OT: How Would TV Generate Revenue Without Commercials?

[Bobcrane]

This may have been discussed years ago (when SonicBlue was a hopeful pup maybe?).

Let's say America fell in love with the DVR and timeshifted 80% of what they watch. If 80-90% of them skip commercials (some statistic I saw recently) then how would TV shows/networks make money to put on the shows?

When I look at it:
1. Cable revenue probably isn't enough?
2. I can't imagine product placement being that great but I could be wrong.
3. Even if they improved the commercials once I'm in the habit of no commercials then I'm gone forever. (Though I did hear Lost put some Easter egg in a commercial and people went back to see it).

[l2eplayer]

any provider will pay so much per channel to broadcast that channel cable, satellite and so on.

They may make money off of selling season episodes of aired citcoms and such...

Finally forums of advertisement are not just commercials that actually occur during a commercial break actors get payed to drink that pepsi, smoke that brand of cigarette, wear that radical clothing they are wearing and so on so on.

They could also put like a MT. DEW watermark that spins around in the corner of the screen during the show and then disappear only semi commercial without skipping much of a beat within you're show.

It is my honest opinon that there are many ways to generate revenue without playing commericals every 15 mins they seem to go a little overboard really they could have commercialisim between shows as most people who want to watch a certain show begin watching the channel before the show starts and the number of ways I've listed above.

As broadcasting becomes cheaper easier and more efficiant and broadband internet becomes faster lets say internet 2 I hope they bring a competition to the market place one big competitive playing field where they do not interrupt programming with commercial breaks and instead wait until you're show is finished to broadcast the commercials.

l2eplayer

[Bobcrane]

Finally forums of advertisement are not just commercials that actually occur during a commercial break actors get payed to drink that pepsi, smoke that brand of cigarette, wear that radical clothing they are wearing and so on so on. I mention product placement in #2. But will companies really pay big bucks for product placement only?

[rm -rf *.*]

Happens in all the James Bond movies.

[brian7972]

[QUOTE=Bobcrane]I mention product placement in #2. But will companies really pay big bucks for product placement only?[/QUOTE]

Product placements have more of an effect on me for some reason. For example, watching "24" this season and last made it plain that the preferred vehicles are Ford Explorers and F-150s. To this day I can remember them clearly for some reason.

Also, I often find myself trying to figure out what a product is when the producers have blurred it or put tape over the label (on reality shows).

In contrast, there are some commercials that annoy me so much that I go out of my way to buy a competitor's product (well, not really, but they annoy me).

I don't think we'll ever see a commercial-free, product placement universe because there are too many products/advertisers that pay big bucks who need 30 seconds to explain what they do, who they are or why they're better. You can place Coke, Ford, Pepsi and Mountain Dew, but you can't place ING, Cialis (well, perhaps ;) ), Fidelity Investments etc. I doubt we'll ever see the day when someone on a sitcom discusses the great success they had on monster.com to get their job. The cheese factor for verbal product placements is too high IMO.

So, in short, I think we'll start seeing more sporadic but limited product placements with commercials here to stay for a long time.

[sixt7gt350]

It was pretty obvious that Nissan paid some big bucks for product placement in the most recent Desperate Housewives. I think it crossed the line between product placement and blatant, in-your-face advertisement.

[Bobcrane]

I'm not saying that product placement isn't a revenue generator, just that I wonder if it is enough of a revenue generator.

I think when Ford pays 24 to use Ford SUV's or All of the American Idol judges face the Coca-Cola logo toward the camera you've got good product placement.

A few seasons back when Everwood had a main character go into depression and go on anti-depressants. I've never heard people work so hard to say Zoloft a dozen times in one hour. It was a bit goofy.

But in the end are there any other avenues for generating income?

[rm -rf *.*]

[QUOTE=Bobcrane]
But in the end are there any other avenues for generating income?[/QUOTE]
You could set up a booth at the state fair and charge people a buck to take three swings at your dead horse...

