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
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.

Hannibal
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.

How Netflix has killed the sequel blockbuster

The present-day adage is that there are no original thoughts anymore. That is, if something has been done or created today, there was probably a template for it earlier.

I tend to agree, although not to the extent that many do. Variations on a theme can still be original and, especially in art forms, there is a constant evolution of what has come before.

But it seems that movie audiences are screaming for more originality. Many recent so-called blockbusters have been sequels, ranging from Alice Through the Looking Glass, X-Men: Apocalypse, Teenage Mutant Ninja Turtles and many more.

And they are bombing.

Netflix
Audiences are rejecting the blockbuster sequel in favor of Netflix.

Even a sure thing like Independence Day: Resurgence had a disappointing opening over the weekend. (Note: There are always exceptions that prove the rule. Finding Dory is doing well.)

It would be easy – and probably correct – to pile on the movie studios who have become so dependent on the gigantic sequel blockbuster that execs are being fired right and left after those movies failed. (Even Steven Spielberg warned against this a few years ago.)

But that’s always been a fair criticism. Like many businesses, the movie business is a copycat category.

Netflix has taught us to expect more than the generic.

What is interesting to me is that audiences are rejecting these paper-mache films. And I have a theory. You can blame it on Netflix.

Some recent reports have suggested that the original content on Netflix is more popular than many had thought. Netflix, because it is not beholden to advertisers, does not release viewing numbers but its approach seems to be working. Each individual show – or even movie – that Netflix releases on its platform is not geared to appeal to the masses. Netflix’s strategy is to segment its audience so it has something for everyone, but not one thing for everyone.

Netflix
Netflix has changed what we expect from our entertainment

It knows that few, if any, of its shows will appeal to everyone. The strategy is that if you’re into at least one of its shows because it appeals to your individual taste, you will stay a subscriber or become a new one. In essence, Netflix is producing the middle-cost production that was once the foundation of Hollywood.

Therefore, if Netflix is the dominant viewing platform of this era, then audiences have been taught to seek out things that are less generic. This is why the big TV networks are struggling and the major sequels are losing steam at the cinema.

The trend in the market means that movie studios will have to adjust, as their once-dependable staples no longer fit the appetites of a Netflix-watching audience.

Companies across all sectors are often slow to adapt to changes and it often takes an outsider (like Netflix) to take advantage of changing attitudes.

I think that’s what has happened here. Experts all over are trying to predict what viewing will be like in the next decade or so, but it seems the biggest content providing companies (the studios) are the ones who understand the new audience the least.

Hulu ups the TV ante

Details are sketchy at the moment, but Hulu announced last week that it will unveil a TV streaming service next year that shows live programming, including sports.

Hulu CEO Mike Hopkins confirmed that the streaming service is negotiating with Fox, ABC, ESPN, FX and the Disney Channel for a service that doesn’t require a cable TV subscription.

Hulu
Hulu will unveil the next step in TV programming next year.

This is another crossing of the Rubicon in the changing environment of how we consume TV programming. Many of us have already cut the cord with cable TV systems as viewers grab control of what they are offered and what they pay for.

Unless you are a sports fan, it’s probably just easy enough to subscribe to Netflix, Hulu, HBO GO and Amazon and be done with it. You don’t get live programming and Hulu shows day-old shows from the networks it has agreements with, but a new live streaming service is the logical next step.

The cable networks have responded by beefing up its On Demand services so that you get episodes of the network TV shows you subscribe to. But live programming from Hulu will trump that.

Hulu and sports?

The interesting part of this is Hulu’s inclusion of ESPN. Sports have been the key in cable TV remaining relevant because any sports fan needs cable TV or satellite TV to watch the major sports. (Or even the minor ones.)

Right now, ESPN does have a viewing app for its programming, but the app still tied into having a subscription to a cable or satellite TV service. It’s only a matter of time until it goes the HBO route and allows you to subscribe directly to the network.

