The Dish Tribune war only affects Dish

If you are a Dish subscriber, you are well aware of the Dish Tribune Media dispute, with Tribune owning 42 local stations and WGN America. All Tribune Media stations went dark on Dish on June 12th.

This is bad for both brands, but terrible for Dish.

Dish Tribune
The Dish Tribune dispute puts the onus on Dish, not Tribune.

At issue is the price Dish is willing to pay Tribune to air its stations. Depending on which side you are on in the Dish Tribune war, Dish claims that Tribune wants more than its worth and Tribune claims that Dish is not negotiating in good faith because Dish is not willing to pay the same that other cable and satellite providers are paying.

The beliefs in the Dish Tribune dispute.

If you have read anything at all on our site, you know that what is actually true takes a back seat to what is believed. From a consumer’s perspective, subscribers of Dish believe they are the ones being punished and it’s Dish, not Tribune Media, that doing the harm. Needless to say, Dish customers are complaining to whoever is listening. If you believe Tribune, nearly 300,000 subscribers left the satellite provider in the second quarter alone.

From a business perspective, I understand that Dish wants to get Tribune as cheaply as possible. (It also doesn’t help Dish that it’s behind DirecTV and some cable providers in subscribers, meaning it doesn’t have the cash others do.) I also understand that Tribune wants to get paid at the same rate it does from the rest of the TV providers.

As a customer, therefore, I get angry at the company I am paying each month to bring me the content it promised to deliver. I think most consumers believe they are paying too much for the television programming already, which is one of the reasons so many people are cutting the cord.

What does Dish accomplish by telling its customers that the Dish Tribune dispute is the fault of the content provider? Does it expect its subscribers to stand up in support?

Dish has a serious brand problem. Its promise to deliver content has failed. The belief is that Dish is wrong and that Tribune is being reasonable.

Since a lot of Tribune Media stations air NFL football, subscribers will be forced to watch the games elsewhere when the season beings in a few weeks. At that point, it will be too late for Dish.

Peyton Manning the pitchman has not retired

Football is about a month away, Peyton Manning is retired after winning the Super Bowl but he isn’t going anywhere.

No, he’s not suiting up for the Denver Broncos or any other team. As the numero uno pitchman among athletes, Peyton Manning will still dominate the airwaves in the many commercial breaks during the NFL season.

For some time now, he and his brother, Eli, have been front and center in DirecTV’s NFL Sunday Ticket ads and, like other brands, DirecTV has found celebrity nirvana in Peyton Manning.

I’ve often said that brands need to be wary of celebrity spokespeople because being intertwined with that person that can be damaging. Imagine what would happen if John Schnatter (Papa John) was involved in some scandal. The brand would be in trouble. In addition, having a celebrity so involved in a brand is also kind of lazy. It’s doing the hard work of brand building the easy and often less effective way. (It can also be a short-term solution.)

What Peyton Manning brings to a brand

But even I have to admit that sometimes the celebrity endorsement works if the personality of the celebrity meshes with that of the brand. Matthew McConaughey’s stylish calm works perfectly with the Lincoln brand and sales have increased since McDonaughey has been the face of the brand.

Peyton Manning is a different animal. He is one of the most accomplished comic actors among sports athletes that I’ve ever seen. He is understated in a kind of dorky way that makes him immediately likeable (“Cut that meat!” Cut that meat!”) and easy to identify with.

In fact, the coming campaign of DirecTV featuring Peyton Manning might be even stronger now that the star quarterback has retired from the gridiron. It puts him in the same place the rest of us are: Watching the games instead of playing them.

I’ve enjoyed Peyton in commercials but wondered if his personality matches up with all the brands he fronts. He wouldn’t be able to sell Lincolns the way McConaughey can, for instance. And you wonder if the Peyton Manning brand is so stretched too thin over numerous brands that he becomes less believable.

Now, with a DirecTV campaign that features him wearing his bathrobe and watching TV he becomes a better face. The face of the NFL fan.

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.

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?

Dish Network earnings, lost market share

Talk about spin control. Today’s Dish Network earnings announcement touted that its profit doubled in the first quarter to $351 million, beating analysts’ estimates.

So, you think. Wow. How did that happen in today’s market in which streaming services are taking more and more market share from cable and satellite TV companies?

The answer: Profits may be up, but market share is down. You see, Dish actually lost 134,000 customers but only boosted its profits by increasing prices for its current customers. Now, that’s a fine way to fill the pockets of company execs.

How Dish Network customers may be reacting.
How Dish Network customers may be reacting.

But it speaks to what’s wrong at Dish and many other companies, whether they are in the TV delivery system business or not. When a company is public, beholden to shareholders, the future is simply the next quarter, not years down the road. So, to keep their jobs, CEOs enact short-term changes to ensure that the next quarter’s earnings look good.

Of course, it’s only a matter of time until that strategy catches up with them. Many floundering companies approach lost market share by raising prices (to increase profits) or laying off employees (to cut costs). In some cases, these may be needed adjustments to keep a company afloat.

Dish Network vs. DirecTV

But what stuns me is that there’s little effort to look beyond what’s happening in the next quarter. The important way Dish (and anyone else concerned with lost market share) can take back market share is to become more relevant to target audiences. For the long term.

My guess is that Dish isn’t just losing to Netflix, Hulu and Amazon. But also to DirecTV. You can sense it in Dish’s current marketing campaign, which says you get the same thing at DirecTV, only at a lower cost. (Although, based on Dish’s recent price increase, that may not be for long.)

The spots are defensive because they suggest that DirecTV is the market leader. But Dish and other companies need to know that switching for a lower cost isn’t a very strong switching trigger.

We’ve done research in various industries in which emotional reasons (and some rational ones) often trump low cost as the reasons why consumers choose. They don’t choose for the lowest cost because most of us believe you get what you pay for.

Dish isn’t going to stave off its lost market share by standing on low cost (while increasing prices) or showing off The Hopper, which is the same DVR technology that just about every cable and satellite TV company offers.

Even in light of Dish’s first quarter announcement, Dish is becoming less and less relevant, and its lost market share will catch up to its bottom line eventually. Saying you are the same as the market leader just says you aren’t good enough.