Netflix's purchase this week of North American distribution rights for the TV series "House of Cards" is the clearest evidence yet of the transformation of the television business from one of programmed networks to one of unbundled programs. The event accelerates everything about this revolution, and those unprepared are likely to be caught up in the black hole that's left behind. Make no mistake. This is the beginning of the end of linear television. So potentially complete is this transformation that it will impact everything from spectrum decisions in Washington to how things are bought and sold in the culture.
If a linear timeline — the need to neatly fill in 30 or 60 minute segments — doesn't matter, then the existing program length paradigm doesn't matter. Perhaps 22 minutes is actually right for a sitcom and 45 minutes for a crime drama, but maybe something else will develop. What will happen to all those other minutes currently dedicated to commercials?
"House of Cards" isn't just any television program. The show is a big-time political drama that will be directed by David Fincher, the director of "The Social Network," and starring Kevin Spacey. Netflix outbid others, including cable powerhouse HBO, in acquiring the one hour dramatic series. It's the stuff of Emmys and Golden Globes, and it says rather clearly that Netflix is a power to be respected in the world of television programming, as if it wasn't already.
You don't need to read between the lines as Ted Sarandos, the chief content officer for Netflix, describes the deal for Brian Stelter of the New York Times.
One of the chief advantages "House of Cards" will have is the on-demand nature of the Netflix service. Because TV networks have schedules, "when a show fails, itís because it failed to aggregate an audience at the time it was on television," Mr. Sarandos said. "There could be a million different reasons for that failure — itís not just because the show isn't good."
He continued, "Thereís nothing in our model that makes a show more valuable if it can attract a large audience at a specific time. As long as it happens in the life of the license, itís fine by me."
M.G. Seigler of TechCrunch writes that this is a game-changer for television and offers another suggestion for Netflix:
While shows that are called "cult hits" are often thought of as mainstream flops, the reality is that they still have millions of people who watch them. And the "cult" aspect implies that a large percentage of those viewers are insanely loyal to the show. Again, that doesn't mean much to the networks where more is better (for advertising), but for Netflix, if they could convert a significant percentage of those loyalists in to paying customers, it works.
Think about that for a minute. Sustainability for a TV program, in the unbundled model, is determined by how it does over a long period of time, not by overnight ratings. This changes everything about the model for original content creation and tilts everything in favor of quality and originality over formula and marketing. Those programs that last will do so because people like them, not because of their association with other programs in a line-up, time period or other aspect of the linear TV process.
Unbundled media is the future of media, and television is no exception. People despise the bundle, whether it's the "one hit plus 10 crappy cuts" of a music CD, paying for cable channels you don't want in order to get those you do, or the one-third of prime time television that's currently dedicated to commercials. Technology provides the weapons of the Bundled Media Liberation Movement, but it is newly empowered everyday people who are providing the demand.
Unbundled television is the polar opposite of the broadcast model, and media companies aren't prepared whatsoever to compete in this new universe. Everything that we know, everything that we practice, everything that we believe in is tied to that which bundles the content we create or distribute to the infrastructure that's doing the distributing. Separate the two, and we are fish out of water, flopping helplessly on the dock of user demand.
But it doesn't have to be so. We can — or perhaps "should" — be preparing for the inevitable, and here are eight recommendations to get us started.
Shift our strategic thinking from the bundle to that which is unbundled. From top-to-bottom, we ought to rethink everything, beginning with how we can monetize unbundled content. We need to be proactive about this and not wait until we're forced into it by the Netflixes and Google TVs of the unbundled world. Our instincts will be to fight this, but how much better is it to embrace the concept and innovate creative ways to attach marketing to that which we offer unbundled? There are and will be solutions, and now is the time to address them.
Present finished product news in modular form and let the modules contain their own commercial(s). We currently make newscasts, but those are a form of bundled media. We need to be producing individual newscast elements as standalone entities, complete with marketing, so that they can be used in unbundled settings. This means creating content specifically for an unbundled universe, not simply repurposing elements of newscasts. I like the idea of reporters introducing their own stories on camera, for example, so that the entire package is self-contained. These modules could be then assembled together or presented separately.
Fully embrace the long tail of content that exists within our archives. The beauty of unbundled content is that much of it is evergreen. In a video search environment, relevancy isn't necessarily determined by timeliness, which opens an entirely new universe for us. The TV news business must begin to see itself as such and not as instantly obsolete, as we are in the broadcast market. This will influence day-to-day coverage decisions, too, because unbundled content is consumed on the user's schedule, not ours.
Create issue-driven, local reality segments for ongoing viewing. One of the real beauties of unbundled content is that it doesn't have to live within the artificial time constraints of the broadcast schedule, whether we're talking program lengths or segment lengths. This opens the door for tremendous creativity when it comes to meeting the news and information needs of the community. Reality show production style hasn't found a place locally yet, but again, because time is flexible in an unbundled environment, there's no reason this can't begin here.
If you haven't already done so, embrace the VJ or Multi-Media Journalist (MMJ) model of content creation. This will give you the resources you need to compete in an unbundled world and give individual journalists the freedom to shoot, write and edit outside-the-box of typical newscast production. Creativity is the key to downstream success, and turning individual employees into fully functioning production and distribution units is essential for the unbundled world.
Create long form ad programs, because advertising is content in an unbundled world. The enabling of commerce ought to be at the forefront of anything creative we do locally, and while there's certainly no demand for unwanted advertising, there does exists a need for knowledge and information about consumer choices and overall shopping. Unbundled television is the perfect vehicle for this, and television stations are the perfect choice to assist advertisers in this realm.
Get serious about RSS. Really Simple Syndication is the distribution model for unbundled media, yet we use it solely as a mechanism for getting people to come visit our bundles. Full feed RSS brings with it new challenges and opportunities for monetization that we'll never explore unless we're practicing the unfettered release of our content into the wild via RSS. Nobody can give chapter and verse on how this will end, but I strongly recommend you be at the forefront of unbundled distribution via RSS.
Provide history in progress. While unbundled means on-demand, that does not preclude access to the real time streams and flows of news and information. When we live stream some ongoing event, that content must also be made available in an unbundled form, so that it can be redistributed anywhere. We want our stream to be the stream of record, and so such streams must be provided to other players free of programming or bundling constraints. Nothing will so assure our place at the table tomorrow as our willingness to help seed the whole when it comes to unbundled, distributed content.
Like everything else in media reinvention, this must be transitional. We can't just leap from the bundled model to an unbundled model overnight. It must be done in stages, which is why I like the idea of modular newscasts so much. If we're going to experiment with new forms of newscasts, then let's begin here by killing two birds with one stone. If standalone modules are ideal for unbundled consumption, then why not assemble them together for a version that is bundled?
However it's done, it must be done, for unbundled content is also the content of choice for portable media, and that's where everything is heading anyway. We've got to stop pretending that linear TV will go on forever and that all revenue solutions imitate those that "work" with 24-hour programming. This is a brave new world we've entered here, but one in which creative revenue opportunities are boundless.