Online Viewing and How it May Affect The Future of Television

Think back to all the shows you have watched, whether it just be for one episode or more, in July. How many of these shows did you actually watch on TV? I'll start:

  • Bob's Burgers: Netflix
  • The Office: Netflix
  • Unbreakable Kimmy Schmidt: Netflix
I have also watched a few episodes of Gravity Falls online, and plan on watching the second season of BoJack Horseman, a Netflix animated original, very soon. In fact, the only show I have watched on actual TV is The Middle (and even then all the episodes I watched I have previously seen).

And I highly doubt that I am alone in this. There are over 60 million active Netflix subscribers internationally, and its plethora of original programming has risen exponentially. Veterans such as House of Cards and Orange is the New Black have recently been joined by newer cult successes such as Sense8 and Unbreakable Kimmy Schmidt, all while viewers stream old favorites such as the newly-added Friends. Netflix has also been said by some to have contributed to the breakout success of AMC's recent hit Breaking Bad, and is home to current broadcast shows such as The Originals, which struck an online syndication deal with the platform well before the traditional four full seasons mark.

One thing that would strike a new Netflix viewer would be the fact that the service provides all of its offerings commercial-free, with little to no product placement (side note: I did see some on Unbreakable Kimmy Schmidt, as they presumably still thought the show was to be broadcast on NBC). 

In this sense, Netflix is changing the way in which viewers think of TV. Despite how many Emmy nominations it receives, Orange is the New Black receives, it is quite possible that the show in and of itself does not make a profit. But remember, Netflix is a paid service! This means that the major purpose of creating such series and having old broadcast favorites around as well are to increase the number of subscribers for the system, otherwise known as brand awareness.

According to an October 2014 Business Insider article, House of Cards cost approximately $100 million dollars to produce in its first season. Comparatively, one of broadcast television's top broadcast series, Modern Family, was sold to NBC Universal for $1.4 million an episode (which would be equivalent to $33.6 million per season, just a third of the estimated House of Cards, which is distributed by a streaming service that doesn't report ratings and produced by small independent companies.

So how can Netflix do this? It's all in the $8. That is the cost to have a monthly subscription to Netflix , which seems like a very cheap number, but it all adds up. If you join Netflix to watch the first season of House of Cards and keep it all the way through your season 3 binge-watch, that $8 has turned into more like $200.

But again, it's all about the brand awareness. According to the aforementioned Business Insider article, 17 million new subscribers have joined since the beginning of the series in February of 2013, whereas, which is roughly 35 times the amount of new subscribers the service would have needed to turn a profit. And that is just one example of one of its most popular series, if not the most popular, driving in subscribers in droves until the point where Netflix is making hundreds of millions of dollars.

According to an article on from the same late 2014 time period, Netflix is worth more than HBO and approximately as much as CBS. Some analysts have the online streaming service doubling its subscribers over the next two years. 

Now, what does this all mean for broadcast television? Well, only time will tell, but I will highlight what I think may happen

  • Ratings in the A18-49 demographic will continue to see significant year-to-year declines as more younger people start streaming.
  • Advertisers will be evermore interested in the hard-to-reach sub demos, such as M18-34 and W18-34. Such demographics have been partially attributed to the constant renewals on one platform or another of low-rated shows such as The Mindy Project, New Girl, and Bob's Burgers. 
  • Projects such as what NBC did to Aquarius (the online streaming part, not the renewed then shipped to Saturdays part) will become more prominent as networks experiment with the growing phenomenon that is binge-watching.
Let's switch gears a little bit now and talk more about how advertisers are going to effectively promote their products to viewers who simply refuse to actually watch their 30-second ads? That is not to undermine the value of such an ad (most cost over $100,000) but rather to open the question of if and how they can expand their horizons effectively and still make a profit.

After stumbling across a Mashable article written at the very end of 2014, I found myself in overwhelming agreement with a couple points. One of these points suggest that the ads be very individualized, which was quoted in the article to be said by Mr. Gavin Douglas, the CEO of a company called iPowow. An effort has already been done somewhat for this--you won't see an ad for NFL football on The Hallmark Channel or vise versa--we're talking SUPER individualized.

There were no specifics about how this would possibly work, and we have no idea of knowing if it is on the radars of networks and/or advertisers. I challenge you all now to recognize the device you are using right now to read this article, and think about all the possible ways you may have shared information with a larger company. Reading this on an iPhone? Apple probably has a sense of where you are. Clicked a link here after seeing a Twitter post? Twitter knows your age from when you signed up (or at least the age you put down!). There's a reason why those ad-supported tweets seem creepily tailored to you. And that really goes for any site, especially those of which you have logged into using an account.

Point is, if Apple and Twitter and Google and whatever else knows stuff about you, why can't broadcast television? Even Netflix suggests titles based on your viewing habits and an optional survey of what types of shows you typically like. Chances are, broadcast television may find a way to file suit and do the same as all these online companies are doing.

That way when I watch The Middle live, I don't have to watch commercials for both teenagers and middle-aged females, two of the demographics the show unsurprisingly hits best. I can enter my age and give them permission to track my viewing habits, and who knows, maybe the new system would not only create more specific, watchable ads but also more accurate TV ratings. As mentioned earlier, I would have no way of knowing financially or practically how the networks feel about such an aspect, but to the casual viewer and avid TV ratings fan, I think it would be worth investigating.

The other aspect that the Mashable article brought up was making shows more interactive than ever. That is not talking about calling 1-866-IDOL-05 to make sure your favorite person sings the following week via an automated voice message, but rather to have an interactive website or app that allows viewers to participate live. According to the article, Nielsen estimates say around 85% are using a secondary device while watching TV. Twitter engagement for shows up exponentially in shows that tend to skew younger is just one example. Such a tactic has been tried once recently with ABC's underperforming 2014 summer singing competition Rising Star, which allowed live voting for the East, Central, and Mountain coasts while having a tape-delayed save-like feature on the West Coast. Part of the reason why the show underperformed may have been due to complaints about the technology for voting, as well as the confusion brought upon by the West Coast votes. But you have to admit that it is a revolutionary idea that if implemented perfectly could have changed the way viewers think of broadcast television. But more than understandably, it had its problems, as this is new technology that is being used with a high risk factor.

What are your thoughts on this? What are your viewing habits by platform? What do you think may help steady the falling ratings of broadcast television. Let me know in the comments or polls below!

Works Cited

Bort, Julie. "Kevin Spacey: Netflix Made A LOT Of Money On 'House Of Cards'" Business Insider. Business Insider, Inc, 29 Oct. 2014. Web. 29 July 2015.

Mullaney, Tim. "Netflix Hits a Bump on the Way to TV-streaming Dominance." MarketWatch. Market Watch, Inc., 15 Oct. 2015. Web. 29 July 2015.

Rothfeld, Lindsay. "6 Trends Redefining the Way We Watch Television." Mashable. Mashable, 23 Dec. 2014. Web. 29 July 2015.

Thielman, Sam. "NBCUniversal Paid $1.4 Million per Episode to Air Modern Family. Will It Pay Off?" AdWeek. Adweek, 15 Sept. 2013. Web. 29 July 2015.


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