A market study in the era of Peak TV

The winners and losers of Peak TV, and what Apple TV can do about it

We are living in the world of Peak TV, a term coined by FX President John Landgraf a few years ago – and he was right in many ways. We are living in an unprecedented era in which the TV options are more varied, more accessible, better overall and just plain more.

In 2015, there were a whopping 409 original scripted series, which is double what was produced six years ago and is now a record. 2016 promises to top that.

Landgraf coined that term because he believes the industry can’t sustain that kind of production. There are only so many eyes watching screens so how can more than 400 shows exist and networks continue to succeed?

For the first time, networks are taking on the challenges of Peak TV by viewing themselves as brands rather than simply deliverers of content. If you’re just a collection of shows without a guiding principle then you won’t succeed. That’s true in television and it’s true in any business.

How do networks figure out their brand? How does it affect which shows a network airs? And how can brand aid in the battle against (or co-exist with) the streaming giants of Netflix, Amazon and Hulu?

With most of us waiting breathlessly for a groundbreaking Apple TV to fix this problem, what are the networks doing now and what should Apple TV look like? What is the future of Peak TV?

The streaming networks changed everything

Let’s start answering those questions by addressing the elephant in the room: Streaming networks. They have significantly changed the landscape because it took the power from the networks and gave it to viewers. No longer would consumers be beholden to what the networks offered and when they could see shows.

The viewer emerged as the one in control.

Netflix changed the way we watch TV.

Consumer control is now the way of the world. The days of being told that you could only watch a limited offering at a certain time are gone. That is the single biggest reason why the streaming networks have succeeded.

Sure, their offerings have often been stellar. But that’s only a small part of it. Netflix, which started as a mail order DVD rental service, didn’t really take off until it jumped into streaming with content that was early seasons of current and past shows from other networks.

You might even remember the outcry when founder Reed Hastings planned to split the two sides of the Netflix business into two different brands, causing fears among Netflix customers that their subscriptions were going to double. Hastings backed off.

The success of Netflix was in giving customers control, thus positioning TV networks as out of touch and even arrogant. The idea that you could only watch what you wanted under somebody else’s rules created images of TV execs sitting in their offices and smoking cigars like Mr. Potter in It’s a Wonderful Life.

Netflix also structured its services as subscription based instead of on a pay-per-view basis. I’ve always thought that one of the reasons Apple has struggled with its online services is because it is not subscription-based. In music, Pandora and Spotify have overtaken the industry because they’re subscription based. When Apple finally released a subscription-based Apple Music, it was too late. (That and other problems.)

Subscriptions add the illusion of control because, subconsciously, the viewer (and listener) believes they are watching (and listening) for free. When you charge on an individual basis – like what Louis CK did recently with his critically acclaimed series Horace & Pete – many commentators were outraged that the comic would charge per episode. How dare he?

The advantages of being a cable network

Before we go any further, let’s put this out front. We’re not going to examine the broadcast TV networks: NBC, CBS, ABC and FOX. Those networks still air shows that get high ratings and bring in tons of money even if their ratio of failure is enormous. In fact, they are the ones hurting the most from Peak TV.

We’re more interested in the networks that have upped their sophistication, matching the tastes of the television watching public and critical landscape. Let’s focus on the cable networks.

Within them there are subsets. There are the prestige networks like FX and AMC (for my money, the two best networks on TV). Then there are the niche players, ranging from a powerhouse like ESPN to The Food Network, Bravo and Nickelodeon. We’re not going to get much into the niche networks but just note: They should not be ignored. HGTV’s Fixer Upper, for example, is a ratings juggernaut.

A third subset is the premium channels like HBO and Showtime, which have a different delivery and payment system than the rest.

What are the advantages to each? For FX and AMC, they have each created a prestige brand based on the success of its shows. Breaking Bad and Mad Men made AMC. The Shield provided liftoff for FX.

Peak TV
Two shows that lifted the AMC brand.

Both networks then became known for high-level, gritty programming that led for FX to roll out Justified, The Americans, Fargo and The People vs. OJ Simpson. All are terrific.

AMC had original programming before the double whammy of Mad Men (July 2007) and Breaking Bad (January 2008) gave it the identity it has now.

What’s interesting about each is that they both started as niche programmers. AMC was the place for cheesy moves from the 70s and 80s. AMC, after all, stands for American Movie Classics. (Although its definition of classic was different than mine.) FX was the place for special effects-laden action movies that had completed their theater and premium channel runs. (The name FX was actually supposed to mean FOX +, of a sort. But the movies they aired suggested otherwise.)

