Kickass is gone!

@martian, you won't get an argument from me on this topic. I have been saying much the same for years.

Ultimately, television programs are expensive to produce (massively more so than music, for example). There are really two ways in which tv productions are funded:

1. Subscription fees
2. Advertisements

The latter is the traditional free-to-air model that generates a shit tun of content. A channel commissions content on their distribution platform and sells ad spots (and sometimes sponsorships) to brands that want access to the audience their show is delivering.

The former is a relatively newer model. There are two flavours here the HBO/Netflix model where they fund their content 100% on subscriber fees and the AMC/USA Network/etc. model that sees funding come from a mix of subscriber fees and ads.

In markets such as the US, if you have these services or channels, you can get the content. If you don't have HBO, you will have to wait for a period of time until that content is available elsewhere (e.g. iTunes, DVD, rebroadcast cable, etc.). If you are in somewhere outside the US (or a piece of content's home market) you will have to rely on that content being made available in a number of different ways...

iTunes
Netflix
local channels (local free to air or cable)
regional channels (pan regional broadcasters)
etc.

Currently the studios/rights holders/producers make a lot of money keeping to these traditional modes of distribution. There is a significant industry involved in licensing TV content globally. They have made efforts to stem the tide of piracy with most shows appearing on these services within 24 hours of the original US or UK broadcast (it used to be that you would have to wait a year or two before a US series would arrive in a foreign market's tv screens).

I guarantee you that there is an accountant doing the math on direct to consume access right now. That account is looking at the following:

1. How much do they make using traditional distribution models? What is the size of that audience, and who is being left untapped?
2. How possible is an OTT (over the top, such as Netflix), direct to consumer play in our territories? For example: Indonesia has a population of 250million, but shitty Internet and cable infrastructure. They get paid $x from existing distribution channels. If they were to go direct to consumer, how close can they get to $x plus the expense of running the system? As soon as the cost and revenue of going direct is greater than the exiting models, they will do it.

I think we are only a few more years away from this and services such as HBO GO are already doing it.

When that happens, it will be players like Fox and Warner Bros delivering their content to you directly for a fee.

 

Please forgive my oversimplification. It almost sounds as though:

A company has problems with items being stolen from their delivery trucks. They have to do an analysis of the cost of added security and the cost of the thefts to see if the added security is worth the additional cost.

 

I agree with Martian 110%. I'd happily pay for cable TV if they were producing content. But they aren't. They're producing advertisements. I've picked up a lot of shows from when I was a kid, mainly for nostalgia and they are about 50 minutes long for an hour show. You know what todays hour long shows run? 35 minutes. I can see it being even less than 30 minutes in a few years.
I pay $10 a month to Netflix quite happily because they are producing content, not just regular TV shows but they're doing their own quality productions. They've raised data mining to a fucking science, cause they know what people are watching. They know if people watch the first 10 minutes of a documentary and then switch to an action show or comedy.
And why do I still pirate? Cause Netflix needs to play it's copyright game in Canada for some reason. They can show me the first 2 seasons of a 5 season show, but can't show me the others, even thought they're available in the USA, for copyright reasons? I don't buy that. Star Wars is on Netflix Canada, but not on Netflix USA where it was produced. That doesn't make any kind of sense.
As far as movies go, it's starting to rank up with professional sports for insane paychecks supported by advertisements and exorbitant costs. $18 to go see a movie in the theatre. Add a Coke and popcorn and it's $25 a head. And I still have to sit through 20 minutes of advertisements at the start.
I'm a consumer, and I happily consume entertainment and I will pay for quality as long as it's delivered to me in a non-annoying way. I pay $10/month for Netflix that I can watch on my tablet or chromecast to my TV. I pay $10/month for Spotify that I can stream not just on my computer, but through my stereo amplifier to various rooms in my house and I can control it with my phone! That's content I can get behind and support. I'm happy to do that cause it's convenient. When TV gets it's head out of it's ass and starts producing content again, I'll happily pay $10 or $15 or $20 per month for it too. But I'm not going to pay $180/month for a bunch of channels that I don't watch and be inundated with advertisements on the channels that I do.

 

Be careful what you wish for.

It's one thing to complain about ads. But you have to realize the larger volume of the content you watch comes from ad funded platforms. Netflix still doesn't create anywhere near the volumes being created by ad funded content. And remember, most of their content is acquired. Remove the acquired content and they are increasingly thin on content.

