(Private Advisor, December 2018 Issue) The shorter season is a reasonable reply to the rising demand for original content, and, connected to it, a presumable aversion to reruns. If, as a FX report shows, nearly 500 hundred new series have been produced during 2018 in the U.S., it is clear that rolling out this huge amount of content requires a large investment that advertising, subscriptions or foreign markets won’t be able to pay for.
Binge viewing poses an additional hurdle: the life cycle of any series is severely slashed if its audience watches several or all of the episodes in one or a few sessions. Vintage linear television offered, say, twenty-three episodes with several repeats. Now, there’s little success to expect from repeating an episode premiered a few weeks ago, no matter how brilliant it is. If its premiere is highly publicized, at it is happening with billboards touting new Netflix releases, the series may become legacy in four or five weeks. A worldwide release, often required to curb piracy, doesn’t help either.
The irony is that all this disruption is not news: it was forecasted by Darcy DiNucci, a brilliant designer, in 1999 --nearly two decades ago-- when defining what she named Web 2.0, a denomination later widely adopted but often attributed to Tim O’Reilly, who started using it in 2003. The DiNucci article, published in Print magazine and titled "Fragmented Future", is available on the Web in a PDF version... digital uploading was not an extended practice at that time.
In this article, Ms. DiNucci focused strongly on the effects on human relationships, and design, she expected to happen with a ‘world of myriad, ubiquitous Internet-connected tools, often referred to as appliances’ and a result she found ‘inescapable’: ‘web design, programming and production will split into fragments mirroring the fragmented Web appliances scene’.
The writer expected that the industries affected by this fragmentation would, ‘in the end, along the line’, set standards for different devices, mentioning ‘one for cell phones, another for game machines, and one for household appliances’. The ‘household appliances’ part may be understood nowadays as to be required by the Internet of Things (IoT). But, on a worldwide level, the content industry has been so far unable to set a common standard for mobile reception of video content.
Anyway, at this time we should focus on the ‘fragmented’ part of the new scenarios. At the end of the day, it’s a new chapter on the ongoing controversy between the ‘scarcity’ business model, (charging as much as possible to a certain level of consumers), imposed by Hollywood, and the ‘multiplicity’ model, which sets a price low enough to be accepted by a large number of consumers (The Apple iTunes pricing strategy has been a clear example of this), promoted by Silicon Valley.
The ‘nano payment’ world
So far, the ‘multiplicity’ model, embraced by the OTT’s emerging in different parts of the world, has met a roadblock in low-income regions, such as Latin America, where a small part of the population carries credit cards. Streaming services are priced to appeal to the households and individuals that find linear pay TV subscriptions too expensive --up to 165 dollars per month in the U.S., from 30 to 60 in Latin American markets-- but only a few of them (Netflix, Amazon, those owned by the local or regional telcos) have been able to collect monthly fees from low-income customers at a reasonable cost. An independent OTT service within Latin America may currently be asked to pay a collecting fee of up to 60% of the subscription to those who offer these services. A less expensive alternative is to sell prepaid vouchers at supermarkets and retail stores, but it also requires getting involved with some organization that can handle this task.
In the past year there has been some progress in this field through fintech and Internet-collecting companies that are slashing the cost attached to money remittances and therefore making possible the collection of smaller payments. As mentioned before, at the recent NexTV CEO conference in Miami several cable operators and telcos from Central America and the Caribbean narrated prepaid SVOD experiences priced at $5 or less, allowing low-income viewers watch the most exciting soccer games highlights after the game, or allowing access to pay TV during a single journey.
The ‘nano payment’ resource is a new tool for reaching audiences unable to pay for regular entertainment experiences. But it also opens a wide new world to impulse purchases, based on the existence --for every human being-- of a threshold under which there is no rational consideration of the amount of the expense against the pleasure it provides. An individual may open an account and charge the cost of his or her impulses as easily as phone calls are charged against a prepaid card or account.
But, this will result in another sea change for the way content is offered. ‘Nano payments’ may, for instance, be applied to the ‘best moments’ of a series, or a selection of scenes from different shows. You’d be able to order a selection of scenes from movies featuring Elizabeth Taylor or Humphrey Bogart, as well as quotes on any issue from TV shows, for instance, "lizards", and many other short-length alternatives. Of course, this will imply a tremendous challenge to Intellectual Property (IP) management, but nobody expects the future to be easier to handle. After all, these are disruptive times.