The war over the future of television - TechCentral

The war over the future of television

james-francis-180I have been learning a lot about death lately. Not in some tragic fashion, but as a hobby. Well, not really a hobby — that is something you take an active interest in. More like a book, only without any of the heavy mental lifting required. A little how bubblegum wrappers sometimes have little QI-type facts written inside them.

You see, I’ve been watching a YouTube show called Ask A Mortician. In this ongoing Web series, a bubbly and charismatic mortician explains some of the ins and outs of being dearly departed. For example, the ashes in that urn are most likely grandma’s, contrary to popular belief that it’s just scooped out of some cumulative piles of the dearly flambé’d departed. Also, medieval Icelanders used to wear human skin pants to attract money.

Since I have a media centre capable of putting YouTube on my TV, the service has grown into a sizeable part of my couch potato time. Nowadays I rarely even watch a video on my PC or mobile — I just add it to “watch later” and use my TV to catch up on the bookmarks at a later time.

This habit has been rattling the traditional broadcast world for several years now. But Facebook’s recent announcement that it serves 8bn video views a day to its users is surely leading TV network executives to new levels of anxiety. It’s not even as if Facebook is an outlier: Snapchat attracts 6bn video views a day.

It is a bombshell for traditional media. Such staggering numbers can only be bad omens to both the traditional television market and the new disruptors, namely Netflix and its imitators. But let’s not get blinded by the billions just yet…

Critics point out that Facebook uses a very low measurement bar for its video: a clip only needs to run for three seconds before it is counted. YouTube’s bar is also low, but better, at 30 seconds. In the TV world that is hardly enough to get through a title sequence: not exactly a benchmark for award-winning entertainment.

There is no data I know of that defines Facebook’s main content types, but it appears mainly to be cute animals or acts or stupidity captured on mobile devices, trailers, funny TV ads and music videos: the kind of stuff YouTube was (and still is) renowned for. This should concern YouTube more than anyone, as Facebook (and presumably Snapchat) is rolling in on its turf. YouTube has built an advantage in its user-created content, giving quite a number of creators modest incomes and making a select few very rich. The official spin is that this all proves YouTube is blazing its own trail with no desire to become another Netflix.

Part of the rationale is that YouTube, Facebook and others are taking in advertising money, which is presumably being cannibalised from budgets intended for broadcast TV. But this may be a simplification: the broadcasters don’t appear too perturbed, as they still have the lion’s share of audience attention. The ad value of a single episode of The Big Bang Theory is three times more lucrative than a month of advertising with a YouTube megastar — despite having half the audience. A single TV network can earn twice that of YouTube, which, by the way, has yet to post a profit. Television companies also enjoy healthy relationships with high-value content creators such as HBO and National Geographic. Some networks are also in their own rights top-shelf content creators.

No doubt their long-term future is not as certain, but at least the TV incumbents have some good cards in their hands. Their biggest concern is Netflix, which is hurting traditional media models: just like iTunes stopped artists from releasing albums containing 90% filler songs, lacklustre shows can no longer continue to hide under the profits of megahits, because viewers pick what they want. The slow death of pay-TV bundles is evidence of this trend.

But that is a different battle and not related to Facebook and company. The social media sites only really hold large numbers. Yes, Facebook makes a lot of money, but it also has a billion-strong audience. Imagine if Netflix had a billion people paying it US$10/month — it would make almost more revenue in a month than Facebook does annually and nearly three times what YouTube generated in 2014.

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This is the real gap that needs to be bridged: how can YouTube and Facebook herd their big numbers into that territory? The launch of Red, YouTube’s ad-free (and flat-rate) subscription service, is on one level an acknowledgement of this problem. Ad revenue is a poor way to tap large followings. YouTube is also enlisting its successful user creators to make exclusive content for Red, again a hat tip to Netflix’s own content strategy.

The only reason why YouTube can insist it is not a Netflix wannabe is the lack of traditional shows and movies in its catalogue. But this may not be by design and instead a sticking point between how advertising and such can be sold: mainstream content owners feel YouTube wields too much control in the process.

YouTube’s own actions have betrayed its Netflix ambitions: in 2009 it launched a ‘Shows’ channel, which was supposed to host full-length programming. But today it mostly consists of short clips and content squarely not from the blockbuster camp.

This war is only going to hot up. In 2016, we may start seeing some serious live broadcast content deals appear with Apple, Netflix and even Facebook. Even the real hold-out — the very lucrative sports television market — is slowly inching into streaming territory. This is one area where the social video sites can make a really big market grab.

But don’t let Facebook and YouTube’s giant audience numbers fool you: they are nowhere near taking the crown. The fight for television is still busy with the weigh-in session where everyone poses for the cameras and talks about how they are going to klap the other oke.

  • James Francis is a freelance writer whose work has appeared in several local and international publications
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