HBO too doesn't produce the volume we demand.

Add to this the fact that if you had to pay each channel you wanted for the content you want, you would have to pay a shit tun more than you are now.

I will come back when I have more time to expand on this and explain the Star Wars in Canada only issue.


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I, like @martian, have a subscription to a news hosting provider. I only torrent if there's something I can't find through other means - I'll even download from YouTube before I'll use Torrents.

I also have Netflix and Hulu and Spotify and a couple of others. I'll also buy DVDs of shows and movies and digital purchases of music that I really like.

I maintain Usenet access and purchase copies of media for one reason - I like having my media offline. I grow increasingly untrustworthy if keeping myself Internet connected at all times, and I still want to be able to watch that episode of Friends or hear that one Guns n Roses song on demand if I want to.

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A few thoughts on these comments, comments that I hear all the time from various and sundry sources.

1. I pay $10/month for Spotify that I can stream not just on my computer, but through my stereo amplifier to various rooms in my house and I can control it with my phone! That's content I can get behind and support. I'm happy to do that cause it's convenient.

I agree completely that Spotify is doing a great job of getting the distribution and price point correct for most consumers. I too love Spotify and pay about $15/month so my family and I can share four accounts. The downside of Spotify is that musicians, even the top musicians, don't see a lot of upside from using this service. Spotify is making money, but the actual artists are not making even what they would have made from radio royalties. This is a concern.​

2. When TV gets it's head out of it's ass and starts producing content again, I'll happily pay $10 or $15 or $20 per month for it too. But I'm not going to pay $180/month for a bunch of channels that I don't watch and be inundated with advertisements on the channels that I do.

TV produces a lot of content. Much of what you see on Netflix is produced for free-to-air TV, or is produced for basic cable channels that use a combination of ads and subscription fees. I said this above and will say it again, if we were to rely solely on HBO, Netflix, and other similarly financed services (i.e. subscriber fees only) we would have a fraction of the content we currently enjoy. The ads most of us hate, fund the vast majority of the programs we enjoy.

As for the fact that one must take "a bunch of channels that I don't watch", there is a different sort of subsidisation happening here as well. The channels you aren't watching, are subsidising the creation of content that you do want. The subscriber fees the channel owners collect allow them to create content on the channels you do like. It seems appealing to want to only pay for the channels that you want and/or pay for the channels I want and then have no ads, but the end result will be a package of channels you want, at a much greater cost.

The TV industry is in flux (like most media industries) and this is entirely due to digital distribution. Make no mistake, we are headed increasing towards VOD (video on demand) as the delivery system of choice. Linear cable channels are on a downward trend. We will likely see a lot more direct to consumer VOD in flavours such as: SVOD (subscriber VOD like Amazon Prime Video and Netflix), VOD (like iTunes), and AVOD (advertiser VOD, like aspects of Hulu). I am not convinced that all free-to-air TV will disappear in the mid term. Access to local stories, news, sports, etc. will still live there. Mass audiences are still there (such as they are). But cable channels like History, Food Network, USA Network, MTV, etc. will like cease their linear channels in favour of curated SVOD, AVOD, or some combination of the two. I also think that major studios will serve as their own delivery platform (e.g. WarnerVOD, FoxVOD, ScrippsVOD, etc.).

What this means for consumers is a lot more payments. Payment to get access to content that you want, but likely direct from the source. You might go to Warner and pay $30 for an individual series, or take an annual subscription for $20/month, or get access to some of their library for free, if you watch the ads. In the end, to get all the content you want, you will likely end paying more than you are now.
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3. Cause Netflix needs to play it's copyright game in Canada for some reason. They can show me the first 2 seasons of a 5 season show, but can't show me the others, even thought they're available in the USA, for copyright reasons? I don't buy that. Star Wars is on Netflix Canada, but not on Netflix USA where it was produced. That doesn't make any kind of sense.

To be clear, this isn't Netflix's game. Netflix wants you to have the content now. All of it. You can see this when they are releasing shows like Riverdale one episode a week, right after it airs on the CW (at least it does in my part of the world where we don't get the CW).

