The problems with adapting to a changing market place is not just a journalism problem.
Clear parallels can be drawn between the problems that the journalism industry is facing and the problems that other big media industries are facing as well. One only has to look at television industry, and how big networks are still trying to find ways to force us to view content the way they want us to view it. Less people are viewing TV, which has led to an onslaught of cheap-to-produce reality series, and younger people increasingly want to view TV on their iPods or computers.
People want choice and they want distribution methods that fit their lives. These are some of the same criticisms of the newspaper industry. Newspaper execs failed to embrace the Web, because they wanted people to view content in a method, the newspaper, that worked the best for them — and not the consumer.
Back in 2002, while I was a freshmen in college, Family Guy was starting to become a popular show, despite being canceled. There was no place to get the shows at that point. FOX didn’t sell DVDs of the show yet, it wasn’t in syndication and there weren’t new episodes on the horizon.
But my friends and I wanted to view the show (along with millions of other people). So, we did. We downloaded every episode for free through file sharing programs.
It’s not that we didn’t want to pay for the show. It’s that we couldn’t.
Family Guy was eventually brought back because of extremely strong DVD sales. But FOX still lost a lot of revenue when it wasn’t selling Family Guy on DVD or allowing other networks to syndicate the show. Plus, a lot of college students didn’t have cable, but they all had broadband connections.
An Internet distribution model would have brought in a lot of revenue. FOX should have anticipated that ground swell of change and gotten ahead of the curve, instead of languishing behind it. Instead of suing YouTube for “violations,” networks should have beaten YouTube to the punch.
The reason there is a YouTube or a Craig’s List is because big media companies failed to move quickly and capture a market that should have been theirs. Newspapers complain bitterly about Craig’s List, but it filled a niche that newspapers were unwillingly to. YouTube is largely comprised of original, non-copy righted material, despite what big media companies would want you or courts to believe, but big media properties also are popular on the site.
Clips of shows like The Daily Show and The Colbert Report started showing up on You Tube because fans of those shows wanted to be able to re-watch their favorite clips and Comedy Central (owned by huge media company Viacom) failed to provide an avenue for viewers to be able to watch their favorite clips. In short, they didn’t meet their own customers demand, and they thought they didn’t have to.
Without disruptive influences like YouTube, Comedy Central and other companies wouldn’t offer free clips on their Web sites. Although a free, non-profit site is still delivering what consumers want a lot more than Comedy Central is — Colbert on Demand. It’s a YouTube-like site for Colbert Report clips. Comedy Central should buy that site, sell some ad space and watch as the money rolls in.
Not only will they make money off of people watching clips that were already created for TV, but they’ll also encourage more people to watch the show itself. Site like Colbert on Demand are also great ways for a show to become popular. The Web is an incredible marketing tool when used properly.
Getting back to my original story; years ago it was possible to view the TV shows you wanted to when you wanted to on your computer or portable device. It was exactly what users wanted, and it had no restrictions on what computer or portable player you could play it on. Of course the big media companies weren’t making money off of this, because these were rogue solutions by fans for fans.
NBC is finally launching a service to let people watch TV on their computers, which is what we did years ago in college — but on our own terms. Unfortunately, it only works on Windows computers for now, which is silly because they are eliminating millions of potential customers (Mac customers on average are wealthier and better educated than Windows customers. Linux customers are very into computers and the Web. Never turn down a potential customer).
The service will allow customers to download shows to their PCs (but not portable players) for seven days after the show originally airs (because people are only interested in shows the first week they are available). It is supported by ads and it is free. The service should be in beta form later this year, and hopefully launched by the end of this year or early next. It might be a great way to get more viewers, but unfortunately a big media company can’t do the Web right.
It’s just not possible as long as they think they know best and not the consumer.
Why eliminate the ability to play it on portable devices? Why limit people to a seven-day window after the shows original launch date? Why force people to download special software to play these shows just so you can spy on consumers?
And why, oh why, must people reauthorize the shows if they haven’t viewed them within 48 hours?
Because big media companies want to control how you view their content, despite the fact that the Web is all about how we choose to view content we like. What makes this decision even more backwards, is that it is NBC’s attempt to get away from iTunes. But Apple understands two things very well: computers and the Web.
NBC doesn’t understand either one. NBC wants to control the distribution channels once again, something that iTunes store didn’t allow NBC to do. Yet, it was the iTunes store that made their comedy darling, The Office popular.