[Bobcrane]

[QUOTE=rm -rf *.*]You could set up a booth at the state fair and charge people a buck to take three swings at your dead horse...[/QUOTE]

Cuzzactly! LoL

You've got great timing. I was just thinking how industries in the past handled the sudden shift in the delivery of goods. i.e., the phonograph and cinema changing entertainment delivery.

Or how they didn't handle it:
Montgomery Ward relying on catlog sales too long
Toys R Us waiting too long to get with internet sales
etc, etc.

[wrench]

two words:

Government Subsidies :eek:

:D

[Bobcrane]

[QUOTE=wrench]two words:

Government Subsidies :eek:

:D[/QUOTE] Crack Smoker. :D

[rm -rf *.*]

Virtual Crack Smoker... (http://www.virtualcrack.com)

[tlf9999]

maybe we should take it one step further: how about the iTunes model where one buys TV shows individually?

the future of digital entertainment isn't broadcasting (one-to-N), but multi-casting (N-to-N), by that I mean we will essentially program our own programming (aka individual songs), or by pre-packaged programming (aka playlists). We can subscribe to a particular show (the season pass concept in a different twist), we can also subscribe to a particular programming package (Gaming shows, cooking shows, Chinese cooking shows, Fishing in Siberia, etc.) and the machine will just download those shows as they become available and manage them locally.

Of course, we pay for the programming / individual shows. That way, you will have completely tailored programming for you.

1-to-N broadcasting without commercial will be hard to sustain and unnecessary in that world.

That is why so many people are investing so heavily to be the gatekeeper of your digital entertainment - because they will be controlling the distribution of the content, just like broadcasters or newspaper publishers or websites do today.

[Slack]

Let's try three words....

Pay Per View.

Much like the drug dealer, at first, give folks a taste for free.... and just like the drug biz, if the product is good, people will comeback and PAY.

I'd pay right now to watch another episode of Lost. I have (got season 1 on DVD for the folks), and will likely pay again. The death of commerically funded programming is probably a good thing IMHO.

Still, it's a slippery slope. How much will people pay. I always vowed I would NEVER pay to watch NFL football. But if you removed the stupid beer commercials (OK I admit it. I do use 'Content Advance' once a year) and televised the game without network 'timeouts' I might consider it. So long as I get to choose my color commentator. Replacing Madden with Berman, I'd pay double digits (9.99 as they'd price it) to do that.

Couple this with low cost delivery (IPTV) and you might have a workable business model??? I have no clue.

But like most of you, commercials are a distant memory for this family. They died the summer of 2000 when my first RTV became another family member.

[rm -rf *.*]

[QUOTE=Slack]Let's try three words....

Pay Per View.

Much like the drug dealer, at first, give folks a taste for free.... and just like the drug biz, if the product is good, people will comeback and PAY.
[/QUOTE]
Let's try two words....

Bit Torrent.

People aren't going to pay for what they can steal for free.

[Ace987]

[QUOTE=rm -rf *.*]Let's try two words....

Bit Torrent.

People aren't going to pay for what they can steal for free.[/QUOTE] That's not true. If it was, there would be no iTunes and similiar type stores. Granted, these places lose business because of Bit Torrent, but they do actually sell music and videos.

Now, an actual figure of how much business is lost due to Bit Torrent is unknown. How could it really be known. According to the music and television industry, it's higher than the national debt, but we all know they inflate facts and figures to suit their purposes.

[rm -rf *.*]

Fair enough. So let's just say "A portion of the businuess will be lost to Bit Torrent." Some people will pay, others will steal. OK?

[elliott]

You're all missing something that is right in front of your face - and a little down and to the right.

We see commercials for upcoming programs as annoying little animations in the corner of the screen now. How long before it's that creepy "Burger King" prancing across the bottom 15% of your favorite show?

[plyons10]

I don't know... this question has me stumped. For the life of me, I can't think of any TV network that could possibly survive without commercials. (HBO). I mean, even if a TV network produced award winning shows (HBO) on a consistent basis (HBO), wouldn't they still be at the mercy of their commercial sponsors (NOT HBO).

It's a good question with no existing business model that has met the challenge yet (HBO).

