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.

Pop Culture lives on coolness

Pop Culture relies on fashion sensabilitites

Volkswagen as pop culturePop culture is a risky brand business. I heard a report this morning on Marketplace about Volkswagen. Basically, the report focused on the effects of the VW settlement on the automaker’s product development pipeline. The reporter stated that the multi-billion dollar settlement would make the Volkswagen new model pipeline a bit bumpy. He said that it might put a crimp on the innovation that VW hopes to achieve to keep their product line COOL.

Cool is a scary word for me in the branding business because the idea of cool is all about making a connection to an aesthetic sensibility that is connected to personal taste in an odd way. In some ways, maybe many ways, cool can be defined as a fad.

Cool is hard to bank on in pop culture

What was cool yesterday in pop culture may not be cool today. What was once considered cool can digress into downright kitsch. If you want proof, take a trek to Graceland and – aside from the greatness of Elvis’s talent itself and the voyeuristic thrill of peering into the private life of a celebrity – you’ll find that there is NOTHING in that mansion that we covet today.

Graceland is Pop cultureWe don’t want the blue shag rugs or the clumsy devices that passed for high tech in the day. What was once cool (and even, in the case of Graceland, where no expense was spared) is just a pile of dated junk. Pop culture cool just does not have legs. Cool by definition is mercurial.

Apple used to be cool. Much of that coolness came from the charisma and genius of Steve Jobs. Since his death, Apple is just innovative and has yet to hit the mark with the same coolness that Steve naturally oozed and made Apple products de rigueur.

Cool can be a goal for some brands. But hitting that sweet spot is a difficult task in pop culture. Predicting success is even more difficult.

Recognizing what is cool and developing product to that standard is near impossible. The parent brand can deliver permission for its coolness but adoption of that next cool thing is more about happenstance.

But it is not just a problem with Pop Culture

Movies as pop cultureThink about this for a moment: The major movie studios try to produce blockbuster movies. While they may not use the word cool to describe their intent, you certainly would not be stretching the definition of coolness by thinking about it in terms of a movie’s appeal.

What interests me here is how often the movie industry misses the mark. The studios invest millions of dollars in a script, director, cinematographer and proven stars and still turn out a BUST. You would think, with all of their resources, they would have more hits than misses. But predicting popularity is that near impossible.

Brands that make their reputation and mark by being considered cool are only as valuable as their latest iteration. The rest is left up to chance.

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

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.

The jealousy of George Lucas

Everybody seems to enjoy Star Wars: The Force Awakens, including me.

I also loved A New Hope and The Empire Strikes Back.

The Return of the Jedi, eh. You can take it or leave it. I was lost on the giant-sized Teddy Bears (the Ewoks) and the grotesque Jabba the Hutt.

As for the recent prequel films, you couldn’t pay me to sit through another ever again.

George Lucas
The dark side has reached George Lucas.

Considering these films, minus The Force Awakens, producer, director and writer extraordinaire George Lucas hasn’t exactly hit a home run for quite a while, has he?

Which was why I was perplexed over his jealous rant on Disney and the new Star Wars episode to Charlie Rose.

The words of George Lucas reek of jealousy.

Granted, Lucas has since apologized for calling Disney “white slavers” and for chastising the new film for being “too retro”and not about “story.” But stinging words like these can’t be forgotten.

George Lucas himself wasn’t the shining light of creative power after Jedi with the re-released versions of the classics that were speckled with unnecessary digitized creatures to the over-done work of the prequels.

In the end, Lucas sold his rights to the franchise over to Disney for billions of dollars, and it’s probably a good thing he did.

Ultimately, what irked me so much about Lucas’ diatribe was his inability to recognize his brand and his past blunders.

For Star Wars fans, George Lucas is an enigma, even though most of the movies he made were not all that great. He is the creator of fascinating worlds brimming with morality tales, mythology, and faith. The uber fans see Lucas as the hub for all of this creative brilliance — all the more reason to act better.

Yoda said it best: “Train yourself to let go of everything you fear to lose.” It surely seems like George Lucas is having a hard time letting go of what he is most afraid of losing. His precepts are all amuck and he could use a healthy dose of the “force”to get back to reality once again.