Last week in my Network T.V. Management class at UCLA, our guest speaker was a high level executive at ABC Primetime. He spoke to us about the business side of broadcast television--how the audience of any given show is basically "sold" to the advertisers who then invest in a show for its guaranteed spectatorship. If a show is getting good ratings in the 18-49 demographic, for example, the network will then be able to charge more for the increasingly sought-after commercial ad space. As we all know (or should know), advertising via audience “labor” is the bread and butter of T.V. financing.
A massive spoiler appeared on the horizon a few years ago, however, and its name is DVR. Tivo and friends have altered the industry’s economic landscape in striking ways, and T.V. executives are scrambling to figure out what to do about it. The problem is that with DVR technology, people are able to fast-forward through commercials. And they do. I do. Advertisers notice this and are increasingly demanding that the networks do something about it. Consequently, ABC Primetime has taken the revolutionary step this fall season of being the first network to sell ad space based solely on commercial ratings.
In a nutshell, this striking shift means that ABC (and perhaps the other networks soon) will measure a show’s economic feasibility based only on who is watching the commercials—not the show itself. What does this mean for you? It means that if you use DVR to fast-forward through the commercials of your favorite show, you might as well not be watching (at least in the eyes of the networks, who are always looking for excuses to dump underperforming shows). This may be a bitter pill to swallow, but I'm afraid it is true: your favorite television shows are in danger if you do not watch their commercials.
More generally, however, this shift represents the frantic defensive maneuvers being undertaken by beleaguered media industries in the face of technology and changing audience patterns. Hollywood is trying to adapt its old framework to withstand the erosion that things like DVR, on-demand, video iPod and other technologies are causing. Their worst fear is to become the lame-duck recording industry, which is all but dead now because of its blatant refusal to work with and through new technologies.
It remains to be seen whether or not the ad-based network T.V. model will survive the digital age, and maybe it shouldn’t. Maybe we should be even more purposeful about fast-forwarding through commercials on our Tivos. Maybe we should send the message that the days of “commercial breaks” are over—that we will no longer tolerate being passive ratings demographics or dollar-sign statistics in the ugly ratings wars. Of course, we’d have to concede a trade-off in some way—most likely the acceptance of brand-integration and product placement within our favorite shows. After all, these shows need to be financed somehow.
All I know is that the future of television is completely up in the air (as are the futures of most other media industries), and we the audience will have an ever larger role to play. I have much more to say about it all, so stay tuned…