Commentary

Will Traditional TV Gamify Premium Shows To Increase Revenue?

Netflix's interactive efforts to let viewers decide different story lines of an episode for its “Black Mirror” series is an experiment about where TV networks and producers will get new monies.

While this might have little to do with TV advertising -- especially with an ad-free subscription service such as Netflix -- it could spur more interactive TV efforts on TV networks/services, which would alter TV commercials in those shows.

Some analysts believe it could lure TV consumers to make additional transactions to access interactive content. Much of this goes to the “gamification” of TV. Already video games are a monster media business, added to in recent years with real-time so-called e-sports live events.

Ad-supported TV networks continue to seek the next holy grail of TV revenue, beyond just on-demand licensing deals, or starting direct-to consumer on-demand and/or live, linear digital services.

Add in other new revenue-promising efforts, such as new premium traditional TV advertising formats -- six-second spots, higher value commercials from small episodes advertising loads, or newfangled metrics for marketers delivering specific sales outcomes from TV advertising spending.

New interactive/gaming elements -- and perhaps associate subscription fees -- could mean less reliance on advertising revenue that traditional networks have been wedded to for decades.

That said, many video services' interactive efforts allow viewers to choose between two video commercials before accessing content.

It wasn’t that long ago that the holy grail for over-the-air TV networks was getting the “dual revenue” stream cable TV networks had -- advertising revenue and carriage fees. The latter finally came in the form of retransmission fees that TV stations and broadcast networks are now benefiting from in a big way.

For those TV networks now, competitors are growing more rapidly. The growth of digital media from non-traditional TV players -- especially Google, Facebook and Amazon, in particular -- has seen nearly 20% gains.

Netflix may not be looking for any non-advertising advantage here -- or going into the game business. Instead, it intends to offer a cutting-edge entertainment consumer experience. Pure digital video services can more easily do that.

For traditional TV networks, it is still a bit more cumbersome, due to their reliance on older cable, satellite and telco technology as distributors.

No one is waiting around for anyone to catch up, so let the games begin.

1 comment about "Will Traditional TV Gamify Premium Shows To Increase Revenue?".
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  1. Ed Papazian from Media Dynamics Inc, October 4, 2018 at 9:49 a.m.

    At this point the TV networks are making virtually all of their not insignificant profits via retransmission fees and profit sharing deals with producers, not ad revenues. Yet the latter, which have been reduced to a break even proposition, probably offers the greatest potential for increasing revenues but I wonder if the networks appreciate how this can be accomplished. It's simply a matter of reconfiguring their commercial breaks on a massive basis so that advertisers who need high impact placements and are willling to pay higher CPMs for that can be accomodated---not in cautious penny packet deals involving a few breaks in a few shows, but on a sustained basis involving a considerable share of ad dollar volume. I believe that the networks could increase their total ad revenues by about 35% simply by going this route on a well planned and researched  all-in basis---but will they sieze the opportunity?

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