Therefore, each had to overcome pre-conceived notions about themselves.

To do that, each rebranded itself with an actual meaning. AMC rebranded under the theme of “Story Matters Here,” which immediately set it apart from both its past history and other networks. (The less said about its current theme, “Something More,” the better.)

FX added the theme of “There is No Box” (meaning, think outside the box). Soon, the programming each offered fulfilled their promises – that they were different and better.

Could they work as a streaming service? Well, each has a streaming app today and they are two networks that most rely on so-called second-day ratings, meaning viewership measured by DVR recordings, cable on demand and streaming from their apps. Sure, it could work as a streaming service.

Peak TVBut part of the advantage of being on a cable (or satellite) system is increased awareness and brand recognition. You have the ability to promote your new shows during commercial breaks of your current ones. While cutting the chord is becoming increasingly popular, only about one in seven Americans have actually done it.

There’s another advantage that needs to be addressed. The Internet, specifically, the online press. The critical TV landscape changed when some sites, like the now defunct Television Without Pity, began recapping shows that aired the night before. Those recaps started out as funny jibes (the recaps of Survivor on TWP were freakin’ hilarious) but have now become serious journalism.

Any website that covers TV in some fashion now has re-cappers – and that includes The New York Times.

While those re-cappers do write about the streaming shows from Netflix, Hulu and Amazon (AV Club is probably the most robust of them all), it’s what has aired to the nation the night before that gets the most ink and attention. There’s a different immediacy when recapping the day after most viewers have watched that program.

In the age of Peak TV (or, as Hollywood Reporter critic Tim Goodman rephrased it, “Too Much TV”), generating that kind of chatter and momentum puts you in the current zeitgeist. Google how many sites are still trying to find ways to recap Game of Thrones weeks after the last episode of Season 6 and you’ll get my point.

The premium channels

The dominant premium channels are HBO and Showtime, with subsets also succeeding (Cinemax, owned by HBO, and Starz). Their advantage is that they are compensated directly from the cable subscriber, a kind of Netflix with a middle man (the cable system) and a regular programming lineup.

Considering what we have examined before, premium channels would seem to have the best of both worlds. You have subscribers (like Netflix, Hulu and Amazon). You have the advantages of being on air (like FX and AMC). And, in the case of HBO, you also have a standalone streaming service available without a cable subscription.

The HBO model is the best in the industry, but you’ve got to wonder. In this era of Peak TV, does the future of HBO really look that bright?

I’d say yes because HBO built its business on the shoulders of the best brand in the business. “It’s Not TV. It’s HBO” was brilliant. It was a stronger version of AMC’s “Stories Matter Here” because it more clearly explained that HBO was different and better.

HBOIt also gave the network brand permission to do anything. It could do drama, comedy, documentary (it has the best documentary division on TV), comedy specials and movies. HBO is so good at branding that its theme for HBO GO, “It’s HBO. Anywhere” speaks to the control issue that streaming currently owns.

HBO has a model to follow, but there is another issue to consider.

The relationship between content and brand

As part of our brand relaunch process, we do a brand audit. This exercise looks at everything the brand does, both physically and emotionally, so we can be sure the brand can fulfill the promise. One of the values we examine is brand-product relationships. Do the products themselves follow the brand?

Brand AuditFor example, if the brand promise is about simplicity, do the products of the brand make things simpler for its customers? If they don’t, we tell the company that they shouldn’t create that product because the brand will become less believable. Do it only if it fulfills the promise.

How do the current networks stack up?

The interesting one for me here is AMC. “Story Matters Here” has directed the network to develop a menu of tough, interesting dramas. They may be of varied quality, but there’s no doubt that Preacher, Hell on Wheels, The Walking Dead, Better Call Saul, The Night Manager and Turn came from the same network. That’s not say they have the same style or storytelling angle, but that they fulfill the brand promise.

It’s when they networks away from their promise (if they even have one) when they struggle. For example, what does A&E stand for? Who is the A&E viewer? A&E stands for Arts & Entertainment, although the network has long dropped that association.

It has the successful Duck Dynasty (although it’s not as successful as it once was), but its lineup is littered with The Wahlburgers, Escaping Polygamy, Storage Wars and Bates Motel. The problem A&E has is that it doesn’t have a brand promise that can direct its programming. With that lineup, I don’t even know what that promise would be. This is a network in dire need of a rebrand.

Apple TV

Here’s what we know. Streaming networks have given back control to the viewer and probably started Peak TV in the process. Sophistication is in (even in comedy). And having a brand promise that is fulfilled by your programming is the road to success.

