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.

Aligning IT providers. Who is eliminated?

IT (Information Technology) is changing

It is no secret that Information Technology continues to evolve. Both IT providers and their clients continue to adapt to the ever-changing needs of stakeholders. These needs run the gambit from outside security threats to device migration to application development to alignment with the organizations strategic goals.

As demands for IT providers continue to change, so do the IT departments they serve. In a nutshell, the internal IT departments are becoming irrelevant.

OracleThe dilemma that IT providers, like Century Link Business or Oracle, face: How to overcome the hurdles that internal IT personnel present and be preferred by them and the C-suite? Put in blunt terms, can IT providers do more than just soften up internal personnel for the kill?

I know. Many of you are asking why would IT providers even care what those their technology is replacing thinks?

The simple answer: To gain new business, IT providers have to overcome a litany of hurdles. The C-suite needs to understand why they need this technology. It also will wonder if outsourcing important data isn’t a Mr. Robot situation. It will also want to know why your company is the right one when they are so many competitors thirsting to win that business.

Overcoming those hurdles means you need an ally.

Internal IT employees can be your friends

IT was once a novel thing, something that few understood so companies were forced to hire IT experts as employees. Otherwise, you’d be out of business fast.

IT employess for IT providersNow, though, IT is no longer the domain of just computer geeks and nerds. CEOs understand IT. Maybe not the individual details, but they know what IT accomplishes and the advantages of hiring third parties to host servers and troubleshoot any problems.

Companies, therefore, are turning to the cloud for a whole host of services they traditionally relied on their internal IT departments to handle. These managed cloud environments are doing everything from app development to analytics to storage to security. Logging into a web application with just a few clicks can even launch enterprise-wide software deployment. Cloud services manage entire corporate IT infrastructures  – and do it more cheaply.

This is a boon to the IT services companies, but the process of being hired is complex. The fewer hurdles you have to overcome, the better.

It’s easy to say that IT service providers have it easy during this phase of evolution. They are the ones benefiting. And they know that IT professionals are in effect training the person that is replacing them. Human nature is to dig your heels in and protect what’s yours. IT professionals are not signing on with this change willingly.

This is the quandary for IT service providers. They want to pull more and more of the workload from the traditional IT department to cloud-based services. But, in order to do so, they must not alienate those IT professionals they will inevitably replace.

IT providers must realign their brands

For many years, IT industry buzzwords floated around like big data. In some ways, the term big data was a reflection of the companies that helped create it, such as IBM, Cisco and SAP, just to name a few. Up until a few years ago, these companies focused mostly on creating things (software, infrastructure, etc.) that is used in the corporate environment. Though always viewed as big, their work wasn’t a threat to IT administrators. It was viewed as a means to increase the importance of IT departments within the organization. Perceptive IT departments could identify what the next big thing was and use it to almost justify their existence.

Today, their size and expertise are exactly what corporate IT departments are tying to sell against in order to maintain their relevancy.

So, what are IT service providers to do? The movement to the cloud is clearly a wave that won’t likely ebb. But these companies can realign their brands to make the change a bit more palatable to those they are going to affect. They should demonstrate that their technologies would make the jobs of internal IT employees easier. More importantly, they should demonstrate to the C-suite that, in order for the new technology to fulfill the unique needs of the company itself and that means involving internal IT employees.

In effect, your technology can make those employees more important.

The caveat is that, in realigning their brands, IT service providers must not appear to be pandering. Be single minded and aspirational, particularly to those IT professionals who present the most significant hurdle. Don’t tell them what you think they want to hear. Rather, take a systematic and analytical approach so that you understand this audience better than any of your competitors.

 

Twitter and its Trust and Safety Council

I enjoy Twitter about as much as I do Jim Carrey films. For those of you who do not know me, that means not at all.

Twitter
Twitter does need some policing.

Maybe it’s this heightened level of disdain that prompts me to write so often about it. Scan back over our blogs and you’ll see impassioned rants about Twitter aging at a breakneck pace, its #music missing the necessary attributes to be successful and its quality control needing examination.

As I shared once before, I use Twitter (@BrandGenius). But I do so because I feel I have to rather than want to. Part of my apprehension is due to the responses I’ve drawn from unsolicited “trolls” (a person who posts a deliberately provocative message with the intention of unleashing cynicism).

I am not alone in my angst about being tormented on it. This prevailing potentiality has prompted Twitter to launch an initiative called the “Trust and Safety Council” to protect its users such harassment or abuse.

Twitter needs a rebrand.

Let it be known. I think the “Trust and Safety Council” effort is wonderful. There are hundreds of millions of tweets sent a day. Surely, it’s a difficult process to filter through that lofty amount of messages, “Strik[ing] the right balance between fighting abuse and speaking truth to power” as Patricia Cartes, the head of the initiative, shared.

The problem, however, is the damage has already been done. The genie is out of the bottle and no matter how hard it tries, that genie can’t be put back.

Twitter has a very arduous road ahead. To most, it serves as a lair where one can be easily prayed upon, and that sense of wrongdoing hasn’t been forgotten. This is an undertone that is going to be difficult to shed.

For that reason, Twitter desperately needs a complete rebrand. An overhaul from the bottom up that is grounded in trust, acceptance, self-control and respect.

