: The deadline
for purchasing discount tickets to TVOT NYC 2015--representing a $200 savings on the full ticket price--is midnight, Saturday October 31st
. Buy your discount tickets here
For a recent workshop that I ran for a client, I invited some real honest-to-God "Millennials." I wanted to give the group a reality check for what lay ahead.
Because--and this is a shameless plug for my panel at TVOT NYC on December 3rd
--"The Future of Television is the viewer; those who ignore that do so at their peril
." And we are going to have a blockbuster panel at the SVA Theatre on West 23rd:
- Tony Goncalves, AT&T Entertainment & Internet Services
- Maitreyi Khrishnaswamy, Verizon
- Adam Lowy, Dish and Sling TV
- Evan Silverman, A&E Networks
- Luc Perreault, The Weather Network
- And a special appearance from a student from NYU's Stern School of Business (where I recruited participants for my client workshop), just to keep us honest.
One thing I learned, and we will all discuss on December 3rd, is that our consumers have absolutely no qualms about sharing their sign-on credentials for subscription-TV services: Netflix, Amazon, Hulu, HBO, Showtime and all the others. Including, for the few Millennials who actually subscribe to traditional cable, satellite and telco packages, their own TV Everywhere authentication credentials.
Easy-peasy. No big deal. It's the way things are.
At a panel I moderated at Digital Media Wire's Future of Television conference in October, Parks Associates Director of Research, Brett Sappington, made the point that, among Millennials, it is considered bad behavior to NOT share your pay-TV credentials. Those who do not share are ostracized.
In the Parks Associates whitepaper, "The Cost of Piracy," analyst Glenn Hower writes: "Respondents showed no guilt or embarrassment when admitting to accessing others' paid services." And he goes on to quote one college student:
"I probably wouldn't pay for my own. If my parents dropped, I'd use a friend's password. If they dropped, I'd use a different friend's password. There's like an infinite number of passwords that I could use and not pay for it."
One gal that joined my client's workshop had a particularly interesting approach. She and a group of friends from her youth shared a number of TV subscription services: Netflix, Amazon Prime, Hulu, HBO (from cable), and a couple others. Each gal paid for one subscription, and shared the credentials with the rest.
Of course, they had to juggle who watched when, because some of the services wouldn't allow simultaneous sign-ons from two different devices. And there is a decided cost/benefit issue there: "It's free, so I can wait." And since there was little live streaming involved in their shared "bundle," there was usually something to watch, somewhere.
But that was clearly an annoyance.
What was also interesting is that they only shared within their circle; it was strictly verboten to share outside. One of the reasons was shared playlists. They have a "single" Netflix subscription, and everything each of them watches ends up on the playlist. So you can get a lot of "Ewwwww....you
Doctor's Note: If you have a "Hello Kitty" fetish, it's probably best not to share your playlist with your co-workers.
But the other dynamic of shared playlists is more interesting: "Oh, you watched that? How'd you like it?" That's a kind of very personal, one-to-one recommendation that can be extremely valuable to the television industry, if it could be harnessed.
It is axiomatic that one of the strongest consumer benefits of subscription television is the unexpected delight; you never heard of it, somebody told you about it, and you loved it! Get one or two of those per month and that subscription fee is a lot easier to swallow.
Another aspect of credential sharing is sampling. In early 2014, HBO CEO Richard Plepler was quoted by BuzzFeed: "It's not material to our business, number one. It's not that we are unmindful of it, but it has no real effect on the business. To us, it's in many ways a terrific marketing vehicle for the next generation of viewers, and it is actually not material at all to our business growth."
In retrospect, what HBO may have been doing was tolerating extended free previews of HBO Go in preparation for their own OTT subscription service, HBO Now. And from all indications, it worked. HBO Now is yet another HBO juggernaut, driving the OTT business the way HBO's traditional linear service drove Cable Television decades ago. In fact, we just saw an announcement from Charter that they are testing a bundle of local broadcast channels with HBO Now, as I forecasted in my July 28the, 2015 column:
And that brings us to the third benefit of the shared economy: retention.
Let's say I am sharing a Showtime subscription with a friend, and that friend is a big fan of "Shameless," and after the current season of "Shameless" ends, my friend doesn't want to subscribe anymore. But I'm a big fan of "Homeland," and that season hasn't started yet. The same thing might happen with fans of "Penny Dreadful" and "Ray Donovan."
With the brilliance of that scheduling strategy (HBO and Starz do the same thing), Showtime has created a reason not only for single subscribers to stay connected, but also for shared subscribers to do the same. If the programming is great, you want to see it--shared subscription or not. So I will either persuade my friend to keep up his side of the bargain, or I will subscribe on my own.
Either way, Showtime wins. It should be noted that Showtime's revenue from their direct-to-consumer subscription is substantially higher than their share of subscription revenue from cable/satellite/telco service providers.
Now most of you are already thinking, "Why should they pay for something they can get for free?" And the answer comes back to one of the benefits we all identified for cable television: Control.
Television is astonishingly personal. What I watch is what I want. I'll accept recommendations from my friends, and it can be great fun participating in a live shared event like the NFL or NCAA March Madness, but at the end of the day what I watch on television is a reflection of who I am. If I get a bit creeped out by sharing my playlists, or get annoyed at having to schedule my time, I start moving closer to paying for a service that I regularly watch. And if my friend decides to disconnect a service right before MY SHOW comes onto the schedule, I get even closer.
Question is, can we capitalize on all this activity? Are we even trying?
Come to TVOT NYC
on December 3rd to find out.
The iTV Doctor is Rick Howe, who provides interactive video consulting services to programmers, advertisers and technology providers. He is the recipient of a CTAM Tami Award for retention marketing and this year was inducted into The Cable Pioneers. He is also the co-author of a patent for the use of multiscreen mosaics in EPG's. Endorsed by top cable and satellite distributors, "Dr" Howe still makes house calls, and the first visit is always free. His services include product development, distribution strategy and the development of low-cost interactive applications for rapid deployment across all platforms.
Have a question for the iTV Doctor? Email him at TheiTVDoctor@gmail.com