Visibility and preference win the day.

In reality, the way to create a successful network is the same process in creating a successful brand. You find the value that has the highest emotional intensity in the market (through quantitative research) and align your brand with that intensity.

The streaming services have done so well because their own models are aligned with a belief that had been increasing in intensity ever since Apple introduced the iPod: I believe things turn out better when I’m in control. That intensity has gotten stronger in the era of Peak TV.

The one thing missing in the TV landscape is a focused brand promise that is clearly stated and differentiating. Even with the positions of HBO and AMC standing tall, no one has clearly stated who the viewer is when they are watching that network.

Let’s make an assumption. Let’s pretend quantitative research demonstrated that the highest emotional intensity among viewers was the difficulty that FX President John Landgraf stated. That Peak TV means there’s too much good TV.

So how does Apple TV (or something like it) capitalize and align itself with that belief? Since we’ve been waiting years for Apple to fulfill the deathbed promise of Steve Jobs that he had “figured out TV,” we’re going to state what Apple TV should be.

It should be a portal that allows you to build your own network. Apple collects all the access to your channels and develops your own, customized network where you add shows and requests in one place. I’m not just talking about shows that appear on your cable system. It would include Netflix, Amazon and Hulu. That is, you would build your network with streaming networks, cable networks, premium channels and broadcast networks combined into one portal.

This may sound like something similar to a DVR, but not if you had the ability to have one search engine, program your networks, categorize your shows and, mostly importantly, see yourself in the brand itself.

You simply tell Apple TV (through Siri, I imagine) what you want to watch now and in the future, and it pulls it up in an interface that you control and program.

Apple CEO Tim Cook said the future of TV is apps. It’s in simplicity because right now (according to our imaginary research) viewers are overwhelmed with choices and have no easy way to navigate it all from all the sources at their disposal.

Our brand promise is that we make Peak TV watching simple because it’s the smart thing to do.

We have a brand promise and have given control to the viewer. It’s a demonstration of the way to win in today’s current TV landscape: To have a clearly defined brand. Without it, you are A&E.

In a way, I think that’s the problem the broadcast networks are having. The definitions of what describes NBC over CBS or any of the others are blurred, and often defined by on-air personalities. CBS probably has the best brand in the market but that’s mostly because it has procedurals that have many variations (such as the CSI and Law & Order series) and appeal to an older demographic.

The Peak TV show that got away.

We leave you with this. The most interesting broadcast network TV show of the last decade was Hannibal, a dreamlike expression of evil that was gorgeous and disturbing – and canceled after two seasons. It should have been a gigantic hit. But it aired on NBC and nothing about NBC’s brand gave it permission to run Hannibal. Viewers, therefore, were sure that Hannibal was a failure without seeing a frame of it.

If Hannibal had been on AMC, FX or HBO, I believe it would have been a smash.

Brand is the key to success for any business. It’s just as important in Landgraf’s Peak TV.

Facebook as news. Where will it stop?

Do we now view Facebook as news? Is it a news source?

After a live, 10-minute video of a police officer shooting a black man (Philando Castile) in Minnesota was posted on Facebook, there is a great deal of chatter about Facebook’s role in news and its responsibility because it seemed it was a media outlet posting NEWS. Facebook as NEWS has become a topic of discussion.

Philander Castille and Facebook as newsI want to say right from the start that this blog post will not touch on the footage or the event. Neither will it speak to the shooting of police officers in Dallas. This blog is about Facebook as a news organization.

Should Facebook post live videos of events? Does it have any responsibility of content? To my thinking, Facebook is schizophrenic on this subject. It censors copyrighted material. You can’t post a video on Facebook of your children at a playground if you have placed a sound bed in the background of a popular song.

Facebook wont publish it. I can’t post a photograph on my Facebook feed with text in it (like a sign that says STOP for example) because Facebook has a policy of not boosting a post with an image that contains a certain percentage of words in it. Nudity is not allowed.

Where is this going?

Facebook as news
Nick Berg

But you can post a live video of a young man bleeding to death. The images are abhorrent. No one argues with that. But where does it stop?

If Abu Musab al-Zarqawi posted a live video of his beheading Nick Berg, do you think Facebook would allow it? Not on your life.

If it did, the uproar from society would unfathomable. It seems to me that beauty is in the eyes of the beholder. Think abut this. Would nudity be OK on Facebook as long as it was a live video of a rape? Where does our voyeurism end?

Facebook is a part of our lives to be sure. But Facebook as news should not be.