Maybe then I would grow to like it more than I do Ace Ventura. But that’s not asking for much.

The saga of a phantom U-Verse deal

Just yesterday, I found myself calling the AT&T customer service number. The reason for that? The day prior, I was paying the U-Verse (AT&T’s internet option) bill and noticed that AT&T was offering a deal for the 1GB GigaPower network option — for just a dollar more than I was paying for basic internet service.

This is what the link took me to. As the U-Verse link showed, that deal was plain as day. Right?

U-Verse
This U-Verse deal looks legit, right?

The deal seemed like a no brainer. For 36 months, I could relish in the quickest internet option AT&T has to offer. As is my style, I had to have it.

So I called customer service attempting to upgrade the U-Verse service. Forty-five minutes later, I was hanging up up on the sales rep, angry and resentful over all the time I wasted.

Clearly, AT&T was ignorant of the U-Verse deal.

I wasted the first five or so minutes of my call attempting to figure who I needed to speak with by way of a puzzling automated service. My safest best was with U-Verse “customer service.” There, a foreign voice greeted me. She knew nothing of the deal I was speaking of and, after putting me on hold twice, elected to send me over to “technical support.”

The fellow on the other end of “technical support “ knew nothing of the U-Verse deal as well. He asked a ton of questions, to which I continually replied: I just want the deal that’s on the website. After placing me on hold, he prodded me along to “sales.”

My new phone companion could barely audible — interesting, considering it was a phone company I was connected to. That and he seemed as coherent as David Crosby circa Woodstock. The sales rep asked me to explain to him the U-Verse deal I was referring to, all the while insisting there was no such thing in a half baked kind of way. To which I assured him, it was on the website, plain as day.

Time dragged on and, while I was not finding any luck with the Internet, I was offered a discounted rate on TV twice and a more expensive internet with lesser GB – to which I responded by hanging up the phone. Probably not the nicest move, but I was heated.

At this juncture, a thought raced through my hot head: “I should just cancel and go with Time Warner.”

But then, “Time Warner is more expensive than what I have with AT&T.”

So I stayed put. Interesting, huh?

U-Verse
Despite the problems with U-Verse call, I stayed with AT&T.

Switching triggers are important in influencing purchases but they can only be effective if barriers are reduced. With my Internet, the only emotion driving me is price. Even though I was pushed around and made angry for an hour by an inept group of customer service reps, I decided to do nothing about. The idea of cancelling services to join another just seemed worse than what I just went through.

The factors that are driving my Internet choice are primal. My basic needs overshadow any willingness to affiliate with a brand. That’s because none of them hold any deep meaning with me.

Which leads me to this. Internet providers take heed: all you need do to steal share is make your brand emotionally worthwhile to the consumer and reduce barriers, and they’ll find the reasons to switch.

NFL Yahoo live stream a success

The numbers are in and it looks like the NFL Yahoo live stream was a success, foretelling what could be the future for all sports – and a potential blow to the cable TV giants.

The NFL reported that the Buffalo-Jacksonville game, played in London and streamed for free on Yahoo Sunday morning, attracted 33.6 million views, including 15.2 million unique visitors which is more than what Monday Night Football typically attracts (13.5).

The NFL makes its first move into live streaming.
The NFL makes its first move into live streaming.

Now, there’s no reason to get too carried away with this development, as the broadcast networks are not going to give away broadcast rights to NFL games because they are ratings nirvana. (Even Sunday’s London game used a CBS crew.)

But the NFL Yahoo live stream is the start, at least for the NFL, in decoding the last piece of the puzzle cable TV systems have clung onto for hope: Sports.

As Brian Rolapp, Executive Vice President of Media for the NFL, told Sports Illustrated’s Peter King: “We’re a lot closer to the Internet being a real, legitimate distribution platform for NFL games than we were one or two years ago.”

Other sports have already switched to this model with the NBA and MLB both having streaming services for all its regular season games, and I’m sure the NFL will be working with TV networks to have something akin to those – for the right price. (Even college sports have Internet avenues.)

NFL Yahoo live stream is just the start.

More of us than ever are cutting the cable cord, even though studies show that doing that doesn’t save all that much money as your streaming subscriptions pile up. But the one area the cable cutters hadn’t figured out was what to do with the NFL. Unless you sign up with DirecTV, you were pretty much chained to Comcast, Time Warner Cable or any other cable TV provider.

But you can see how things might play out now. I watched the second half of the NFL Yahoo live stream on my iPad and I must tell you. I surprised at the high quality of the NFL Yahoo live stream video and actually enjoyed the experience. (It helped that the game was competitive until the very end.)

It called to mind what Tim Cook said at the most recent Apple event, noting that the future of TV is in apps where viewers simply choose what they are going to pay for. When HBO entered the app fray, charging customers a fee even if they don’t have a cable TV or satellite subscription, you knew it was only a matter of time until everyone else followed.

It still will be some time before cable TV and satellite providers are completely shielded from the sports mix, but viewers’ tastes are changing. When you can watch an NFL game on your iPad at 9:30 in the morning, you know the networks, the NFL and various Internet platforms are not waiting for the old providers to catch up. The NFL Yahoo live stream is just the beginning.