Broadcast to FAST (Part II)
The Evolution of Television and Distribution
Previously On…
In our previous discussion on the history of broadcast television, we examined the development from local TV stations and the “Big Three” (later “Big Four”) networks, as well as the infrastructure and technology needed to distribute this content. We also discussed the evolution of cable companies from “Community Antenna Television” into a platform hosting networks with prominent premium content, challenging the dominance of broadcast television.
At this point in time (the late 1990s and early 2000s), many were opting for 200+ Channel Bundles loaded with sports and premium content from HBO, STARZ, and Showtime.
The broadcast networks still had techniques for attracting an audience; NBC was able to retain viewers with a very popular Thursday night lineup with sitcoms including Friends and Frazier, leading into a popular drama E.R.
However, the lead up to this point seemed to focus on variety and adjusting said variety to the viewing preferences of the audience. The next set of big changes, as we’ll learn, focused more on viewing habits and methods.
TiVo and DVR
TiVo arrived to a huge reception in 1999. Instead of popping a blank VHS tape into a VCR, viewers could digitally record their favorite shows to a hard drive for rapid watching later. The digital recording slowly enabled features like the 30-second skip (a common duration for advertisements). Viewers could plow through significantly more of their favorite television in less time.
The early TiVos worked by intercepting the output of your existing receiver box, which at the time was commonly a cable box or a satellite receiver, and controlling said device with an IR Blaster that would emulate and automate your remote control.
DirecTV soon partnered with TiVo for satellite receivers with the TiVo interface baked right in. It is important to note that the TiVo interface was a huge improvement to existing receiver interfaces at the time in addition to the DVR time shifting technology that came along with it.
A group of TiVo enthusiasts (myself included) soon identified the hardware and software configuration of the device and added several features, such as custom on-screen alerts like news and caller ID. Later, it became possible to extract video from the hard drive and store or transfer it to other media for long-term use. This effort was largely personal, aimed at addressing the difficulties associated with storing old VHS tapes of favorite shows or events.
This issue persists today. When a local small-town school reaches the state finals for various sports and appears on television, parents may wish to record and store these events on a medium such as done with VHS for long-term preservation. Currently, there is no straightforward method for most viewers to retain and enjoy this level of local sports over the long term.
As TiVo was able to command its own subscription fee (which covered software updates, support, and program data) – cable companies were looking for ways to capitalize. This led to cable boxes offering a more generic DVR capability enabling the cable companies to offer a new premium service for a surcharge that slightly undercut TiVo’s fees.
Note, in the late 1990s and early 2000s, these storage sizes were small – sometimes around 14 hours or 30 hours of standard-definition storage. This was limited by the size of physical hard drives at the time that enabled the digitized storage.
While these small hard drives didn’t allow viewers to record entire seasons of multiple shows and binge them all at once, it was a move towards new entertainment consumption models.
Binge on DVD
Chronologically speaking, the concept of "box sets" for entire seasons of popular TV shows is worth discussing. It is important to note that earlier formats such as VHS offered "Collector’s Sets," which included a selection of favorite episodes from a season. However, due to the physical size constraints, a complete season of a drama series (typically comprising 22 to 26 hour-long episodes) would require twelve VHS cassettes. The advent of DVD technology marked the rise in popularity of box sets of entire seasons, thus facilitating the trend of binge-watching.
These box sets were very competitive in price, adding to the appeal. Entire seasons of drama shows would sell for about $20-$25. Viewers perceived these prices as being more than fair for entertainment time offered, and most certainly when you compare this to the rising costs of taking a small family to the movie theater for just a few hours. Additionally, these price points allowed viewers to catch up on signature shows such as The Sopranos, without having to pay the premium for HBO if that was the only content of interest from that network.
Highly serialized shows benefited from this manner of viewing. An example of this would be Lost on ABC. While rather popular in season one, there were many that had not watched. Word-of-mouth buzz led to strong interest, and viewers opted to buy the season one box set to catch up on what they had missed.
Lost (Season 1): 15.7 million viewers (ABC broadcast)
Lost (Season 2): 18.9 million viewers (ABC broadcast)
As Lost was highly serialized viewers would have been wildly confused on the various story lines and season one cliffhanger if they simply joined along in watching on season two. You may be able to conclude that the 3.2 million additional weekly viewers for season two arrived after having binged on the DVD box set of season one.
On-Demand
On-demand programming was also introduced during this period. Cable companies provided this service to allow viewers to catch up on recent programming if they missed recording it or were unable to watch it live. This system required the viewer to navigate a series of menus on an advanced model cable box, which would then prompt a remote server to send digital content to the cable box, functioning as an early version of modern streaming. This was well before streaming via Netflix, Paramount+, Disney+, Hulu, and so on. This on-demand content will have ads inserted at the usual commercial breaks; these ads may be highly targeted/customized providing a decent amount of revenue to the cable network or brand offering the content, which is shared with the cable service provider.
