TV Transformed: Inside the Shift to Streaming

How did streaming, binge watching and second-screening change the way TV content is written and distributed? A group of industry executives and academics share insights and research.

In the world of television, digital transformation has made itself apparent in a number of ways, and they have been nothing short of industry-rattling. We are in the midst of a removal of the time constraints associated with broadcast schedules, prime-time programming, and regional and national borders.

Replacing these 20th century conventions is the advent of on-demand viewing, multiple screens across which we view programming, recommendation systems that learn from our viewing patterns, and auto-play features that stitch one program with the next, meaning we may never have to get up from the couch again.

Size and scope of the digital transformation

For a sense of the size and scope of the changes afoot in the industry, consider these latest facts and statistics:

  • In 2016, streaming audio and video accounted for 71% of evening traffic on North American fixed-access networks, i.e., double the proportion from five years earlier (Sandvine).
  • In Canada, 80% of Anglophones and 75% of Francophones are watching videos online, whether it be on YouTube or Netflix, whereas nearly all young Canadian adults and students watch online videos (Media Technology Monitor, 2016).
  • In the U.S., a new tipping point has been reached: there are more adults using streaming services (both paid and free) than paid TV subscribers (Consumer Technology Association).
  • In the U.S., one third of all cord cutters (those who have abandoned cable TV) are millennials, but the average cord cutter is 43 years old (GfK MRI).
  • Netflix is the second-biggest U.S. spender when it comes to media content. In 2017, it will invest $6 billion in original programming (CNBC).
  • In China, online films surpassed theatre releases by 500% in 2016 (EntGroup).

How OTT transformed storytelling

Jay Roewe, Senior Vice President of Original Programming at HBO, calls these changes ‘seismic shifts,’ noting that both media consumption and media production have undergone dramatic changes. “The way writers write, particularly outside of ad-supported shows, has completely changed.”

Roewe points to structures of script and narrative arcs, once created for weekly viewing, that are now retooled for an environment in which several hours of programming are often consumed in a single sitting. In fact, instead of viewing over the course of an almost year-long broadcast season, viewers routinely consume an entire series over 1 or 2 weekends.

Reporting on his work chronicling the phenomenon of binge-viewing for Netflix, anthropologist Grant McCracken invoked the metaphor of contracts at the Boston conference, using the notion of a legal framework to highlight differences between the old and new worlds of the television viewing experience.

In the old world, noted McCracken, bad things rarely happened to the hero or ‘good guy.’ Now, in shows ranging from House of Cards to Game of Thrones to Homeland and Scandal, bodies of characters brazenly pile up, in spite of viewers’ deep levels of engagement with characters and story arcs.

McCracken also highlighted the ‘one look TV’ of the old world, in which it was understood that we only viewed things once, at their scheduled time. By contrast, today’s programming is designed with greater complexity, and an expectation of behaviours such as repeated viewing and second screening, in which a back channel of real-time commenting and Googling form a layer of digital intelligence that enhances the main screen.

Another casualty of old TV observed by McCracken is a shift from the distinct boundaries of genres to more freely formed and flowing practices. Or, as Boston University professor Tammy Vigil put it, “the new contract is an ongoing expectation of violation.”

How OTT transformed distribution

For its part, HBO has responded to the turbulence with the introduction of HBO Now and HBO Go, offerings that serve both existing TV customers and new, non-TV screen viewers. HBO Now provides linear programming offered as a standalone OTT subscription service for $15 per month and is separate from HBO as part of a cable or satellite subscription.

In other words, you don’t have to have a TV or cable subscription to HBO in order to get HBO Now. On the other hand, HBO Go is a streaming service that is available as a free add-on with an HBO cable subscription. As pointed out by Boston University’s Cathy Perron, the introduction of HBO Now has netted the company an additional 10 to 15 million paying customers it would not have reached otherwise.

Another variation in the TV landscape has been the arrival of ‘skinny bundles,’ i.e., pared-down, lower-priced versions of traditional cable packages. The most recent figures available from Nielsen regarding cable TV consumption date back to 2014 and show the average number of cable channels in the U.S. home to be 189, of which 17 are viewed on average, while the average monthly cable bill comes in at just over $100.

Slimmer cable channel options have been available in Canada since 2016 and a notable package has recently been introduced in the U.S. by YouTube. It provides access to 40 channels including ABC, CBS, Fox, NBC and ESPN, as well as YouTube Red, the advertising-free version of YouTube that includes premium programming not available on the basic, ad-supported version.

As cord-cutting continues—and it will, with a record number of Canadians saying no to their monthly cable bill in 2016—broadcasters, media firms, telcos, and platforms will need to keep coming up with new options for consumers. On-demand services, allowing viewers to decide where, what, when, and how to watch, will undoubtedly be the new normal, bringing technology, choice, and consumer behaviour together in a new marketplace of visual entertainment.

Leora Kornfeld
So far in life, Leora has been a record store clerk, a CBC radio host, a Harvard Business School case writer, a blogger and a crossword puzzle clue. Currently she’s a media and technology consultant, working with clients in the US and Canada.
Read Bio