Commentary

Old-Line Pay TV Channels: Model For Digital Video Platforms Of The Future?

by Wayne Friedman , Staff Writer, January 16, 2009

Cable television's pay TV networks almost seem like an anachronism in the digital age.

For years, those networks focused on theatrical films, and, later, first-run dramas and comedies. Their longtime attraction: all programs came advertising-free.

The digital video age for TV networks began about three years ago, with iTunes offering shows sans commercials, but with a typical $1.99 per episode charge. This seemed seemed somewhat familiar in the world of pay TV cable programming -- a monthly fee for programming and no advertising. HBO and Showtime might have been energized that their long-time model was coming to your personal computer.

But the digital world moved on, and advertising-supported shows -- with no fee to users -- became the real growth business model online. Now, the question remains: How can pay channels compete with the rest of the digital world?

The answer is, from smartly written and/or unusual programming -- shows that probably could not attract a financial supporting contingent of mainstream advertisers. Can you see HBO's "In Treatment," or "The Wire," or Showtime's "The L Word" or "Weeds" with big mainstream TV advertisers attached? Not anytime soon.

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TV advertisers are currently struggling with how to connect with original Web content these days -- specifically because of the risqué content. In that regard, perhaps pay TV is on the right track. Focus on the best content available -- with less regard for commercials interests, and more for the stories producers and writes want to tell.

At the recent Television Critics Association tour, Showtime executives said the channel's subscribers are up to 16.5 million homes -- a growth of one million subscribers, with much of that hike coming because of its interesting TV shows. This is a switch from the previous glacial pace of growth in the pay channels category. Showtime had fewer than 10 million subscribers back in the late '80s/early '90s.

But now, considering the growing audience fragmentation of the entire video world -- traditional, analog and new digital platforms -- perhaps pay TV channels are in vogue again.

Great TV shows with a small core of loyal audiences. Isn't that what Internet video sites want from their Web-only TV series?

2 comments about "Old-Line Pay TV Channels: Model For Digital Video Platforms Of The Future? ".

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T Y from Freelance Producer / DP, January 16, 2009 at 1:14 p.m.
Great column, Wayne.
It's content not the delivery medium that is important. I mostly watch the various HBO series and a little Comedy Central.
NBC reportedly is dumping their 10pm line-up. If they dump the original Law & Order I will only be watching 1 NBC program -- The Office. It seems like they are using the Big 3 automakers' death spiral of providing lower quality to save money followed by an exodus of customers.
Having recently bought a couple of Showtime programs on DVD coupled with my HBO, I have very little need for broadcast networks. Internet TV doesn't seem feasible for my use right now. Personally, I'd rather see an internet program with commercials than pay for them.
Reply

Douglas Ferguson from College of Charleston, January 17, 2009 at 10:52 a.m.

The pay TV channels will always be safe, as long as they program under the "gratuitous bad behavior" model. We pretend the acting or scripts are better, but it's the titillation factor that brings the viewers into the tent. Ooh, look, people doing things you can't do regular TV, please let me pay more to see that.