Absorb What's Useful

Television will never be the same once online viewing becomes a dominating force in today’s entertainment.  Some of the top media companies are using analog dollars to chase digital coins in the race for online viewers and how they they capitalize off the profits.  With online providers like Los Angeles based company Hulu, we have seen a rapid number of people who are willing to watch their favorite TV shows and movies online rather than through the cable box.

Recently CBS executive Quicny Smith spoke about his disagreement with free online television with companies such as Hulu.  His stance is that CBS should continue the current business model of bringing the viewers to the biggest advertising space which is television.  In this approach he says that “you can make a lot more money doing things that are additive and complementary to the rest of the CBS line” which is why CBS networks have yet to release their TV shows on the Internet.

At some point these decision makers in large media companies will have to tackle with their online strategy quicker than they expected.  Especially when The Kelton Research Study found that 84% of Americans say they are more dependent on their home computer than they were three years ago.  Which changes the playing field as more people are using their desktops and laptops frequently they are tempted to also use it as a viewing device for entertainment.  Today’s generation of users want a mixture of pay and free services giving them a choice on what they value for money.  My stance remains the same as it was with other evolutionary debates whether its vinyl records vs itunes downloads, newspapers vs mobile applications, telephones vs. mobile phones they are hear and not going anywhere.  If the consumer can adapt to new ways of absorbing media then why is it so difficult for the media providers to keep scratching their heads on decisions to adapt or rebel.  If they do not figure out a practical strategy then they can should not be surprised when a another start up company in Seattle or Silicon Valley does.

As a digital storyteller and cable subscriber I have not spent close to the average 3 hours of viewing on Hulu but I respect the new approach to providing free programs to online viewers.  The ability to watch a TV show whenever you desire with minimum advertisement will attract new viewers and maintain the loyal “free” subscribers.

News Corp. is reconsidering to charge for their online newspaper subscriptions hoping to recover some of the $203 million dollars they lost in the fourth quarter of 2009.   As investors in Hulu both Rupert Murdoch and NBC Universal CEO Jeff Zucker have begun to let greed get to their eyes too soon after seeing the potential in online programming.  They should be more patient and cautious about how they want to integrate traditional television business models with the new digital media democracy.  Since they are in the early stages of how to earn more revenue online I would advise them to not move too quickly charging people for content by adding a subscription fee.  Strangely enough my perspective does not come from the fear of paying for another service (mobile phone, satellite radio, DirecTV, and utilities) as much as the impact this would have on quality programming being pressured to produce for ad-supported models and commercialization.  The pressures of Wall Street prove that they were the same puppet masters who lowered the standards of television in return for more money and out right gluttony.  For companies like NBC, News Corp. and Walt Disney Co. who produce a lot of content yearly they should work on more creative programming rather than how to charge for a brand new service just because people are online watching more videos than before.