“Social TV” is hot right now. Twitter is strategically building studio relationships, major consumer brands are engineering Super Bowl ad campaigns around second screen experiences, data companies targeting the intersection of online audience engagement and ad dollars are attracting considerable investor interest and everyone from Microsoft to Time Warner is dipping their toe into the new overnight sensationalism surrounding big media conversation. But while it’s fairly easy to affirm that the future of TV looks highly social, with tremendous opportunity for fostering content-centric dialogue and [re-]targeting, it’s a lot less clear how much “tomorrow TV” looks like the present in terms of platform, players and economic allocation. One thing that’s already clear though, is Twitter (and GetGlue, BlueFin Labs et al.) isn’t saving traditional TV from considerable current and future disruption, for three reasons:
1. Ad dollar re-allocation is inevitable
For the foreseeable future, TV has a bigger viewer engagement measurement problem than digital, while simultaneously lacking the distribution outlets for the viral sharing of content. To paraphrase Mark Suster, when it comes to internet TV the pipes are smarter, and they also flow to a lot more destinations. Yes, I can extend the conversation around a show like “Big Bang Theory” to Twitter, but I can’t disseminate viral video embeds of its core content. Similarly, Hulu is a great distribution service for traditional TV programming (one which doubled paid its subscriber base to over 3 million in 2012), but it’s still a closed ecosystem with nowhere near the inventory of cable or the 4 billion hours a month of YouTube now being watched around the Globe.
P&G, Samsung, Ikea and many other brands get it. Audiences are too distracted and have too much autonomy to regulate their own programming. Correspondingly, the ad dollar drain is coming.
2. Over-the-top is making traditional over-the-wire content bundling is becoming an economic anachronism.
For me, 2012 was the year I stopped paying for broadcast ESPN. My household has chord-cut and is now officially all digital. I get all my music from Spotify, all my video from YouTube and Netflix and if I want to watch sports I go to a bar or my buddy’s house (he’s got a bigger TV anyway, in addition to being a living sports encyclopedia). And, at the end of the day, I feel like I’m coming out ahead paying Netflix less than $10 a month rather than shelling out $40 or more a month to Comcast when I only care about five of their programming channels. Sure, I’m vested in the new media space and tend to be a pretty early tech adopter, but if you don’t think broadcast TV and digital video are converging, it’s probably because you didn’t go to 2013 CES in Las Vegas like I did. Whether it’s via Boxee, Roku, XBox, Google TV, Apple TV or Samsung more and more tech titans are making our TV’s into connected monitors, and that integration increasingly means more and more hardware options that empower TV viewers to selectively program, time-shift and consume video entertainment on their own terms. Within the next few years, the traditional broadcast model of using a small number of channels to subsidize a programming bundle will increasingly lose viability.
3. Digital is more nimble
Yes, AMC’s “The Walking Dead” is considerably more interesting and immersive than it’s side carriage webisodes (or just about anything I’ve come across on YouTube recently). But the tide is turning. The quality of original web series is increasingly rapidly. Look no further than Warner Digital’s H+: The Digital Series project as case-in-point. Online is also much more responsive to viewer tastes, and the feedback loop for a web series audience-testing on YouTube, BuzzFeed and Tumblr is much shorter than Hollywood’s traditional iteration cycle. Even Hulu and Netflix, both networks that have historically been handcuffed by their licensing relationships and the cost of working with traditional networks, are increasingly branching into original premium content. Meanwhile, YouTube’s enormous economies of scale are demonstrating that high quality entertainment is a sustainable business model for great audience-building networks like Maker Studios.
The video media landscape is undergoing a sea change, and second screen isn’t necessarily the life-raft the big networks and big studios seem to see it as. Twitter isn’t saving TV, and neither is Hulu. So while the future of TV is undeniably social, it looks increasingly unlikely that it ends up being the TV + Twitter mashup currently being heralded as “Social TV.”