Wake Up, Network People!

I was part of a conversation the other day with the CEO of a niche animation company. He explained the company’s digital strategy, which was to drive audiences solely to its website because, as he boasted, once your living room television talks to the internet, people will navigate to his company’s site and it’ll have “twice as much value.”

Three things came out of this for me: 1) a Santa-esque belly laugh, 2) yet another reminder that the leaders of a whole lot of content companies are paying attention to the wrong things, and 3) the opportunity to hypothesize on what actually might happen when your TV does merge with the web.

This discussion is particularly timely because Google and Apple have finally trotted out TV initiatives. As these behemoths compete to be the next platform in your living room, I’m curious what it all means for the traditional TV networks in particular.

There are two kinds of TV networks out there: the few that have a brand in and of themselves and the majority that don’t. In other words, I know exactly what I’m getting with The Food Network. But NBC itself means virtually nothing to me. The problem is that most networks don’t actually understand this. One of the tricks Hollywood plays on TV networks is to let them think that they each represent a distinct brand. If you ask any network boss, he’ll list all the things that make his brand unique. But an airline boss will give you the same answer, and we all know that the airline business has become simply a commodity; you go where you get the best price.

Network brands matter because Google TV and Apple TV will essentially be in the business of letting you search directly for your favorite shows instead of forcing you to stop off at a traditional network first. So if I’m using the Google TV platform, why would I add the needless step of going first to the NBC app when I can just search for Friday Night Lights and have it pop up immediately? At that point, do I really care where my show is sourced from?

Moreover, Google and Apple will be in a position to use information about your favorite shows to recommend other ones from the entire universe of content, not just those from a single TV network. To be sure, this trend has already begun. For instance, I saw a product the other day called Peel that turns your iPhone into a remote control for your TV. But what makes it special is that it’ll grab your favorite shows from the first place it finds them and will recommend similar ones as well. (If this isn’t an acquisition candidate for Google TV, I’m not sure what is.)

Interestingly, most Americans don’t recognize that the U.S. TV networks actually own very little of their programming. Instead, it’s the studios that finance and own the shows, while the networks merely license and distribute them. So in this emerging world, if I’m a studio with a new TV series, I can certainly see why I’d continue the current practice of licensing it to a TV network to do the heavy lifting of building a following. The network here essentially acts like Major League Baseball’s farm league, building prospects into maturity.

But if that TV program becomes a big brand in and of itself (think The Office) and if Google TV is simply going to pull it from the first place it finds it, what does a studio need networks for—particularly a brandless one at that? It wouldn’t be long before the studio guys became “hoarders” of their best content, cut out the network folks, and kept all the Google TV money for themselves. Even in cases where the studio and network are owned by the same corporate parent, corporate love only exists at the company retreat, and we’d quickly say R.I.P. to the NBC and ABC we know. It could fundamentally change the networks’ place in the content food chain.

Consider then that there are parallels here for any owner or distributor of content of any kind—books, magazines, news, software, technical information, and way beyond. And now consider whether those content owners should see the most value in being a hoarder … or a farm league.

To be fair, this is all a long-term proposition, so don’t cancel your cable television service just yet. But if our favorite content players aren’t paying attention to what can make their platforms more relevant in this evolution, they’re doomed. And sadly, most are not.