Commentary
TV Networks Need To Be On Every Platform
- by Wayne Friedman , Staff Writer, October 24, 2017
What do you do when your retail distribution point isn’t growing -- or worse, headed in the other direction? Go more digital -- and perhaps strike some good entertainment licensing arrangements.
Big toymaker Hasbro estimates revenues for its crucial fourth-quarter period will be down, largely due to the Toys ‘R” Us recent filing for Chapter 11 bankruptcy. The company’s CFO is now expecting revenues to be up 4% to 7% -- much lower than Wall Street analysts' estimates of 11%.
Hasbro, like other big toymaker Mattel, has other distribution points: Wal-Mart, Target, online retailer Amazon and other ecommerce sites. Still, physical stores are a major piece of the puzzle when selling physical products.
When it comes to TV networks, there are easier ways to shift your product line -- especially when it comes to all things entertainment, which can be digitally delivered.
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That is why TV networks need to be in the digital space, with as many variations as possible. TV executives say: “We need to be everywhere our viewers are.”
All of this is true. But more importantly, they need to be everywhere without knowing what specific platform might command the greatest share of the program/network viewership in, say, five years from now.
Networks need to create their own suite of individual TV network apps -- CBS All Access and HBO Now, for example -- as well as to find ways to be part of older traditional pay TV providers’ new digital packages, such as Dish Network’s Sling TV or DirecTV Now.
They also need to be on new, promising digital TV platforms that have had no relationship with traditional pay TV providers: YouTube TV, PlayStation Vue, or Hulu with Live TV.
Whether you are a consumer product manufacturer for toys or a consumer entertainment producer of TV shows, finding a big mix of diverse retail distribution points seems to be more important right now than finding the right mix.
For its part, Hasbro continues to perform well in sales overall. Ironically, this is because it makes major licensing deals for big entertainment movie/TV brands, including Walt Disney’s “Star Wars” franchise and Marvel’s “Transformers” brand.
Play on.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
I'm sure that the broadcast TV networks as well as cable programmers realize that they should be able to garner audiences from every platform that might augment their "linear TV" base. That's the way things are heading. However, what is not so clear is whether these extensions into the digital arena will carry the same ads as were sold to "linear TV" advertisers in the same epidoses, thereby being counted as part of the guaranteed audience deals made by the linear sellers or whether some of this extended digital exposure will have ad time sold separately, using digita ltargeting methods and different metrics. The answer is probably both types of extensions will be tried as well as ad-free approaches, mainly with "original" content. It will be interesting to see how this develops.
Audiences don't want networks. They don't want ABC, NBC, CBS, HBO etc. They want the specific shows and movies that interest them, regardless of the source. And frankly, they don't even want Netflix, Amazon or Hulu. The main complaint about streaming now is that content is getting scattered all over the place behind obnoxious paywalls and there's too much of it. Result: consumer inertia and inaction. This will benefit just the very few largest services but create a very high cutoff bar for success. Netflix, Amazon and Disney will be above the cutoff, but CBS All Access may be below. Hulu's fate depends on how fast they go global. It amazes me that everyone hasn't yet figured out that global is a vital part of this equation. How can you hope to do what Netflix is doing, spending $8 billion a year on content, without tapping into an enormous global audience? Even with the global audience, it's not certain this business model will work (likely - for the very biggest - but not certain).
Digital advertising will be dominated by Facebook and YouTube while Netflix and Amazon go in a different direction - ad-free. (Amazon is a unique case, they are ad-supported in a sense, it's just that they have only one advertiser: Amazon. Their video efforts are aimed at getting more customers for their real business of selling and shipping goods.) Facebook and YouTube can create the short, stupid, viral video content that attracts the under-35 eyeballs the advertisers are after, and can't find on broadcast anymore. Once they figure out how to keep ads from running next to ISIS training videos and racist rants, Facebook and YouTube are more than capable of hoovering up whole advertising budgets on their own, with their billions of eyeballs. Even Netflix's 109 million subscribers looks puny by comparison and Netflix sensibly is staying far away from the toxic realm of advertising.
nerd rage, you make an interesting point about the average viewer caring mostly about a given program but not so much about the channel---which is often the case when a single program or a few shows are involved. However, this is also a sweeping generalization, especially when you say that there are too many shows out there. The most common complaint about TV---anti commercial barbs, excepted----is that "there's nothing good to watch"; moreover, with 200+ channels competing for viewers 24/7 it takles a lot of content to fill all of that time. The plain fact is that most people are unaware that most shows even exist. If you dont believe that take a look at the TVQ "familiarity" findings for hundreds of nationally-aired programs. Usually 80% of the respondents have never even seen the average show---even once---ever..
Returning to your basic point about channels vs programs, I assume that you will concede that this does not necessarily apply for thematic channels such as The Weather Channel or CNN or Fox News or The Food Network or ESPN. But what about other channels which the viewer knows turn out a lot of content---daytime, early AM, sports, news, primetime entertainment, late night variety, specials of all types, political interviews, etc. some of which may be of interest---like a broadcast TV network or a cable channel such as A&E, Discovery, and many others. If a true a la carte channel subscription system was actually in place without bundling, and the average person could afford to subscribe to only 15-17 or them, I believe that many channels which offer a wide variety of content as well as local news, as is the case with the broadcast TV networks, would be almost automatic choices along with quite a few basic cable channels---primarily because of the breadth of their content and its constant updating as the seasons pass---even though the particular channel, itself, means relatively little to the consumer as a brand name. So, yes, I agree that viewers care much more about specific programs than the channels that convey them but, at the same time, they recognize that many channels are like supermarkets, providing a wide variety of options. Dare they lose out on something they want to see---or might like to see---by not subscribing to such a channel? Unfortunately we seem to be stuck with bundling disguised as more affordable "skinny" packages so we may never know.