Colony Bay TV

A Cable For You…

February 17, 2013 James Riley

Predicting the EndMy father predicted the death of newspapers sometime around 1978 or so.   I was a senior in high school, wondering about professions.  He made this casual observation:

“I would steer my kids out of the newspaper business, because my guess is it will be dead in a decade or two.”

That prediction of his lingered on in my mind for decades, and when, for a time, we began to see big thick copies of the New York Times printed in every city in America and when I tried to place a minuscule but very expensive advertisement in the Los Angeles Times for an event on Riley’s Farm, I began to wonder if the open casket viewing had been prematurely arranged.

But the pattern seems all too clear now.  My wife and I began reading more and more of our news online.  She was a devoted coupon cutter and metro reader, but eventually she gave up on the local paper and we cancelled our delivery.   I remember the prices for display advertising began slipping, and pretty soon, there were stories about severe financial trouble at the regional American newspapers.  We didn’t think anymore to look for used cars in the classifieds or sell anything in them.  We joined Ebay.   We built our living history business on line.  I didn’t make a systematic study of it, but I had the sense that newspaper advertising wasn’t working anymore for us either.

And then I remember a story on Drudge about the Times:  “Times Publisher Wonders if Paper Has Five Years Left.”   It seemed shocking to think that the New York Times might not be printed anymore, but stories followed about the paper begging for money, selling its real estate, laying off staff.  There was even speculation the paper would have to be supported as a non-profit, or given a federal subsidy.

Well, as we now know, newspapers may not be dead, but they aren’t exactly in the pink either.  A once powerful industry is either dying or slumbering.   Its print content is reduced and its web content is out there, competing with every blogger in the world for both attention and advertising dollars.  People are still reading news articles, but they are paying for them and seeing them in a different way — on desktops, Iphones, and tablets.  One would assume that the web advertising dollars are being captured by a lot more different content providers, even as they are largely brokered by one colossal umbrella gateway — Google.

Well, as most of you know, we here at Colony Bay OBSESS about the day when we can take video entertainment out to the public without having to run the gauntlet of financial and cultural gate-keepers who make up the current entertainment regime.

The means to actually deliver that content has now been around for a while.  Vast populations around the world now enjoy internet access fast enough to stream feature film content, even in high definition.    Thanks to Netflix and Amazon and Hulu and Itunes, lots of consumers now trust the process as well, so both the consumer and the technology are theoretically “at the ready.”

But the video equivalent of the newspaper world — cable and satellite television — still enjoys vast subscription and advertising revenue.  Some think it is all coming to an end, just like the newspaper world, but let’s think it through, for the sake of Colony Bay and others like us:

  1. The internet still doesn’t offer some of what cable television does:  live news and sports.   Until the internet offers that, quite a few cable households will find it hard to make the trade.  Newspaper readers could transition to news on the internet, without really sacrificing content, but television news and sports watchers can’t really find that product on the internet — yet.
  2. In the cable world, if a particular channel attracts viewers, cable companies pay for that content.  The rest of the cable channels pay “carriage fees” which end up subsidizing the bigger channels.  Small time or specialty channels, thus, have the deck stacked against them:  they must sell enough advertising to profit from their own content and subsidize the bigger channels at the same time.  It would seem, then, that these channels are probable candidates for an exodus to internet delivery.   When and if they do exit, they could create problems for those remaining on cable since the gross subscription revenue will be fought over between cable companies and the larger audience channels.  What you have here is the inherent frailty of a forced collective.  It’s fragile, and it will get more fragile as content providers exit the system.
  3. This collective also represents a transition that is different from the public’s shift from print newspapers to online journalism.   The old print newspapers were massively diverse collections of different news categories, all managed by one company.   All the staff writers were paid by one publisher.   The modern cable package, however, is a collection of channels offered up by different networks and production companies.  If anything, it seems more vulnerable to disintegration than the old newspaper publishers.
  4. All media is paid for by a combination of advertising and subscription revenue.  A hardback fiction work is all subscription (you pay for it, but you don’t read ads in the middle of a novel), and old line broadcast network television was all advertising, (you put your antenna up and got it for free, but you watched a lot of advertising.)  Most media now is a mix of both, but in the internet world, the ratio of content, advertising, and subscription is still being tested.   Who would have thought, for instance, you would click on a Youtube video only to be directed to an advertisement that allowed you to either watch it or skip it in five seconds?  The tolerance of the audience for advertising is being tested.
  5. If you are a media independent, only the most dedicated viewers are likely to pull out their credit cards and pay for an individual viewing of anything– news, sports, drama or comedy. (That says something good, by the way, about you Colony Bay members;  you’ve got focused, directed taste!) In addition to the market decision, (is this worth it?), there are convenience issues:  (“Where is my credit card?  It’s on the dresser.  One floor and two rooms away.  Do I really want to watch this that much?”)
  6. Since consumers hesitate making individual show purchases, the online media aggregators (Netflix, Itunes, Amazon) will have an advantage.  People will do essentially, on line, what they do with cable.  They pay a monthly rate and watch whatever the aggregator provides.   (They will also be vaguely dissatisfied with the collection, just like they are with cable.)
  7. There seems to be a HUGE opportunity in this “vaguely dissatisfied” problem.   We think there will be “boutique” internet video channels that offer up libraries of entertainment and news that match the variety of audience tastes.   Do you like quirky English and Irish dramas, with a little reflective news, magazine style?   Maybe there will be a $5 a month internet subscription, instead of a $85 a month cable bill.  Would you like a library of feature films and television shows a tad more nuanced than the stuff served up to the Jersey Shore generation?   Maybe that’s $15 a month instead of the $120 a month mega cable package.
  8. Any credible media source jumps to the internet with greater branding authority than small, media sources–whether they deserve it or not.  Just because you have your content delivery system ready on the internet, doesn’t mean you will be perceived as CNN or Paramount by the consumer.  This may seem obvious to everyone but the little independent like us.  We tend to think “our show is great;  why isn’t it a white hot magnet for every discerning audience member out there?”  The answer is fairly simple:  people follow their brands across platforms and technologies.  Just because email made it possible, theoretically, to send your daily column to millions, that didn’t mean Art Buchwald or Dear Abby or their syndicators were sweating about it.   The big boys will still have the advantage whether they deliver on the internet or via cable.
  9. The production conventions, and expense, of conventional television advertising is a big fat tub full of lard.   Watch any commercial film shoot, verses a feature film shoot.   The customer is getting screwed, big time.  The catering is better, the make work assignments are more likely, the location fees are jacked up, the ridiculous union rules are observed.  The whole thing is padded.    It’s an open scandal now, but there’s a chance there will be an opportunity for more independent commercial production companies — if someone decides the client deserves a market-oriented product.  Maybe.  Maybe not.  These conditions have survived the breakup of the three networks, perhaps, because the ad still reaches the same massive number of eyeballs — across different channels, so the expense of producing it, however padded, is still justified.
  10. Marketing, and massive marketing, will still be key.  People really do watch what they are told to watch, on whatever platform is current. As one independent film journalist wrote — build your audience first and then make the movie.  It’s been a difficult lesson for us to learn.  We thought the story would build the audience, and it does to some extent, but someone in your organization has to see marketing as their most passionate ministry.
  11. Google Ads and other ad banner services take a monumental chunk of any advertising revenue you might earn using them.   Having both purchased Google Ads, and having embedded Google ads for other products on our site, our informal study indicated that Google was paying us 10% of what we were paying them for ads.  That would mean that if your show generated $100,000 in ad revenue, Google gets $90,000.    Having your own ad sales force seems, at least, like something to consider.
  12. A lot of culture and history lovers wonder, with the internet and reduced production expense (digital cameras, say, over Panavision 35 mm film), why there isn’t more of an independent film and television option out there.   The answer is that it isn’t purely a technology question.  Journalism hasn’t gotten any better, or more investigative, not because there isn’t a lot better stuff out there.  There is.   But there is no big, legitimizing umbrella for it.  No one knows about it, and if they find out about, they don’t trust it.   “What is this site?   Who are these people?”  The guy who wrote a better article, who provided better information, can’t write the next piece, because there is no William Randolph Hearst to write him a check.   The people who want a better article have to spend hours looking for it.  There is no trusted channel for the totally independent content provider.

I think those observations are all pretty much on the mark.   What they mean for Colony Bay and Courage, New Hampshire — well, I’ll try to sum that up in my next blog.



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