TV's complexity crisis creates opportunities for content owners

This post originally appeared as an insight for Outsell’s customers. Republished with permission.
At a recent industry event, panelists from Adobe and Comcast agreed that if TV Everywhere is to succeed, it must be kept simple.
That’s not as easy as it sounds. The complexity of TV Everywhere is a symptom of the complexity of TV itself. How complex is TV? TV is so complex that…

  • TiVo requires a $15/month subscription to an electronic program guide in order to be useful.
  • TV Everywhere, a free and useful service, is ignored by most consumers.
  • Alice’s living room TV has been replaced with a home theater that has a set of instructions she printed up so the family members that didn’t set it up can actually operate it.
  • Bob’s TV, DVD player, Roku, iPad, Wii, and Xbox all have Netflix on them, as well as apps for dozens of other channels. Some of those channels are well-known brands and some he’s never heard of, but he thinks he should try them out some day.
  • Carmen’s favorite programs, the channels they run on, and her pay-tv service all have apps (and websites). She doesn’t don’t know which one will let her watch her favorite programs, which only offer clips, which will have advertising, and whether it will be skippable.
  • Dimitri’s hasn’t has used all the features of his cable box. But it may be getting Netflix, too, soon. Or Hulu. Or maybe both.
  • Steve Jobs died before he solve it.

Somewhere in the middle 2000s, TV became more complicated than the internet.
As television became more complex, the internet became a lot simpler. If Alice, Bob, Carmen, or Dimitri don’t know where something is on the net, they know that Google can get them there. If they’re looking for a television program they’re likely to start with Netflix. If they just want to know what’s going on, they’ll check Facebook or Twitter. If they want to buy a book, they’ll go to Amazon. And Google will get them to everything else.
TV’s complexity stems from a lot of sources, including rights, business relationships, the limitations of the TV user interface, the (understandable) lack of a keyboard, the (incomprehensible) complexity of TV remote controls, and the issue with scaling a three-network interface to by two orders of magnitude to hundreds of channels. Meanwhile, the complexity of delivering to multiple devices has created headaches for pay TV operators.
The result is that, despite their disadvantages, over-the-top services have the advantages of ubiquity, simplicity, and usability over traditional television, whether it’s linear or TV Everywhere. Audiences know where to get it, how to find what they way, and how to use it. They’re just as likely to use Over-the-Top services than their pay-TV operator to binge-watch TV.
It’s up to the MVPDs to simplify television. The set-top boxes, interfaces, remotes, physical connections, interfaces, and services belong to them. But the coming wave of consolidation we forecast in our Future of Television report makes that unlikely in the short to medium term. Especially if it’s financed with debt, like Charter’s proposed takeover of Time Warner Cable. Charter’s shareholders claim that virtually all the “synergies” from the merger will come from cost-cutting, not new revenue. That doesn’t suggest that innovation will be a priority any time soon.
Television and channels and producers can’t wait. They will have to navigate a complex television landscape.
We looked at some of the strategies that content owners can use in our Future of TV report. Complex distribution systems are both a response to and a cause of complex audience behavior. The result will be audience behavior that looks increasingly chaotic.
Content owners who overcome complexity with creative distribution, audience communication, and marketing will have a competitive advantage in this chaotic world.