The variety of early on-demand content availability was always unclear. Not all networks supported it or had significant limitations on how and when the content could be consumed. This situation allowed cable companies to offer viewers the ability to watch shows earlier, which could reduce the viewership of local station broadcasts of the same programs. At that time, Nielsen Ratings were used by networks and affiliates to set advertising fees. Additionally, broadcasters and studios generated revenue from DVD box sets. If cable companies had the rights to offer entire seasons or multiple seasons via on-demand technology, the incentive to purchase these revenue-generating DVD box sets would decrease.
On-demand services remain prevalent today, including platforms such as YouTubeTV, often enabling viewers to catch up on the current season. Licensing agreements frequently allow an entire season to be transferred to streaming services like Netflix or Hulu once a season is complete and a few months have passed; meanwhile the current season is typically granted exclusivity rights to a broadcaster. This model, however, is continually evolving. For instance, the popular show Yellowstone (produced by MTV Entertainment Studios) initially airs on MTV's sister network Paramount and is subsequently licensed to Peacock (NBCUniversal). Nevertheless, episodes from the current season are available via on-demand services, allowing viewers to stay updated while granting Paramount Global priority in benefiting from advertising revenue.
Netflix
It’s quite easy to forget that Netflix was quite different just a few years ago.
Before continuing, note that in-home bandwidth from Internet Service Providers evolved slowly, limiting early streaming options. Movies and music could be downloaded via services like iTunes, but real-time standard definition viewing without interruptions wasn't yet feasible due to compression and bandwidth limitations.
Netflix commenced operations in 1998 with an innovative service model. The company provided monthly subscription plans that allowed DVDs to be mailed directly to subscribers from a queue established online. These subscription plans varied based on the number of discs in your possession at any given time, and later included a surcharge for Blu-Ray options. The delivery system utilized a simple paper envelope to facilitate easy returns.
Netflix enhanced its distribution efficiency by establishing multiple regional distribution centers (or hubs), thereby reducing delays between the return of a disc and the shipment of the next title in the viewer's queue. For subscribers with plans allowing two or three discs to be checked out simultaneously, the 2-3 day turnaround for exchanging discs was perceived as minimal.
Netflix focused on maintaining an inventory of slightly older titles or classics rather than investing heavily in the latest big releases, which was Blockbuster's strategy. Netflix attracted viewers who were content to create a queue of these titles, including cinema classics they had never seen before. Many users utilized lists such as the AFI Top 100 to learn about significant films. This approach provided the convenience of always having unseen content available, without the need for frequent trips to a physical store like Blockbuster (two trips, one to rent and one to return). Netflix didn’t have any late fees. Blockbuster did.
The dismissal of Netflix’s flat rate subscription model by Blockbuster undoubtedly led to Blockbuster’s demise. Blockbuster attempted to play catch-up, but it proved to be too late. Additionally, this subscription model served as a model for other studios to launch their own streaming services. (To the point of much of the population wondering why they are paying so many monthly fees for everything today.)
It’s important to note that Netflix also offered TV Show DVD Box sets in their inventory. You’d only receive one disc of the season at a time, but with Netflix’s efficiency hub distribution, this was not a factor of concern for most subscribers. This further enabled binge watching, which proved to be a key element in the next phase of Netflix’s evolution.
iTunes and Amazon
While never obtaining the popularity of DVD Box Sets, a significant number of people soon migrated to buying digital copies of TV Episodes or Seasons via iTunes and Amazon. This allowed the benefit of downloading a digital copy to tablets and other mobile devices, which was becoming more popular for travel at the time.
Many were hesitant to try this method of buying content. fearing that restrictive licensing may cheat users from digital content they had paid for. However, others found benefit in reduction of storage of physical media, or feeling as though they’d have to go back and buy physical media once standards evolved. (Many were frustrated at having purchased the same content on VHS, then DVD, and then later Blu-Ray). If I personally recall correctly, both Apple and Netflix offered an upgrade from SD to HD for certain content at a reduced price.
While this on-the-go, consume as you’d like digital content was still an evolution, it still wasn’t the real-time streaming we enjoy today.
To Be Continued…
Linear methods, such as cable and broadcast, were decreasing in popularity in favor of new digital options and new flexibility in consumption. Viewers were eager to enjoy the content they wanted, when they wanted, with appropriate levels of convenience that they had not experienced before.
Coming up next, we’ll look at the launch of the streaming services and the impact of the quality to broadcast content.