What I Learned About TV Everywhere Because Of My ‘Dexter’ Obsession
Ken Sonenclar is a Managing Director at DeSilva + Phillips, LLC, a New York investment bank specializing in media.
I had a crisis on my hands last Sunday.
A withering rainstorm had knocked my satellite dish out of alignment, leaving it aimlessly searching for a signal. DirecTV (NYSE: DTV) said they could send a repairman out by Wednesday. (Really?)
Now, there was no end of alternative amusements in my household. We could kill Nazis or raft rapids on our Kinected Xbox; we could stream countless B movies and TV episodes via the Roku atop my den TV. We still had full internet access, so I could shop or watch or comment to my heart’s delight. And, in the spirit of Jane Austen, my son’s current English assignment, we could retire to the music room and listen to my daughter play Chopin (though I’d draw the line at dancing a mazurka).
However, philistine that I am, I wanted to watch Dexter. It was the 5th season finale, and the eponymous serial killer who slices and dices other serial killers had kept me on the edge of my couch every Sunday night for the past three months. The show’s brilliant writers end every season with a plot twist as dazzling as a Baryshnikov grand jeté, and I wasn’t going to miss it.
And since I’m a spoiled brat of a consumer today like everyone else – I want it wherever and whenever I want it, meaning here and now – I went searching for it. My anxiety grew as I hit one dead end after another. Showtime doesn’t stream episodes – they want you to order Showtime (which I already get). Netflix (NSDQ: NFLX), which I subscribe to, lets you stream only the first two seasons. Hulu didn’t have it, and neither did Amazon (NSDQ: AMZN) nor iTunes.
So, unable to find anyone to take my money, I turned to Google (NSDQ: GOOG). “Streaming Dexter,” I typed.
There is a notion, concocted by companies that create and distribute big-time visual media that their fate will take a different path than the music industry. The “TV Everywhere” concept – pay some carrier’s bill and watch expensive programming everyplace on everything – championed most loudly by Time (NYSE: TWX) Warner’s Jeff Bewkes and Comcast’s Brian Roberts, has lifted industry spirits even as cable subscriptions have flattened.
It’s simple and appealing. Pay just once and they’ll make it is easy for you. Moreover, virtually everyone with a paying job in media has some vested interest in seeing intellectual property hold its value, generating an unavoidable bias. However, to paraphrase Stephen King and many others, wishing doesn’t make it so. In fact, only the gargantuan size of many visual files and some clever technical stopgaps have given Big Content enough lag time to consider a variety of bad alternatives before the tsunami hits. Faster processors and cheaper storage would have sent HBO into the same tailspin as WMG five years ago.
As for Dexter, my search immediately turned up a site with this headline:
“10 Ways to Watch Dexter Season 5 Online for Free”
It seemed hard to believe, but I saw that every episode from every season was only a click away. I had never downloaded anything like this and had no interest in downloading now. Like Chauncey Gardner, I only wanted to watch. I noticed from time stamps on a couple of sites that it took about two hours from Showtime’s first airing (9 p.m. Eastern) for the apparently pirated episodes to upload, so I returned around 11:30. I began to despair when I couldn’t find the new episode anywhere. But a few minutes before midnight, the finale started to roll. Admittedly it was not HD quality, but neither was it the shaky product of Kramer filming directly off the screen with a handheld camera.
The pirating of visual media has been a problem for decades, though never as insidious as now. But these sorts of pirate sites are only one hole in a crumbling dike that Big Content does not have enough fingers to staunch. Broadcasters themselves have already punched a few holes by giving so much away on Hulu and elsewhere. More recently, cleverly designed and well-financed sites such as FilmOn have openly challenged copyright conventions by grabbing broadcast and cable signals, including live sports, and retransmitting for free on the web. The courts have stepped in and Congress may have to as well before long. Some of the pirates supposedly operate offshore and will be more difficult to handcuff.
And by Christmas 2012, when Best Buy is chock full of devices that allow full web access through everyone’s 50-inch flat screen, Big Content’s nightmare could be well underway, rendering TV Everywhere a naïve concept in a world where technology is both a legitimate facilitator and the devil on your shoulder.
By 1am I knew who had made it through Dexter in one piece, and who hadn’t, all without the help of the cord, which had been momentarily cut for me by this odd December thunderstorm. I was happy and dry. And Dexter will be back for Season 6, assuming enough of us are willing to pay for it.
Ken, given your experience, how has that impacted your thinking re: media investments?
I agree with you and Stephen King, “wishing doesn’t make it so.” Bewkes got lots of headlines earlier this week bashing Netflix.
However, what he didn’t say was, “Our consumer research and surveys show that our margins are screwed.” Consumers aren’t going to wait around for us to figure out a non-existent way for us to hang onto our same level of profits in the digital content business.
You easily found a pirated episode – and Showtime didn’t make a cent on the episode you watched. What would have been your limit for paying for that episode if it was available streamed at the same time it was broadcast live? $1, $5, $10
If you give consumers easy to access digital content, at a reasonable price, they’ll buy it vs. risking malware via a pirate site. But, media companies won’t hang onto their same level of profits. They need to see the iceberg now and readjust their thinking. Will they be able to do that? I doubt it.
I think that Jeff Rutherford makes a very good point when he states that as long as free content is only available “at your own risk”, there should be a place for TV Everywhere. In addition, I think that media companies may still be able to keep their large margins for some time as long as they are willing to target a very specific customer – the non-connected customer. While the author of this article may be perfectly comfortable in performing a simple search and finding a pirated copy of Dexter online, many Americans today may not have the knowledge or the computing power to do likewise. Internet connectivity is growing rapidly in the U.S., but it is still well under 100%. As a result, people with limited Internet connectivity and/or web prowess may be willing to pay the high premium for cable. Hence, if cable companies want to keep their high margins, they can price their TV offering at a premium, while providing their Internet offering at a discount (similar to Netflix’s pure streaming vs. streaming + DVD plans).
That being said, I realize that the segment of the American population with limited Internet connectivity also tends to have less discretionary income. Hence, it is doubtful that cable companies will be able to charge them a very large premium. In short, cable companies have quite a quandary ahead, and it should be interesting to see what moves they will eventually make.
Hi, Nicole here. This article caught my eye because I too have a crazed Dexter fan in my home. As an employee and satisfied subscriber of DISH Network I’ve had the true ability of TV Anywhere since November. I can watch all my favorite shows on my Smartphone or on my laptop when traveling for work. I happily paid only $99 for the Sling Adapter and I pay nothing more on my monthly bill. The best part is that I have easy access to TV shows on DISH on Demand right over the internet! Don’t let DirecTV keep you from enjoying the good things in TV life.