[Bobcrane]

[QUOTE=plyons10]I don't know... this question has me stumped. For the life of me, I can't think of any TV network that could possibly survive without commercials. (HBO). I mean, even if a TV network produced award winning shows (HBO) on a consistent basis (HBO), wouldn't they still be at the mercy of their commercial sponsors (NOT HBO).

It's a good question with no existing business model that has met the challenge yet (HBO).[/QUOTE]
Exactly who I've been thinking of the entire time. Though I don't have HBO so I don't know:
1. Do they ever show commercials? Years ago they added Pepsi for a time.
2. How much of their content is now original programming? That will be a big key as well.

As to the ads at the bottom of the screen: Again that's a possibility for some $$$ but will it be enough? Maybe. It's probably the most annoying of all the possibilities.

[plyons10]

HBO shows no commercials.

They obviously pay for the movies that consitute the majority of their programming, but the rest is orginal programming.

[Bobcrane]

But I'd imagine the movies they pay for don't cost near as much as original programming.

[The Robman]

[QUOTE=tlf9999]Of course, we pay for the programming / individual shows. That way, you will have completely tailored programming for you.[/QUOTE]I can't see that working because nobody would ever pay for new shows. While you might be prepared to pay for a new episode of hits like Lost or 24 now, would you have paid to see the first episode. And even if they let you have the 1st episode for free, how long do you let people have them for free and would it be long enough for the show to catch on?

I think the future will see a mixture of product placement, ads at the bottom of the screen and regular commercial breaks, but the breaks will be less frequent and shorter (and hopefully the ads themselves will be better quality).

Big players (like Coke and Ford), etc will make use of product placement. Food and drink companies (like Coke, McDonalds, Burger King, etc) will probably use alot of ads at the bottom of the screen (ie, to get you hungry, thirsty, etc), and the rest will have to stick with regular commercials as it gives them a chance to explain in detail what it is they're selling.

When I was a kid growing up in England, commercials were nowhere near as abnoxious as the ones that run on US TV today, and they didn't run anywhere near as often, so we didn't have anywhere as much motivation to get rid of them as we do today. An hour long show would only have 3 commercial breaks (at the 15 minute marks) and the rest of the ads would run between the shows. Plus, alot of the commercials were actually fun to watch! The beer commercials were the best, this was because British law wouldn't let them say that beer is good for you or even imply that it would give you sex appeal (so the US Budwieser commercials wouldn't fly over there), which forced the beer companies to be creative. Fosters Beer ran some great ads (that made a star out of Paul Hogan before the Crocodile Dundee movies) and did Heineken and Carling Black Label. As Guinness wasn't allowed to say that Guinness is good for you (as they did elsewhere) they came up with "Guinless is bad for you"! And to this day I can remember the tunes from the Cadbury's Flake and R.White's Lemonade ads, as I bet most other people from those days can.

So, my point is, if we get to the point where DVRs are becoming more popular, before it gets past the point of no return (where everybody has a DVR) I think the advertisers will be forced to start being creative with their ads (as quite frankly most of the ads that run on US TV today are crap). Plus, TV stations will be forced to replace some of the spots with product placement or animations at the bottom of the screen. If they do all of this, they will have removed one of the primary reasons that alot of people buy DVRs in the first place (ie, to skip commercials), so they might be able to prevent the entire market place from switching over to DVRs (which will be a good thing for those of us that already have them! :) ).

[Bobcrane]

I dunno why but Rob's post reminded me of another entity that hates the DVR - Nielsen and their clients.

I cracked up about a year ago when I heard the newsstory about this. People were actually going out of their way to squash DVR's because it was too inconvient to wait until someone decides to watch a show before they recv'd their market research info.

I would think we'll look back on this years later and laugh at the stupidty.

[slowbiscuit]

[QUOTE=elliott]You're all missing something that is right in front of your face - and a little down and to the right.[/QUOTE]
Yep. Firefox + AdBlock + FlashBlock + no animations means that I'm definitely missing that.

Oh yeah, and before anyone chimes in with the obligatory 'wah - support your local website' drone, please note that I don't click on any ad banner, so it doesn't matter anyway. Just cleans up the screen for me and saves server bandwidth for others that don't care.

