Ask media owners what business they’re in, and they’ll say the content business — that they are storytellers, and that their companies are well positioned for the future because “content is king” and there will always be demand for great content.
My question for today: Even if the demand for premium video programming continues to grow (and I believe it will), is a content-centric strategy the best one for today’s TV media owners?
Clearly, this strategy has played very well for CBS, which has done a masterful job leveraging its studio and programming for incremental, ongoing revenue streams. But will this work for all TV companies?
Last week, Discovery’s David Zaslav questioned whether TV companies may have jumped a bit too fast to sell shows to streaming video outlets like Netflix and Amazon. And what about the the current state of movie studios?
Can great video content continue do well for TV companies if it is unbundled from their current promotion and distribution platforms?
Great content can capture big audiences. Of that there is no question. However, many would argue that TV companies have also been able to generate decent audiences — certainly when compared to pure digital companies — sometimes with even average content.
The power of TV companies’ built-in distribution and marketing, and the passiveness of TV audiences, can sometimes deliver numbers just by having content on the channel. This phenomenon never happens in pure digital channels.
TV companies need to be wary of what happens in the future if they walk away too quickly from their legacy distribution power.
And, most critically, TV companies can’t let being a content-centric company distract them from the extraordinary power and they bring to advertisers and the economic clout they deliver. Streaming video on demand today delivers a much, much lighter ad load than linear TV delivered conventionally.
We may all believe ( I do) that the future of TV advertising will be about delivering fewer, more relevant ads. However, we may not want to overly encourage today’s linear TV viewers to prematurely abandon that world for the streaming world, where there’s just so many fewer ads — and much less ad revenue potential.
Yes, content is king — but let’s not forget that in TV, distribution is still King Kong. Focusing on great content production is a critical and smart long-term strategy.
However, it shouldn’t be pursued mutually exclusive to maximising the power of the legacy distribution and advertising power of TV. Once that goes away, it can never be rebuilt. Let’s not make that happen before we have to. What do you think?
Dave Morgan is the CEO of Simulmedia in New York. Previously, he founded and ran both TACODA and Real Media.This post was first published by MediaPost.com and is republished here with the author’s permission.
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