Back in early 2006, Greg Daniels the show’s co-creator had this to say:
“It was just unbelievable,” said Daniels of the show’s success on iTunes. “If you’re trying to talk to someone about this show you saw, and you actually have the ability to whip something out of your pocket and show them a scene, it helps word of mouth spread… That helped ['The Office'] get a full-season order.”
Now, season four of The Office is not on iTunes because NBC wanted more control and Apple was unwilling to acquiesce to their demands of wanting to charge upwards of $4.99 a show versus the current $1.99. NBC is pulling out of the very venue that helped make their shows popular, and the only venue that can put their shows into the hands of millions of people who own an iPod or iPhone.
NBC can’t even embrace a disruptive distribution channel like iTunes that made some of their most popular shows popular. It’s cutting off your nose to spite your face, and it just lost lots of customers like me who aren’t home when The Office normally runs and want to view the show.
My main computer is Mac, and I have an iPod. NBC direct is clearly not for me.
I’ll still catch every episode of The Office this year. There is no doubt about that, but I probably won’t be catching them in the way NBC would want me to or in ways that will make NBC money. Now, whose fault is that?
CNET’s Buzz Out Load Podcast recently said NBC was “shooting themselves in the foot right outside the gate” with their upcoming service because of all the hoops that they are making people jump through.
But why can content purchased from iTunes be played only on an iPod or iPhone and not a Creative Zen, for instance? Don’t blame Apple. Shows purchased from Amazon.com’s Unbox play on several video MP3 players, but not the iPod (or Macs or Linux). Don’t blame Amazon.com.
The culprit again is the big media companies. They insist on Digital Rights Management (DRM) for music, TV shows, movies, etc, which limits your ability to use content you purchase in the ways you want to use it. Apple, consumer watch dog groups and other companies have openly called for an end to DRM, but big media companies like NBC want to keep DRM because it controls how you view content — it controls you.
Amazon’s Unbox has a particularly troubling DRM scheme. To purchase content from Amazon.com you have to download the Unbox software so it can phone home and keep track of what you are and are not doing with videos you purchase from Amazon.com. This, of course, takes up computer resources because it is constantly running, and it also causes serious privacy concerns.
Apple created their DRM, FairPlay to appease big media companies. Many have wondered why Apple doesn’t license FairPlay, allowing users to play content protected by FairPlay from the iTunes Store on a myriad of FairPlay-approved devices? Apple asserts that they are liable if someone cracks FairPlay and the big media companies could hold Apple monetary responsible. If they license it, it will become considerably easier to crack.
Apple contends the simplest way to allow content purchase from iTunes, Unbox, etc to work on a myriad of platforms is to do away with DRM. MP3s, AACs, MPGs, etc are all standard file types that play on a myriad of computers and portable devices. Even Microsoft’s Windows Media format and Apple’s QuickTime format can play on just about anything.
Some big media companies, however, are experimenting with the idea of getting rid of DRM.
EMI was the first big media company to start selling DRM-free music on the iTunes store. Of course, you have to pay extra for the pleasure of using DRM-free content. Instead of$0.99 a song, you can pay a cool $1.29 a song to be DRM free. To be fair the songs are encoded in a bit rate twice as high as the DRM version, but it’s still essentially asking customers to pay and extra $0.30 to be able to do what they want with their own content.
We may see other media companies go DRM free for music, but it seems very unlikely for movies or television shows. Why would a company want to make it difficult for you to enjoy content that you like on different platforms? Simple — to protect legacy forms of revenue.
It’s no secret that network television is based off of TV advertising — kind of like how newspapers are based off of print advertising. Allowing people to view content in other forms — whether it be a newspaper on the Web or a show on an iPod — cuts into those legacy forms of revenue, which those industries are completely reliant on. Big media companies haven’t found a coherent way to make money off of the Web, which is why they try to limit it.
But you can’t limit what the people want. It was the people who made The Office into such a widely successful show. And it was those very same people downloading shows to their computers, exchanging clips on the Web and spreading the word about the show on message boards, blogs and other Web sites that made that show popular.
Big media companies, whether they distribute television shows or news, will have to adjust, and they will have to find ways to make money off of more than just legacy forms of revenue. The people have already adjusted — it’s time for big media companies to stop trying to tell people what to do and to start giving the people what they want.
The more you look around, the more you realize it is not journalists or journalism that is resistant to change. It’s something that afflicts a lot of people and lot of industries. At the end of the day, however, change will occur.
And it’s always much better to embrace change than fight it in the end.
