It turns out that Viacom and Hulu are squabbling about the ad revenue split. Hulu put some nice spin on the situation, saying, “After a series of discussions with the team at Comedy Central, though, we ultimately were unable to secure the rights to extend these shows for a much longer period of time.” However, Wayne Friedman of MediaPost Publications added some details: “It seems Viacom wants a bigger split of advertising revenue — supposedly more than the 50% to 70% it already got from Hulu.” Hulu apparently declined that deal.
Hulu
This is just another chapter in the long, sorry history of the splintering of of the TV world. Last year, I fantasized about a TV Portal service that would provide a single lookup for any TV show. Then depending on the makeup of your equipment, Cable, Apple TV, Hulu, for example, you’d know how and where and when to get a particular TV show — or whole series.
That hasn’t happend, so far as I know, because very few people would, I surmise, pay for such a service. It would require a massive amount of work to build such a database and maintain its ever changing structure.
On Thursday, David Morgan, also with MediaPost Publications, suggested that TV programming needs to move closer to a point of sale service — as opposed to a traditional broadcast. After all, the commercials in broadcast TV are of interest to only a small percent of the viewers. The rest of us (well, about 50% of Americans), as proven by DVR habits, pre-record our favorite shows, watch at our leisure, and hit that 30 second skip button to fast forward through commercials.
Of course, we can’t forget that millions of Americans simply connect their TV to the cable box, look up the night’s viewing in the TV Guide, and glide through the night. Even so, I don’t believe the future of TV rests on maintaining that old-time scenario. Increasingly, advertisers want to know who they’re reaching and what the ROI on their investment is. That means that, eventually, TV delivery needs to become a one-to-one proposition, not a one-to-many, as Mr. Morgan noted.
Today, however, as proven by the Viacom-Hulu squabble, people who want to settle on a single, simple delivery mode can’t do it. If you killed your cable to switch to Hulu, and you’re a big Stephen Colbert fan, you’re screwed after March 9. Currently, it requires a mix of equipment and services to cover your bases — and even then there are holes. A notable example is when DIRECTV dropped Versus (owned by Comcast) thanks to exorbitant fees. (Leaving DIRECTV’s ice hockey fans furious.)
It occurs to me that a TV portal isn’t really the solution. In fact, one can and should expect that a new technology will come along that changes the game so completely that it automatically brings at least a partial solution to the problem.
That technical innovation would well be the Apple iPad.
The iPad doesn’t require a lot of complicated cabling. It’s portable. It’s battery life is such that it’s almost always immediately available. If content providers were excited about delivering video to smartphones, then they should be out of their minds crazy for the iPad. That’s all assuming that Apple doesn’t do something stupid and try to make the iPad an iTunes only device. After all, Apple’s revenues from iTunes are small compared to hardware sales. It would behoove Apple to make sure that a Hulu app and other apps allow content providers to create that special one-to-one relationship with iPad customers such that any iPad user can get whatever he/she wants whenever desired.
The picture is still unfolding. Even so, I have a gut feeling that the way out of the TV market disintegration is via universal hardware. If Apple choses to promote that, there may come a day when stand-alone TVs, except for exotic home theaters with 3D, are the exception. Instead, our TV experience resides in our backpack or briefcase. At that point, everything changes in the TV market.
The question is basically whether network executives will have the vision to take advantage of a technological game changer or whether they’ll cower, cover their bets, and grind themselves and customers into yet deeper despair of TV disintegration.