With the growing selection and popularity of Web venues like Hulu, stations should be worrying about the eventual dilution or loss of first-run programming from network affiliates. While that may be a ways off, now is when the affils should demand that every new affiliation agreement gives them the inviolable right to the first showing of every program the networks produce.
In a column on the eve of the NAB convention, I tried to reassure TV broadcasters that that they had seen the worse and that, with new revenue on its way from the Web, retrans and mobile, their business would rebound as it has after similar recessions in the past — at least one more time.
Still believe all that.
But there is one thing that I didn’t mention in that column that sometimes challenges my optimism.
It’s Web TV or broadband video — the distribution of movies, TV shows and sundry video clips on the Web.
It seems that every single day, the variety, ease of use and quality of Web TV gets that much better. I’m not the only one who has noticed. People are flocking to Hulu.com and other video-laden sites to watch their favorite shows whenever they want.
It’s the Big Six multimedia companies that are driving the phenomenon, even though they haven’t figure how to make money from it. NBC Universal, ABC/Disney, News Corp., CBS, Time Warner and Viacom are all putting their best stuff on the Web, after giving it first runs on their broadcast or cable networks.
NBCU, News Corp. and now ABC/Disney are partners in the popular Hulu and none would be surprised if the others eventually come on board. (At what point do the trustbusters in Washington take notice, I wonder.)
What’s more, the major networks owned by the Big Six also have individual sites where viewers can go to cherry pick the best TV has to offer.
There are also a handful of independent aggregation sites like Joost and Veoh, but how they will be able to compete with sites owned by their principal content suppliers is beyond me. Ultimately, they can only be as big as the Big Six allow them to be.
No doubt about it: The Web is now a bona fide TV distribution system that will impact TV stations just as cable did starting in the 1970s — and probably not in a good way.
As Web consultant Will Richmond points out in his Executive Session Q&A this week, local broadcasters should be worried about the seeing the best of the broadcast networks’ primetime offerings on the Web, often within a day of their initial broadcast airings. The Web distribution will take away viewers and, in broadcasting, viewers equal revenue.
One of our guest commentators this week, former TV station GM Kevin Mirek, made the point that Web TV is still tough to watch: “Internet viewing is still hung up in small screens, pixelization, downloading time agony, out-of-synch audio/video and poor picture quality.”
Some truth there, but I have to disagree. Right now, the quality is good enough for recorded shows, certainly as good as watching conventional TV on a CRT, which most Americans still do. I occasionally watch baseball live at MLB.com. The quality is not great, but, as long as the Pirates are winning, I’m OK with it.
And does anybody not think the medium is going to improve? I’ve been closely watching Web video for at least 10 years and am amazed at how far it has come. Web TV is a function of bandwidth to the home (it’s getting wider and faster) and video compression and players (they’re getting better). Richmond believes large-screen HD from the Web is on the way.
Web TV will really come into its own when it makes the leap from the desktop to the living room and that day is getting closer and closer. All the major set manufacturers are promising big-screen TVs that connect to the Web with helpful video interfaces and Richmond says there are a bunch of boxes — TiVo, Roku, Blu-ray players and game platforms — that can also bridge the Web and the TV.
Hulu has been resisting third-party efforts to make the service more presentable and easier to use on the big screen.But as if to show the world just how horribly conflicted it is, Hulu also just introduced Hulu Desktop, a downloadable program that turns your computer monitor into a fully functional TV set for watching Hulu. It promises a “lean-back viewing experience” with DVR-like controls and remote control.
So, all I have to do to watch Hulu from the sofa this weekend is download Hulu Desktop to my wireless laptop, plug it into my 50-inch HD set and go out and buy a remote. It’s not a mass-market solution, but it’s a start.
The Internet has yet to spawn much high-quality original programming with broad appeal — certainly nothing to compare to what’s available on the broadcast and cable networks.
But top-quality made-for-Web programming is inevitable, too, isn’t it? I sit on the board that hands out the prestigious Peabody awards for excellence in electronic media. This year, among the three dozen winners from broadcasting and cable was the Onion News Network, a Web-only service that spoofs media and popular culture with a hilarious stream of video clips worthy of any TV network. It was a real milestone in the history of the Web. Check it out.
The Web will produce more programming that will break out to take its place alongside the best of traditional TV. If you don’t believe it, that’s fine. A lot of people in the early 1980s didn’t believe that cable would ever amount to much more than a rerun platform for movies and broadcast TV shows.
The broadcast networks reassure their affiliates that they need not worry when they see The Office, Bones and House on the Web. Viewership is small and the Web plays help to promote shows and keep viewers up to date on series.
And TV stations can take comfort in the fact that so far the Web is attracting relatively small audiences and generating only a tickle of revenue from mostly 15-second spots. The Big Six media executives who are creating the parallel TV universe on the Web readily concede that the revenue from the Web exposure of their shows is just a small fraction of what they get from the broadcast and cable.
But I wouldn’t get too comfortable. At some point the Internet TVs will reach a critical mass and significant numbers of viewer will begin bypassing traditional TV and go straight to the Web. Revenue will follow, and stations will struggle against even more competition.
Affiliates should just assume that that is going to happen. To protect themselves, they should insist in every affiliation agreement they sign from here on out that they will have the inviolable right to the first showing of every program the networks produce. They can fulfill the same role that theaters do in the movie business.
It’s not exclusivity. But it’s always good to be first.