Are we to blame for Facebook as NEWS?

Why has this happened? Why is it that for many, social media has become their news source?

Facebook as news and Fox NewsI know a good deal about branding. I know that a need in a target market creates demand. I know that meeting that need is a predictor of success. I know that we get what we deserve as often as we get what we need.

The real issue here is a turning away from real news and substituting it with pop-culture drivel. Broadcast news is just entertainment masquerading as news. The public gets affinity news broadcasting (broadcast news that sells an agenda and bias) because it does not want news.

It wants agreement with our own ignorance (from the root of IGNORE). In our hearts we know that what we see on Fox and CNN is not news. Its bent entertainment. Facebook as News. Cronkite never dreamed of it

When CBS decided that its news bureau needed to be a profit center rather than a public service, more than just personality died when Walter Cronkite passed away. We lost NEWS.

Think about the demise of the newspaper. Subscriptions are in decline. Reporters are being let go and readership is running for cover.

There is responsibility in live postings

Facebook as news and Marshall McLuen
Marshall McLuen

To my thinking, I am upset that Facebook posts crap like this. There is no editorial ownership, as there once was with CBS. Facebook thinks it is doing a public service by showing our lives in its raw experiential form. I think we have enough reality TV, thank you very much. I don’t need to see everything in its raw form.

I need that as much as I need the bizarre talking heads on Fox News spinning everything they report. I’m hungry for knowledge, not to witness the wost of humanity. Will Facebook spend time and money making sure that similar videos are edited for agendas? When will we be finished as a modern society of Peeping Tom’s?

I think the killing in Minneapolis would have been real news without the Facebook post. The news was not the shooting. The news was that it was “captured live on Facebook. Marshall McLuhan was right. The medium IS the message. Too bad. Too bad.

Honey Nut Cheerios Healthy Hearts

Honey Nut Cheerios hits a home run

Honey Nut CheeriosHoney Nut Cheerios is one of General Mill’s flagship brands. The cereal market is in a death spiral (read our in-depth market study on the cereal and breakfast category here) as tastes and consumer patterns change. Breakfast cereal used to be the staple food at breakfast tables across the globe but times have changed.

Honey Nut CheeriosThe venerable brands of my youth (Kellogg’s Raisin Bran, Kellogg’s Cornflakes, Post Raisin Bran, Wheaties and even Cheerios) are hard at work trying to expand the market.

Time was all of the advertising dollars was directed at kids. Even Wheaties (the breakfast of champions) was targeted at getting kids to prefer the cereal over other choices. Today, more and more brands are simply trying to expand the traditional audience by including adults in the advertising too. Most to little effect.

The reason for the failure is that brand permission does not come by simply featuring the target audience in the communication. You need to have the target audience say to themselves, “I want to be that.”

Enter Honey Nut Cheerios

The Cheerios parent brand has been talking heart healthy for many years now. There seems to be no dissenting voices in science that there are REAL benefits to oats (oat bran in particular) in the health and vitality of the human heart. But the message of heart healthy has done very little to expand the category and, while one of the more successful rebrands in the cereal market, Cheerios has continued to disappoint despite outperforming many others in the category.

But the Healthy Hearts Stay Young campaign may be a real game changer.

The commercial has the mandatory adult and child but the similarity ends here. The spots are an exuberant and charming combination of energy and brand without the usual feature of focusing only on the product. The spots are mesmerizing and are so well produced that you find yourself stopping on the commercial when channel surfing. The main spot is THAT good. The supporting spots are less powerful because it is the adult in the main commercial that is most appealing.

Stop the other branded slop.

General Mills Logo Honey Nut CheeriosThis campaign truly builds brand preference. I want to be THAT and I’m sure I am not alone. The precocious child is overshadowed by the talented adult and it is her movement and agility that holds sway in the spot. I simply can’t take my eyes off her and even see the little girl as a distraction. Despite the lack of traditional brand identification, I remembered this commercial as being all about Honey Nut Cheerios. It worked.

Scrap the silly honey bee, General Mills. He (or she) may be cute but the commercials are all about YOU and the natural ingredients. You took the bold step of making your prospects feel that they want to be part of the club and we don’t need any rational reasons why your honey came from bees. To my knowledge, all honey comes from bees.

A few words on Kellogg’s

Bing It and Uncle Buck

Bing it. I mean Google it.

Go ahead and Bing it. Sounds a bit odd doesn’t it? Yet that is exactly the phrase used in the ABC Television Series Uncle Buck. Pretty obvious that Microsoft paid heavily for the endorsement. So heavily that its product placement was imbedded in the script and not just on some cereal box sitting on a kitchen table.

