How to Watch Television: Cable & FOX

Previously, on “How to Watch Television”… (Part I here)

This qualification of the requirement for networks to make up their costs on programming brings us to two examples of networks that are failing in embracing the new market of internet streaming: cable networks (USA, TNT, FX) and FOX. First, there are three distinguishers here: main networks (NBC, CBS, ABC, FOX), cable networks, and premium networks (HBO, SHO, Starz). Cable networks are the largest category; we’ll generalize them to all of those hundreds of middle channels you tend to surf through without really stopping. Second, FOX Broadcasting. FOX streams its programs, but has recently started delaying their “legal” release until eight days after broadcasting, conveniently after the next episode has aired. This line of reasoning to try to maximum broadcast profits fails, as we’ll show.

Cable networks get the short end of the stick. Like premium networks, they do not pulls tens of millions of viewers. A solid episode of Psych needs 3-5 million, and Archer (FX) pulls a little under one million. Yet, unlike premium networks, cable depends on advertising for its already niche audience. Cable started out almost entirely game shows and syndicated reruns, but in recent years they have started running original programming. Good programming that is building their strength increasingly, but still they are not at a point to economically enter the streaming market.

It should be noted here that many of these shows, especially those on cable, are available day-after to purchase online through iTunes or Amazon Video, so on. It’s good for the network as they offer the programming quickly but still make a profit on each episode they otherwise lose by removing commercial breaks, but the problem is that you have to pay for it. I love television, but I would never pay to watch, for example, Monk because I don’t consider it a repeatable show. Archer I could watch over and over, so I do often purchase episodes, but crime dramas and others are not. This varies by person, but you’re probably not willing to pay for an episode you’ll only watch one time. We’d rather endure advertisements.

Cable networks have started to enter the streaming market, but poorly. Psych streams, but episodes are not available until thirty days after broadcast. The same holds for Archer, The Closer, Burn Notice, and more popular cable shows. Yep…thirty days. It’s ridiculous, and it brings us to FOX. FOX isn’t as bad as cable, but it has started delaying episode streaming by eight days this television season. Why? Because FOX has an exclusive deal with Dish Network subscribers to stream episodes the day after while all others wait eight days (conveniently missing not only one, but two episodes).

FOX made this deal as a business decision. Whatever fee Dish paid to have exclusive day-after streaming rights was more than their expected earnings from full access streaming ads. Monetarily, it’s a good deal for FOX’s quarterly report and a good deal for Dish’s subscriber marketing. However, long run deals like this won’t last. AT&T held an exclusive contract for Apple’s iPhone for over three years, and while some people did switch to AT&T because of it most just waited it out until Verizon gained access, and now Sprint. Time has shown that customers, regardless of the deals being offered by competing companies, tend to be very loyal to cable brands – television, phone service, internet. You have to offer them a heck of a package at a great price to convince a household to go through the steps of converting everything (it’s not hard, just annoying). Day-after streaming of FOX shows isn’t enough of a deal.

FOX isn’t as bad as cable networks. Take the following logic:

  • People love cable shows
  • People want to watch cable shows as soon as possible
  • We delay streaming thirty days
    • They miss a month’s worth of episodes compared to watching at broadcast
  • They will be encouraged to watch broadcasts, because they want to stay up to date

This logic is wrong. Being told you have to wait longer to watch episodes doesn’t encourage watching the broadcast version. To start, many people watch shows streaming because they can’t watch them when originally broadcast. I do not have access to regular television and many people are simply too busy. Making us wait thirty days doesn’t encourage us to watch them when aired or to purchase them on iTunes. It forces us to watch them illegally on those websites we all know about.

I hate watching shows illegally, but as a customer I do feel somewhat forced into it. If a show is available legally, I watch it as such. NBC, ABC, CBS, HBO. They do streaming right. Showtime just started, but they’re getting there. FOX makes you wait eight days, which is mean, but I begrudgingly wait those days until I can watch Bones and Terra Nova, and hopefully they’ll realize soon enough that there’s more profit to be had from full access streaming then exclusivity deals, in the long run. Cable networks are the only ones still lagging behind, but we’ve gone over why that is.

It’s tough being in the transitionary phase that we are. Obviously, I watch shows on an actual television when possible, if anything because the screen is larger and better resolution, but the industry over the past few years has had to recognize that many people do not have that privilege. More and more families are skipping out on paying for cable altogether and only using Netflix streaming along with home WiFi. This is the future. Point in fact: Netflix will be exclusively funding and streaming new episodes of Arrested Development in 2013. That’s right. Brand new episodes that are available only to stream on Netflix. Netflix also bought a Kevin Spacey original program called House of Cards, but little has been heard of it since. Both of these are experiments, and only time will tell whether they are successful.

Some businesses simply have a harder time adjusting than others. The film industry is having a similar struggle, though to a lesser degree. Admittedly, the difference between watching a film on a huge theater screen versus my laptop is greater than a 50-inch television compared to my 15-inch MacBook Pro, but the principles behind the “streaming war” are the same. Many networks have started to try to strong arm Netflix into larger licensing fees after they realized how successful Netflix had become. Consumers often feel left out, and this is somewhat true. High-ups in network offices argue with each other over how much episodes are worth for a certain program on certain viewing platforms when the viewer just wants to watch and be entertained.

It’s a transition, but there’s little doubt what the outcome will be. Hard as some networks may fight it (and even more so the cable companies), cable packages are dying and being replaced by WiFi (oddly provided, usually, by the same cable company). Programs still bring higher viewership from broadcasts than streaming, but those numbers continue to shift year after year. HBO Go is the best at streaming. They upload shows literally five minutes after they start broadcasting, so I can watch online real time with someone watching the original broadcast, but that’s only half the change. It’s also a matter of people wanting to watch on their own time. The internet, despite its age, continues to change the world and how we move through it, from social networking to quickened communication to just what manner and how long we have to wait to watch Glee.

Alas, we’ll treat this as premium cable instead of network, and end not with a cliffhanger but a firm, strong…

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