Modern TV viewers are faced with the need to mix and match services to get the content they want, control costs, and make good use of the DVR to skip ads and/or use ad-free services like Netflix. It's all part of the transition to 100 percent Internet TV. Unfortunately, as the TV industry tries to optimize profits, the viewer is often caught in the middle. The New Star Trek series on CBS highlights the dilemma that Apple wants to solve.
On November 2nd, CBS announced that it would be carrying the new Star Trek TV series in 2017. The catch is that first run episodes will be on the CBS Internet subscription service called All Access. (US$5.99/month) That announcement was a mixed blessing.
Millions will be happy to have an original Star Trek TV series return. (We still don't know if it will be the movie or the original TV timeline.) The downside seemed to be, at first, that CBS, with Star Trek as a carrot, would be strong-arming viewers into subscribing to its All Access paid service.
My opinion is that the decision didn't sit well with all those who heard about it. One reason for that is that while you have to pay a monthly fee for CBS All Access, it still has commercials.
Cordcutting.com wrote, in its review of All Access,
The actual viewing experience was pretty pleasant – the videos loaded well, played smoothly, and looked great. Like Hulu (and unlike Netflix) you’ll still have to sit through commercials despite being a paying customer. You’ll see up to four commercials per break, which seemed a bit high to us.
And therein lies the rub.
Cord Cutters who are trying to escape from the $100/month bill from cable or satellite (and always rising), have to be pretty shrewd about the trade-off between a cable service that offers a full-featured HD DVR that allows one to skip over commercials and (perhaps) a lower cost suite of apps that force one to sit through unavoidable ads.
Perhaps, in recognition of that, one day later, CBS CEO Les Moonves, who is a pretty sharp fellow, announced that CBS is considering an "ad free" version of All Access for $9.99/month. That's similar to what Hulu does now, and it goes a long way towards taking the sting out of Star Trek with unskippable commercial breaks-a concept that would set us back 50 years in time.
The Dilemma
Netflix is beloved precisely because one can pay $9/month and have a wide range of TV shows and movies viewable without interruption. The CBS idea of $10/month is a hefty price to pay for CBS content only and reflects the idea that the industry is having a hard time figuring out how to satisfy viewers who want to pay less monthly and still afford their company plentiful and growing revenues.
Will this be the Answer we're looking for?
What Apple is trying to do with its rumored subscription service is to take away the pain of eternal, difficult choices. If an Apple customer can get most of what they need, including local ABC/CBS/NBC/Fox affiliate channels (and sports) for $40/month—plus Netflix access (and games and other apps) it would take a lot of pain out deciding on a mix and save money. Regrettably, (the rumored) $40/month marginalizes cable and satellite partners and doesn't put the TV industry on a growth path. It's been a hard sell for Apple with no progress made.
Most TV viewers today, I believe, invoke a complex mix of solutions. They still have a cable or satellite service with its glorious high definition DVR and then the Apple TV/Roku/Chromcast/Amazon Fire TV product is used as a supplement for Netflix or Amazon Prime. As more and more viewers, especially younger, less affluent viewers find the OTT services satisfactory, they cut the cord. Whatever the customer does eats away at rich revenue source for the content providers as well as the carriers.
While the TV industry wrestles with a an optimum mix of services, and still tries to demonstrate growth, they probably wouldn't mind if the DVR were to go away at some point. The DVR causes all kinds of accounting headaches for when a viewer sees the embedded ads, even if they're skipped. That's why your 30 second forward jump button doesn't skip forward instantaneously but essentially fast forwards slow enough to entice you into something you might glimpse.
Muddling Through the Transition
My expectation is that because research has shown that there is a healthy fraction of people who will want to pay less and acquiesce to ads, there will always be (or should be) a choice from the networks. Pay less and be forced to endure them or pay more and be free of them. But how much more?
The November 3rd announcement, a backtrack, by Mr. Moonves is a recognition of that reality. Viewers, however, don't have it easy. It's often a struggle nowadays to pick just the right mix of services, get all the sports they want and still keep a lid on costs.
Eventually, we'll get through all this transition to 100 percent Internet TV. For many, the best option is a blend of the old and new. For others, Netflix is all they need and sets the standard for ad-free television. One thing is for sure, however. Strong-arming customers never works. It seems Mr. Moonves only needed 24 hours to figure that out.
It was the logical thing to do.
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Teaser image via Shutterstock.
