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CES '16: Binge-Watching Is Fundamentally Changing TV

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Binge-watching is nothing new, but it is radically changing how networks and other content owners are approaching TV shows. That was the consensus at a panel today at CES called "The Future of TV: From Primetime to Multi-Platforms."

"People have binge-watched for a long time," said Brad Dancer, EVP of research and program planning, National Geographic Channel. "We used to call them TV marathons. I'm from the original MTV generation, and I'd spend all Saturday watching 9 episodes of Road Rules. But it's different now. Ten years ago people would watch stuff that was just OK, but you can't get away with that anymore. The question 'Is it binge-worthy?' is really just another way of saying 'Is it good?'"

With consumers accessing multiple platforms, viewing on multiple devices, and able to easily watch entire seasons of not just current shows but archival ones, the landscape is more competitive than ever, said Michael Thornton, chief revenue officer at Starz. "You have to make that show be not just the best show of that season or that year, but the best show of all time," he said. "If someone is binging on Spartacus or The Sopranos, they're not binging on your show."

On the other hand, that access to previous seasons on Netflix or Amazon Video means that rightsholders can take a long view when it comes to commissioning or buying TV shows. "You have to trust the producers, you have to trust the writers," Thornton said, "because it may take a year or two—or three or four—before it catches on."

Social media platforms like Facebook and Twitter are becoming increasingly important, as it becomes harder for viewers to find content they want to watch than in years past. "The whole concept of discovery and how people find stuff could not be more important," said Lisa Hsia, EVP of digital for Bravo and Oxygen Media at NBC Universal. "Show websites are of limited use, because people already have to be a fan of the show to come to the site. Facebook is a great way to reach bing audiences."

Sharon Mussalli, U.S. industry manager, entertainment, global marketing team at Facebook said that the social media platform can bring an up to 20% increase in audience for TV shows, typically by offering short-form videos that show up in Facebook users' feeds, particularly ones who are looking at their feeds on their phones or tablets.

"It's all about mobile, mobile, mobile" Mussalli said. "A year ago we were talking about the shift to mobile, but today the shift has happened. Facebook gets 8 billion video views daily, 70% of which are on mobile. For TV, majority of consumption is still in the living room. Television marketers have been looking at short-form content on mobile to encourage consumption in the living room."

Using digital marketing and distribution as a way to get viewers to the television is still the goal of most content owners, as revenues from OTT have yet to catch up to broadcast and cable. "The television bundle generates $150 billion annually, half from advertising, half from subscription fees," said Laura Martin, managing director and senior research analyst for Needham and Co. "With Hulu and Netflix, all the money goes back to the same guys that make the content for the linear TV channels. There's not an economic model for digital, For instance, WWE generated 7 billion impressions on YouTube, but only generated 7 million dollars revenue in the last year."

Martin said that the average content owner makes 30 cents per hour per viewer from TV, 3 cents an hour from YouTube, and 11 cents an hour from Netflix. It's important that content owners look at online revenues as supplemental, and not primary, she said.

By targeting "high-value viewers" on platforms like Facebook, though, broadcasters can see significant gains in both viewing and awareness. "Broadcasters can build audience for the screen that matters for them," said Mussalli. "We've seen broadcasters use 15-second videos on Instagram, then retarget on Facebook with a 30-second video, then push to the third screen. They exhibited 18-point lift in recall, and a 7-point lift in awareness."

And no matter how popular binge viewing is, passive viewing isn't going away. "Out of 100 million TV homes, 50 percent have a DVR, and 40 percent have Netflix, and some of those Netflix homes are also DVR homes," Martin said. "So half the homes can't binge watch."

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