Additionally, I would expect many networks to follow suit along with the streaming services themselves. What’s to keep Amazon, for example, from adopting a similar live programming framework? Or even Netflix for that matter? Or even NBC? (CBS already has something similar.)

In essence, the streaming services will become their own cable TV systems but at a lower cost. If there’s anything that has prompted the cable cutting more than anything it’s the high cost of cable and satellite TV.

Or at least the perception of the high cost. Consumers, even if they end up paying as much with all the streaming services, like the illusion of control that streaming services offer.

Cable and satellite TV fees feel imposed, while the streaming services feel ordered.

Just wait. It won’t be long until you will be able to watch the Super Bowl or the Olympics, the biggest sporting events, without subscribing to a cable or satellite TV service. Then what will Comcast and Time Warner Cable do?

Game of Thrones feels like a soap opera

Game of Thrones returned to HBO a few weeks back

Game of ThronesLike most fans of the series Game of Thrones, I could not wait to watch. I’m a fan of the show but will readily admit that I am not as committed to it as I was with The Sopranos, the Wire or Deadwood.

But, I am a fan and tuned in a couple of Sundays ago to get my fix. Heck, I even watched the last season again to make sure I did not miss anything. I think, as I look back over the last two episodes, that HBO is the one that missed something.

The show has famously killed, maimed, mutilated and devoured favorite characters in the past. That was part of its appeal. It was unpredictable because characters that you thought vital were wrenched from the series with such a regularity that I found myself second guessing who was next to go. (That, of course, was the point of the George R. R. Martin series of books. It upended the themes of traditional fantasy stories.)

Character is fungible

Deadwood vs Game of ThronesI recall how sad I was to see Keith Carradine’s powerful portrayal of Wild Bill Hickok in Deadwood end in that series, but Wild Bill was actually killed at a card game in reality. I felt that the writers needed to move on if they were to follow any semblance of historical accuracy.

George R R Martin Game of ThronesGame of Thrones is a different story. The entire series resides in the head of George R. R. Martin. There is not natural precedent to follow as to the story line. You have to dive in and accept that this writer knows where he is going.

My son has read all the books and informed me earlier this year that the TV show has now outpaced the novels. It appears that we are looking at a storyline that has become a screenplay rather than a literary work. Does it matter? I think it might.

Game of Thrones. Why am I left wanting more?

Game of ThronesThe other day my daughter-in-law asked me if I was watching the Game of Thrones. I told her I was.

She said to me in eager terms that she could watch more than one new episode on Sunday nights if HBO arranged for it. That idea… of needing more than an hour on Sunday has made me think.

Game of Thrones has been reduced to a poorly written soap opera. I say this because I hear my mother-in-law going on an on about The Young and the Restless and all of the storylines that seem to go on and on ad infinitum.

So many characters are in play that each and every character seems to take but a half step ahead on each episode.  On those rare occurrences when she is vacationing for a few weeks and misses the show, she can pick right up from where she left it without missing a beat.

The Young and the Restless

Game of Thrones is a soap operaThis season of Game of Thrones seems the same way to me. It feels a lot like The Young and the Restless. Dozens of story lines all moving forward at a snail’s pace. The reason my daughter-in-law craves more episodes (like binge watching) is because each episode on its own is disappointing. Not enough happens beyond the cliché shock ending.

Brands live and die based upon the self-identification of the audience or target. I am beginning to feel a bit self conscious that I am investing so much in a serial program that feels a bit out of touch with the values I hold dearest. I don’t watch soap operas.

John form Cincinnati and Game of ThronesI’d like to think I demand more from my TV attachments. I won’t turn my TV off on Sunday nights and will probably forge on with this season— hoping that it improves. But, if it does not, this is certainly my last season.

I thought the talent lied in the acting and the power of George R. R. Martin’s writing. However, I remember that the Deadwood writers stopped the series in mid-stride to sart a new project and Game of Thrones is beginning to feel a lot like John From Cincinnati.