low budget shows are taking front stage. Reality shows are cheaper for networks to produce because they don’t have to pay for actors to produce the show.
Since advertising is low where else are these companies going to pick up lost revenues? The consumer.
It’s important to remember how technology is changing the playing field for broadcasters. DVRS for example allow users to record shows and watch them at any time they wish. This is a step toward the future – however, people can skip through the commercials and just watch their shows. So what’s the point of having advertising? Advertisers realize this and are more reluctant to put their ad and pay the money the networks are asking for.
Cable TV operates slightly differently. Cable gains some revenue from advertising but it also gains revenue from subscriptions. This added subscription element is helping cable stay afloat somewhat better than the local networks. This is why some like Rupert Murdoch is suggesting that we charge for programming.
WHAT DOES THIS MEAN FOR YOU?
In simple terms it means that you may have to pay for programming on your local television stations. So shows like 24, American Idol, Amazing Race, Flash Forward could all be affected.
The dilemma for consumer is – is programming on television worth paying for? Would you pay more for your cable bill for the programming on television today? Lastly, if would you pay more money if you knew you would get better programming?
