Thursday 5 February 2015

Unboxing broadband, part 4: Now TV is back in the box

Even though we’ve culled Now TV from the herd of under-TV boxes, I’m still feeling hopeful for quality TV viewing. blog.mindrocketnow.com

We’ve put away the Now TV box. It is no longer a companion in our evenings. We realised that for the last few weeks, we hadn’t used it, preferring the Amazon Fire TV box instead. Why? - No Game of Thrones until April.

It’s not that there’s nothing else to watch on Now TV, just that most things that we want to watch are also on Amazon Fire TV, and the Now TV exclusive content isn’t something that’s better than the Amazon Fire TV exclusive content. Analysing this thought process, it turns out that we classify our content into four tiers:

  • Exclusive content that is reason enough to subscribe to a service
  • Exclusive content that can be easily replaced with exclusive content from another service
  • Content that we own (bought or recorded)
  • Programmes that happen to be on when we switch the TV on

If we re-order this list in the order of what we watch the most, it’s:

  1. Exclusive content that is reason enough to subscribe to an IPTV service
  2. Programmes that happen to be on when we switch the TV on - generally Freeview
  3. Exclusive content that can be easily replaced with exclusive content from another service - terrestrial or IPTV
  4. Content that we own (bought or recorded) - PVR or blu-rays

Original content was the way cable grew up, taking eyeballs and awards from the network channels to the likes of HBO and AMC. It’s therefore natural that IPTV services would try the same trick to take viewers from cable to Netflix and Now TV. However, the proliferation of services mean that there’s a fragmentation of exclusive content. No one service has everything, and the number of services you have to subscribe to in order to get to is getting quite high. Let’s assume we’re just interested in TV in HD, not interested in owning anything, and only UK-legal stuff (no dodgy VPN to see Hulu). To be able to watch everything we’d need to subscribe to:

  • Netflix (£72 p.a.)
  • Now TV (£84 p.a.)
  • Amazon Prime (£79 p.a.)
  • Total = £235

We’d still be missing out on exclusive content on non-subscription services where you pay by the box set, e.g. Playstation Plus, BlinkBox, Wuakai TV...

In this fragmented world, it costs a lot to be exhaustive. What’s more, the low cost of cancelling a service (contracts only last a month) encourages the diametric opposite behaviour, to be selective and only buy what you want at the time that you want it. Services are having to grapple with the new problem of how to embrace churn into their product design.

So from the programmer’s perspective, exclusivity of content is becoming a difficult attribute to master. Get the right “event TV", and people will find the monthly fee a small price to pay. Get less compelling content and people will take advantage of the low cost to change, and move on to the next service. Get content that isn’t compelling to investors, and the whole studio will go out of business, as was the case with Microsoft Studios for Xbox originals.

Knowing how hard it is, why is it that everybody seems to be producing original content? Netflix has made Marvel Daredevil (really want to watch that), and even Sony is making Powers for Playstation Plus.

The answer lies in the long tail. Not every TV show needs to be as popular as the Internet-breaking Game of Thrones, because IPTV providers do not need to offer the same thing to everyone. The beauty of being able to have a one-to-one relationship with your audience is that as long as you provide each individual their compelling content, they will use your service.

The trick then is to make a programme that fulfils enough of these one-to-one relationships to carry the service. To do this, the programmer needs to understand their audience. Netflix famously did so by applying analytics, figuring out that their target audience liked Kevin Spacey and David Fincher, so paired them to create the House of Cards. Amazon is currently gauging audience reaction to a number of pilots; rather than TV executives deciding their fate, audience numbers (and analytics on what they also watch) will decide in which pilot to invest further.

It feels like the nature of TV away from the networks is changing: from the biggest shows, to the most high quality shows; from only populist shows to quality shows; from a few good shows, to many good shows. We might just be in a golden age of television.