The copyright issues have to do with the stake holders of the various series you want to watch. The TV channels that commission these shows, do so at great cost and the understanding that the content is exclusive to them. They trade on that exclusivity with their own subscribers and/or advertisers. The window of exclusivity means that things get held back from being available in other parts of the world. And a US broadcaster doesn't really care about Canadian consumers and their access. The studio/producer/rights holder that owns the copyright, and the distribution rights to that show does care thought. They care a lot. They want to access those consumers as quickly as possible. This is why the nature of content availability and global distribution has radically changed.

Piracy is a business model and rights holders recognise this. As such, most content is available globally within 24 hours of its release in the US. Making content available for consumers as soon as possible is in a rights holder's interest.

Which brings us to Disney and the fact that The Force Awakens is available on Netflix Canada but nowhere else in the Global Netflix network. It doesn't make sense on the surface but there is a reason. Disney has made a global deal with Netflix to carry all of their films and TV shows. Netflix has paid a license fee to Disney, that gives them permission to make Disney content available on the Netflix service. And after a certain period (theatrical release, airlines, payTV, etc.) Disney films appear on Netflix.

Disney did this new deal with Netflix about four years ago. However, and this is where this gets a bit complicated, Disney had deals in place with other platforms and services that pre-date the Disney deal.

In the USA, they had a streaming rights deal with Starz that was for all Disney films to the end of 2015. That means that any Disney films release before the end of 2015 would have to go to Starz. Any Disney's films released from Jan 1, 2016 would start to be available on Netflix in the US. Because The Force Awakens was released in December 2015, it falls into the old agreement with Starz.

In Canada, Disney's previous streaming rights agreement was with Rogers. Roger's deal expired at the end of 2014. So any Disney films from Jan 1, 2015, are available in Canada on Netflix.

To be clear, this isn't a game. This is just business. Disney did a deal to make their content available in a World where Netflix didn't exist yet. We are seeing those deals expire and they are consolidating their rights onto one service. Things are in transition and will look weird. Given enough time, the old agreements and the old distribution models will fade away and newer models will come into place. It takes time.


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Not broken, just the way it currently works and not impossible to change. It's just that with that change, will come compromise.

1. More cost per channel you actually want
2. Less content over all.

Neither are bad things per se, it's that I hear from many, I only want to pay for what I want. To make this happen, means points one and two are the likely outcome.

No. I am predicting that a likely outcome will be that the studios (Warner, Fox, Disney, etc.) will become vertically integrated. They will finance, produce, publish, and deliver their own content.

It's no surprise that a content aggregator (and technology company) such as Netflix wants to ramp up the creation of original content. Owning the content means that it won't be taken away from them (the way much their acquired BBC content moved to Hulu when their deal with the BBC expired), and that every cent they make stays within their system (rather than going to pay for licenses).

In the same vein, Disney owns ABC and associated channels, Warner owns many channels, as does Fox. They too are working towards being as vertically integrated as possible. For them to own their own direct to consumer OTT platform, means that they will have even more within their own system.

I agree that they will need to get it right. It's not simply a matter of putting it out there. Just as a good TV channel is programmed and curated, so too must a VOD platform be. It has to deliver content in a convenient package, at the right price. It has to deliver fresh stories, and novelty in a manner that also allows for discovery. Combine this with some very deep back catalogues and you have a good model.

Shomi, which I've never been able to access but have read about, is a content aggregator that failed to deliver on both content and technology. Not surprising.

The studios about which I am writing, are not aggregators. They will be hosting, content they own (library) and new content they create. This is a key difference in the scenarios. Owning, as opposed to licensing content, is everything.

However, as per above, I agree that they will have to get the delivery tech right. The app needs to work or they will fail. It needs to function as TV does.

Consumers will pay less if they choose to. However, if you want Disney's (Marvel, Star Wars, Pixar, etc.), Warner Brothers (CNN, DC Comics, Game of Thrones, Harry Potter, etc.), Fox (Fox News, Scream Queens, Glee, etc.), Discovery (just about everything you watch on Discovery and its channels) you will have to purchase a subscription to their services. Aggregators will still be a thing, but they will likely have to do without the content from these behemoths.

I could be wrong. But I am struggling to see why.

To that end, we may see a drop in Super Dangerous Duck Truckers but not if Discovery sees that it's data reflects that that is what their subscribers want. Which brings brings up another reason why the scenario I describe is likely. The Data that Netflix has on their viewers, and doesn't share, is massively accurate compared to other measurement systems like Neilsen Ratings.