Uncle buck. Bing it
The TV ripoff based on the John Candy classic

The idea of Googling something has become part of our everyday vernacular. We say it even if we use Bing as our search engine. It’s an expression based upon usage that arose form preference but means less than it did years ago when search engines were in a war for our loyalty and usage.

You know how I feel about Google— that faceless and omnipresent tyrant of what we all see on the internet. No one would like to see BING and the idea of Bing succeed more than me. But I am pretty certain that ship has already sailed. Google won and we all lost.

My issue is not with Microsoft trying to promote its Bing search engine. It has both the right and obligation to do so. My issue is with the way in which it is grasping at straws.

Bing it does not roll off the tongue

It feels so unnatural to say “I’ll Bing it” that is screams of being contrived and smells very badly of being anything but authentic. Underdogs (imagine that I am actually calling Microsoft an underdog) need to be jarring to get their message and meaning across. We tell all of our clients that the price of clarity is the risk of offense but blatant marketing is not just counter productive as it is destructive.

No one watching the show and hearing the words. (By the way this is not the first time Microsoft has placed its Bing product in media using this convention. Bing was also featured prominently in Amazing Spider-Man.) It literally SCREAMS Madison Avenue and, as a result, feels contrived and unimportant.

All we feel when hearing the words is being offended that anyone would think we are so stupid as to believe the idea. This self-definition is the heart of brand equity and is exactly what Bing wants to avoid… unimportance.

Bing it on Uncle Buck
The TV rehash of the John Candy Classic

Bing needs to relaunch its brand and revisit its algorithms. It needs to design real differences between itself and Google in a way that meets our needs in a superior manner. This requires more than just an interface. It needs to think about how Google is failing us (like bringing paid URLs to the top of the search) and provide content legitimately based upon our search criteria.

Google can’t do this because it has built a model on this revenue. Bing is just a pimple on Microsoft’s butt and it could more than match its current revenue through acquisition of customers and selling ads on the page rather than purchased and favored search results pretending to be to be important.

Read more on Google, Bing and search engines below:

Bing in 2013

Google as a monopoly

My fickle relationship with Google

Is ESPN even relevant anymore?

Disney announced yesterday that profits were up by 28%, but there was a disturbing nugget in the ensuing conference call with analysts.

Disney CEO Roger Iger had to fight off questions from those analysts about the future of ESPN, the cable sports giant that have seen subscriber losses, staff cutbacks and a general loss of brand sense over the last year.

Who even watches SportsCenter anymore?

No one is suggesting that ESPN is going away anytime soon, but the days of it dominating the sports landscape – and being profitable for Disney shareholders – are waning.

There are a handful of factors affecting ESPN, some of them the fault of the company and some not. The network had been the prince of cable TV, often charging cable companies the highest rate among all the channels available. That was because no self-respecting sports fan could live without it.

Now, as cable companies are seeing subscribers cut the cord, the number of ESPN subscribers is dropping because of that trend. In turn, advertisers are looking elsewhere to spend their money, such as in streaming services (Hulu), social media (Facebook, Twitter) and sponsorships.

ESPN was once the bully, but now it is becoming the weakling at the beach. It has laid off hundreds of workers, closed the sports and culture website Grantland, and found itself in competition with other sports networks, such as Fox Sports 1.

ESPN is its own worst enemy.

All those issues can be attributed to market shifts, and ESPN has responded with its own streaming app and continuing to dominate certain sports, like college basketball.

If you look deeper, though, you see that ESPN just simply isn’t all that important anymore. Ratings for SportsCenter, its flagship recap show, have lagged and individual sports leagues (such as the NBA, NFL and MLB) have their own highlight channels.

I was once a faithful viewer of SportsCenter, but I rarely watch it anymore. For one thing, the Internet (primarily, Twitter) has become timelier than SportsCenter. For another thing, I’ve grown weary of its analysts who add nothing to the sports conversation. They are simply boring. You have former athletes who are mind-numbingly predictable or you have the nut job yellers (Stephen A. Smith, Skip Bayless) begging to be seen as important.

ESPN used to know who it was for (and who it was not for). It had wit. (Think of the Dan Patrick/Keith Olbermann SportsCenter broadcasts.) It was akin to David Letterman in the stuffy sports world dominated by the big networks.

Now, it’s just…blah. Market forces are hurting ESPN. But it would help itself if it did the difficult work of finding out what makes it different in order to be culturally relevant again.