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Thursday, April 24, 2014

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  • 7 Things "Dexter" Taught Me About the Future of TV

    Last week, in "Showtime Circles Its Wagons, But to What End," I mentioned that I have recently become a huge fan of the network's hit show "Dexter." I was exposed to "Dexter" a while back when an old friend gave me the first two seasons on DVD. I had put them away and recently found them doing some cleaning and decided to give the show a try.

    My wife, who ordinarily shares my taste in TV, was completely grossed out by "Dexter" in the first 5 minutes (which is easy to understand considering blood is practically a supporting character in the show), so watching it together on our main big-screen TV wasn't going to be in the cards. However, I noticed that the first two seasons were available on Netflix streaming, and so I decided early on to watch most of the first season's 12 episodes on my iPad, the first time I would do so with any TV series. Along the way I became completely hooked on the show, and am now well into season 2.

    Having this experience gave me a far more personal perspective of how the experience of watching TV is changing for consumers, and what this all means for the future of TV. Here are 7 of the most important takeaways:

    1. The term "reruns" is obsolete - The traditional bias in TV has been that the first-run airing of a show was its most valuable moment. Recently, recording on DVRs has cracked that notion a bit, as consumers watch new episodes later, on their own schedule. But my experience with "Dexter" demonstrates a further evolution: first-run isn't a scheduling-oriented concept, it's a viewer-oriented concept. It didn't matter all to me that "Dexter's" first season was in 2006; I had never seen it, therefore it was new to me.

    As such, the old term "reruns," with its pejorative overtones is now obsolete. So when Comcast's CEO Brian Roberts recently commented "What used to be called 'reruns' on television is now called Netflix," he was right, but only in the old-world context. In the new world all that matters is that a show is "new" to that particular viewer. We lead busy lives and it is often impossible to watch all the shows we'd like in the season in which they air, if at all. Netflix and Hulu Plus have exploited this shift in mindset. Others need to as well.

    2. Data is king - In the traditional TV business, "data" meant Nielsen ratings, the gold standard of TV viewership measurement. Nielsen ratings are still important, but they are no longer enough. What is now required is data at the viewer level - who watched what, for how long, when did they do it, and on what device. This type of data matters so much because viewership is so fragmented. New product and marketing opportunities flow from having this type of data. For instance, it is extremely unlikely that Showtime knows I just watched the first full season of "Dexter" or that I did it on my iPad, or that I watched mostly between 11pm and midnight. But if they did, they could send me highly-targeted, personalized offers, and take advantage of social media. I have demonstrated extremely high engagement with their product; I'm ready to spend money with them now. Having the data to facilitate that transaction is key.

    3. The bar for advertisers is getting higher - Life used to be easy for TV advertisers and media buyers. Choose an audience, formulate an ad budget, create some spots, let them run, measure their viewership, etc. DVR recording began changing all that, and "Dexter" provides a window into how things will change further. Is it better to monetize with ads at all, or to go ad-free, with licensing, and upselling (per above) the revenue model? If ad-supported, what load, how to deliver, what to expect, etc. When I watched "Dexter" it was a far more pleasurable experience to not have ads and I would have been very tempted to skip them. But in this case I was willing to pay for the luxury. Sometimes we will be, sometimes we won't. Figuring out this puzzle makes advertisers' lives a lot more complicated.

    4. TV is personal and portable - Watching "Dexter" on my iPad with headphones was different also because I could watch in so many different places, both in and out of my house. Ordinarily my concept of watching TV means going to the rooms in our home with the TVs. But watching on an iPad meant bringing the "TV" to whatever room/environment was optimal at that moment. Sometimes I'd watch at the kitchen table while having a bowl of cereal, then hit pause and continue watching in bed. Or vice versa. Or other circumstances. That kind of flexibility creates a very tangible feeling about it being a personal experience. I'll admit, I scoffed at Steve Jobs, when in his original iPad unveiling, he kept using the word "intimate." At the time it felt like typical Apple marketing drivel. Now, having experienced "Dexter" on my iPad, I can attest that I felt an extra level of connectedness.

    5. The concept of "scheduling" is upside down - With traditional TV serials, one episode was aired each week. A key part of the model was getting the audience to come back each week. That started to change with DVR where viewers could choose to create a few weeks' backlog if they wanted and watch them in a batch. Once again, "Dexter" demonstrates a further evolution. Once the whole season is available, I could watch as many or as few episodes as I wanted. A big cliffhanger? I would watch the first 5-10 minutes of the next episode. Friday night with more time to spare? I could watch 2-3 of them back-to-back. All of this creates very different expectations; the idea of being served up small doses at a time and then waiting goes away. Choosing how much to watch is a very powerful enabler, and really increased my viewing enjoyment. Netflix signaled it understands this shift; when it announced its recent deal for "House of Cards" it said the show would be released in batches of episodes, not one at a time on a typical schedule. That approach will help the show become a winner.

    6. Packaged media is dead - It's no news that DVD sales are cratering, but streaming "Dexter" as I did reminded me that regardless of the revenue model (purchase, rental, subscription, etc.) for packaged media, the format is dead. Content is moving to the Internet or the "cloud" or whatever the appropriate term is. As I mentioned above, only seasons 1 and 2 of "Dexter" are available for Netflix streaming (and incongruously they're being pulled starting this summer). That means I'd need to queue up and order season 3-5 on DVD. But now my expectations have been set by streaming's convenience. I don't want to wait, I don't want to jostle with my family members for priority for 1 of the 2 DVDs we can get at a time. And I don't want to have to deal with ripping DVDs so I can view episodes on my iPad. Others are no doubt having the same experience. Packaged media is still great under certain limited circumstances, otherwise it's going away.

    7. TV Everywhere is absolutely essential to pay-TV operators' success - As Netflix and others raise the bar on viewing convenience, it is absolutely essential to pay-TV operators that they launch TV Everywhere services, and that they be robust. Once a number of shows have been viewed on an iPad, via Netflix or other services, a pay-TV operator's inability to do the same will be increasingly noticeable and reflect unfavorably. It appears that all of the largest pay-TV operators already understand this and are moving aggressively. However, it also appears that cable networks are not yet on board. No doubt there are legitimate concerns. But rather than trying to address each and every one of them to 100% satisfaction, the entire pay-TV community needs to be figuring out how to work together to keep moving forward. If it doesn't it will look out of step and endure subscriber defections.

    No doubt there are other lessons to be learned from "Dexter" about the future of TV, but these are the main ones for me. If I were an executive in the TV industry, I'd highly recommend streaming an entire season of a TV series. It will be a worthwhile experience.

    What do you think? Post a comment now (no sign-in required). 

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