Let’s talk television, taking a commonplace rant observation about cable companies and thinking about what it means for the future of content creators. Before I rant – er, observe – let’s set the framework for why this stuff matters.
We spend plenty of time talking about the great opportunities for creatives in The Jetsons Future. If you’re a content creator, you can send your brilliant creative work all over the world through multiple channels at once, using both smaller (such as your personal Facebook page) and mass (e.g. YouTube) digital distribution channels.
What about the content giants, the major studios? While most are making smart use of the YouTubes and Vimeos of the world, they’re all but required – surprise! – to rely on traditional big distribution, meaning broadcast, cable and satellite. We already live in a world that is transitioning from delivery of content via broadcast to broadband, so let’s dispense with the topic of broadcast today and move on to the latter two.
The challenge of a future in which content consumers have essentially infinite choices is that, at a certain point, more choice leads to less consumption. To reduce the inevitable drag on consumption that arises from too much choice, a few smart operators will succeed wildly by aggregating the most mass appeal content so that consumers can sample and consume it in digestible, understandable pieces. It’s not hard to imagine the three basic models of how the distribution of big content – the most mass appeal content available today – will be done in the not-so-distant future:
- Major content producers could distribute their content through their own branded delivery channels (not just websites and apps, but their own SVOD or AVOD systems), bypassing the rest of the industry completely.
- The current big content aggregators – we call them cable and satellite TV – might continue to dominate distribution when it’s accomplished via broadband. (Note to my radio friends: I keep waiting for Sirius/XM to act like this is their long-term play with regard to audio content.)
- New content aggregators/distributors will arrive on the scene. We’re talking about a digital equivalent to what cable and satellite are currently doing, but with a handle on the media business as it is currently developing..
The first option – the one where producers distribute their own content – makes a ton of sense. While the current TV business model “works for everyone”, why would it continue? If you’re turning a profit with the content you produce, you’re also sharing a ton of that profit with the distribution channels – y’know, the broadcast and cable networks – who are airing your content. If you can reach as many – or nearly as many – viewers through your own distribution system, why would you choose to share any of the revenue that your content earns with anyone else? (Said differently: if, say, you’re Warner Brothers Television, and you can distribute Big Bang Theory to consumers directly, why would you share any of the revenue earned by that series with CBS, TBS, or anyone else?)
As to new content aggregators, more – plenty more – will arise. Sure, Aereo was a misguided, copyright-infringing early attempt at creating a powerhouse broadbandcentric distributor, but better business models will develop, particularly because…
That second option – the existing cable and satellite operators? You can pretty much scratch their model. They won’t be transitioning to the digital future. It takes a lot to blow the inherent advantage that having a huge pre-existing customer base provides. You almost have to willingly choose to be self-destructive.
Self-destructive, however, is an excellent description for a business that treats its customers like garbage. Burning bridges with your consumers is a bad idea for any business; it’s a particularly bad idea for a business whose potential customers have plenty of new choices coming their way every year. (For more on this subject, I point you to Clayton Christensen’s The Innovator’s Dilemma.)
Okay, rant time. If I thought for a minute that mine was a unique experience, I wouldn’t bother telling you about it. I know better. Frankly, it was just a couple years ago that, as a broadcaster, I sat in a meeting with senior marketing executives from a major cable provider. They wanted my thoughts on improving the public perception of their company’s customer relations, which they admitted was particularly dim. That company is the same one that leads off this brief tale.
Let’s Meet An Unnamed Cable Provider. I’ve been a customer of this provider for about 18 months. When my already-silly monthly bill suddenly jumped another 17%, I did what any self-respecting lawyer would do, I called “customer service” to renegotiate. After the gentleman on the other end of the phone got done (1) listening to me tell him I’d cancel my service immediately if the price increase were not removed from my bill, (2) reading his customer service script and (3) getting my account information, he made me roar with laughter like no standup comedian has done in years. (And frankly, if you’re a standup and you don’t find a way to incorporate this line into your act, you’re dropping the ball, friend.)