[elliott]

[QUOTE=slowbiscuit]Yep. Firefox + AdBlock + FlashBlock + no animations means that I'm definitely missing that.

Oh yeah, and before anyone chimes in with the obligatory 'wah - support your local website' drone, please note that I don't click on any ad banner, so it doesn't matter anyway. Just cleans up the screen for me and saves server bandwidth for others that don't care.[/QUOTE]

OK, I guess "right in front of your face" when you read this IS your PC - banner city.

But I'm talking about dogs - the graphics on the corner of your TV screen, that started out as logos only, next was bouncy little ads for the next program on the schedule - and next month it'll be the burger creep.

They won't care if you have commercial skip when the ads run concurrent with the programming, 24x7.

It could have a good side - they'd have to actually put an hour of program into a 1-hour slot instead of the 40 minutes we get now.

[antnjen]

[QUOTE=Bobcrane]I would think we'll look back on this years later and laugh at the stupidty.[/QUOTE]

Why wait?

[gweempose]

I'm fairly certain that if we ever shift to a pay-per-view type of model, the ads will be tacked on to the beginning of every show and there will be no way of skipping them. Just like today, the cost of the ads will be based on how popular the show is. The only difference is that the ratings will be based on the number of downloads instead of the ludicrously medieval Nielson method.

[slowbiscuit]

[QUOTE=elliott]OK, I guess "right in front of your face" when you read this IS your PC - banner city.

But I'm talking about dogs - the graphics on the corner of your TV screen, that started out as logos only, next was bouncy little ads for the next program on the schedule - and next month it'll be the burger creep.

They won't care if you have commercial skip when the ads run concurrent with the programming, 24x7.

It could have a good side - they'd have to actually put an hour of program into a 1-hour slot instead of the 40 minutes we get now.[/QUOTE]
Oops my bad, you're right, this is definitely one way that they're going to get around our skipping. TNT is especially annoying in this regard when you're trying to watch a movie. They just love to insert those stupid animations promo'ing another movie when they're coming out of a commercial break.
I think another way will be with the 'commercials that are not commercials' trick that we saw with Lost, interspersing fake commercials, web references or other show-related info in with the real commercials to try and force you to at least skim through everything.

[tlf9999]

[QUOTE=The Robman]I can't see that working because nobody would ever pay for new shows. While you might be prepared to pay for a new episode of hits like Lost or 24 now, would you have paid to see the first episode. And even if they let you have the 1st episode for free, how long do you let people have them for free and would it be long enough for the show to catch on?[/QUOTE]

that's fairly easy to solve and you youself provided a good solution: the studios can promote a new show in various ways, one of which is to distribute it free or at a discount. That is no different from the mkting of a new movie this days, which is actually factored into the distribution agreement / investment before a movie gets greenlighted.

I guess my point is that such an obscacle is not insurmountable.

[The Robman]

Yeah, but how long do they run it for free? Are we talking 2 or 3 episodes or the entire first season? If it's only 2 or 3 episodes, that's nowhere near long enough for it to catch on, but if it's for an extended period of time, they'll be losing more money than they can afford to lose.

[tlf9999]

I do not know and I would imagine it is case dependent: a good show would allow for a shorter promotion and a bad should would require a longer promotion and it would be foolish to set a fast rule now for all shows to come.

[rm -rf *.*]

[QUOTE=tlf9999]I do not know and I would imagine it is case dependent: a good show would allow for a shorter promotion and a bad should would require a longer promotion and it would be foolish to set a fast rule now for all shows to come.[/QUOTE]
*ROTFLMAO!!*

Like any producer/director/network is going to openly admit "This show is a piece of crap, why don't you run 5 episodes for free, then start charging."

AHHAHAHAHAHAHHAHAHA. You funny. Can you say your hypothesis in a "monster truck school of announcing" voice too? SUNDAY-SUNDAY-SUNDAY! IT'S THE GIGANTIC SUPER-COLOSSAL SEASON PREMERERE OF LOST!!!!! EXCITEMENT! EXCITEMENT! EXCITEMENT!