His inadvertent punchline: “As a loyal customer of our company, we’re pleased to offer you continued service at [the exact new price I was refusing to pay].” The poor guy had to listen to me hyperventilate with laughter for about three minutes before I could collect myself enough to continue the conversation. When I regained the ability to speak complete sentences, I asked him to cancel my service, noting that if my “loyalty” was to be rewarded in that fashion, I was withdrawing it. The additional charge was immediately removed from my bill.
In the words of infomercials everywhere: but wait, there’s more.
Apparently, the DVR that I don’t use is about to start costing me money I don’t want to pay. (The rep. couldn’t tell me when, of course.) My alternative is to waste a couple hours traveling to their retail outlet and trading in my cable box for one without a DVR. Oh, and the digital converters the company provided me for the two TV sets that previously received cable just fine by being plugged into the wall? Yes, the cable provider knows they don’t really receive much of the channel lineup I’m paying for, but if I don’t mind springing for a couple Roku boxes for those two television sets, I can receive everything I’m overpaying for with “no problems”. (It’s also not particularly bright to suggest to customers that they purchase the technology that allows them to unplug from your service.)
I’m staying for now because of…
Some Quality Time With An Unnamed Satellite Television Provider. What else would a negotiator do, but find a second offeror to negotiate with in search of a better deal? Enter our unnamed satellite television provider. Like any prepared negotiator, I already knew what option I wanted to price; I simply needed to know how much the “free” extras on the package were going to cost me in the second year of my putative two-year commitment. I asked their “customer service” rep. to skip the script her company expected her to read and provide me with the pricing information I wanted.
Instead, the woman on the phone told me all the wonderful reasons their service was so much better than my existing service. When I again asked her to drop the script and simply provide me with pricing information, she continued to ignore me and asked for my e-mail address, telling me I’d “receive better offers directly from [provider] than what I’m telling you about today.” Translation: we do not respect your time; we have a script we’re going to read you, and by God, you will hear every second of it, whether you want to or not.
Things went downhill quickly from there.
Me: “Listen, I’m calling you right now to get your best price on the following package. I’ve been to your website. I know what’s included. I simply want to know if there are extra charges besides the monthly charge listed on the website. Please do not tell me how wonderful your company is or attempt to database me. I’m giving you exactly zero personal information until I know whether I want to do business with you. Simply give me a price.”
Rep: “I’ll be glad to, but first, I’ll need your social security number.”
Me: “Do you think that, if I won’t give you my e-mail address, I’m going to give you my social security number? If the next thing out of your mouth is anything other than numbers, I’ll politely say goodbye and hang up the phone.”
You may safely assume the call ended within seconds.
The two people I spoke with on the phone are blameless. They were very pleasant, and no doubt, they were conducting themselves as they’d been trained. Hence the problem.
And yes, customer service everywhere is horrid. In the words of a very wise friend, “This could have been a customer service call with any company but Zappos.” Just one problem: not every business is currently experiencing an existential moment. Television distribution, on the other hand, is. Money – a lot of it – is at stake right now!
If you’re the CEO of a cable or satellite company, if you’re sitting in the meetings where your company’s business development strategy is being contemplated, if you’re on the board of such a company, what the h-e-double-hockey-sticks are you thinking? Do you consider hidden charges, hard sells, and an absurd overfixation on building your customer database a plan for revenue growth? Have you missed out on the fact that today’s consumer sees through the smoke and mirrors of upcharges?
Have you missed cord cutting? Do you not understand why it is happening? Are you really, genuinely surprised that it is happening? Are you self-destructive?
The future is already trending away from you. Wake up!
Of course, if you’re the person or company making content, you need to wake up too. Keep your eyes and ears open for the latest developments with content distribution, and remember that, in a world where everything is changing and re-changing at lightning speed, what’s best for your content today might not be best next week.
[embedyt]http://www.youtube.com/watch?v=fjsSr3z5nVk[/embedyt]
Replace the printer with a cable box, and you have a good idea about cable’s customer satisfaction.
