Seth Shapiro on why TV continues to thrive, when print, music and movie media do not.
We spoke with Seth Shapiro last year about his favorite topic, TV.
Please tell us a little bit about your background, and why your company is called New Amsterdam Media?
I am from New York originally, a city where the Dutch — American connection is obvious. The stock market, a new invention at the time, was created by the Dutch. While attending the University of London I started travelling to the Netherlands and fell in love with the people and culture. When the time came for me to realize a foreign outpost I started looking for a home base in Europe and settled on Amsterdam. Inspired by the Dutch stock market innovation that is the current Wall Street I decided to name my consultancy business New Amsterdam Media.
What is the most important thing that has happened in the TV industry in the past decade?
The overarching one is this huge shift from a linear environment to a non linear place. The movement from ‘appointment TV’ to random access TV. You can watch as little or as much as you want anywhere, anytime and on any device. This influences the limits imposed by business rules tremendously.
Most TV business models percolated first in the US, where we had a number of small broadcast networks followed by cable in the nineties. But you still had to be there to watch the show. The constraints to when you consume TV started to change with the DVD box set, DVR and this change coincides with the HBO era and ‘The Sopranos’. The change in how audiences where able to watch TV, on demand, allowed the stories and narratives to change from the old days of TV, when it was designed to watch stand alone.
Before these technological changes, people might see only 7 or 8 episodes of a 20 episode season. DVR and Netflix changed this; you could count on the fact that your audience could see each episode.
The business part of it changed the creative part of it, because you didn’t have to miss an episode and you could watch in any order. Audiences can now watch on demand and consecutively, opening the door to a different kind of story telling. Dickens is the original architect of this type of narrative, he got you to buy another magazine to get the next episode. Great examples of this are shows such as 24 and LOST, which were only possible because creators of the show knew their viewers could catch up and watch each episode.
TV now becomes the dominant art form of our time, creating huge multi year canvases. I talk about this in my book, TELEVISION — The Story of the World’s Most Powerful Medium, coming out in Spring 2016.
What do you think will be the most important thing to happen in/to the TV industry in the next decade?
The downward pressure on the existing cable model, mostly in the US is going to greatly influence the TV landscape in the next decade. 90 million households are paying for a cable package of which they only watch a certain number of channels. AMC is a great example of how the cable model worked well, having made millions from the cable networks they were able to create shows like Breaking Bad and Mad Men, shows that belong in the Top 10 shows of all time. They had the money to create this immensely successful and quality TV.
What is going to happen when the cable network subscriber realizes they have the choice to not opt in to a cable subscription? To watch more shows a la carte. If the cable network model starts to decline, will the networks move to Netflix or other subscriber channels?
The other big question, as a new generation comes up that has grown up on YouTube and online content, will they become part of the traditional TV group or not? Will they purchase multi channel packages when they are 20?
How can all TV content providers stay relevant for the younger demographic?
In short, they can’t, most wont be able to do it, and some of them will, some of them won’t. Viacom, which owns Nickelodeon and MTV is a great example. Kids don’t watch Nickelodeon anymore. They’ve moved on to Netflix, which has an enormous offering of kids TV. CNN, CNBC and Fox News are all news networks that cater to the older demographic. They will not appeal to 20 year olds, they have not found any successful way to engage this younger audience. Outlets like VICE are picking up the slack.
Some of these giants will have to go away or radically transform themselves.
We’ve seen a lot of consolidation, with TV operators acquiring broadcasters and networks. And no major production company remains independent. How will this go forward?
The biggest success story in roll up production companies is Endemol Shine, by far the largest home of production companies. While they are hugely successful, independent productions companies do have a place in the TV market. Look at the recent Netflix Original ‘Narcos’ and last years award winning success ‘Transparent’; original content will always be created and picked up by either cable networks or companies like Netflix, Hulu and Amazon Productions.
Compared to print, music and movies, the TV industry has been pretty resilient to disruption from startups and Silicon Valley giants. Why do you think that is?
In short, because music, movies and print had business models that were relatively easy to disrupt and damage in the digital age.
These businesses, doing so fabulously in the twentieth century, were allowed to do so well because supply was constrained. There were only about 6 records labels, a few publishers and studios. So people went along with what they could find. TV was this way originally, but things changed with the Cable TV revolution.
Dramatically increased supply ensued, TV went from 3 networks to 4, then in the nineties to 50–100 cable networks. By the time digital came along, it destroyed the model of constraint for music, and movies, think Napster, iTunes and Bittorrent. Print got hit by blogs and new news services because newspapers were the only game in town.
The movies, print and music industries didn’t adapt or find expanding business models such as the TV cable bundle, giving people an abundance of choice with hundreds of channels for about $85 a month. These cable subscriptions were, are, where it’s at and has allowed TV to endure and even thrive during this digital age.
Traditionally the US and Europe have dominated TV production and distribution. As you consult for media companies in both continents, what do you think each side of the Atlantic can learn from the other?
I think that Europe has been a better market with regards to adult sensibilities, offering quality content for adults. The US broadcast era was really puerile. American sensibilities didn’t allow any swearing, violence or skin showing. The creative minds of the US admired the European TV market, where meaningful, character driven content for adults was being created. For a long time, TV in America was dominated by sitcoms and wasn’t very nuanced. That has shifted as markets have become more similar.
The format business has been a European driven business, successful formats such as The Voice, that have travelled from Europe to us have proven that European formats can work in the US market. Other wildly successful shows such as Homeland and In Treatment originated in Israel. This demonstrates to the American market that thinking people content, a high quality genre of TV shows can work.
In turn Europe and other continents can be influenced and learn from the growth of non-linear offerings from Netflix, Amazon, Apple and HULU, all American born.
DVR, subscription, and non-linear video on demand, originating in the US, will keep influencing other continents with content created specifically for those markets. Netflix for instance has proven very successful in the Netherlands and has been embraced by Dutch viewers.
New formats and distributors are emerging from other parts of the world, like LatAm and Asia. Any markets or players that you find particularly interesting?
Brasil has proven that formats that have grown indigenously can be successful in other, less obvious markets such as South Korea. This is remarkable. Again, ‘Narcos’ is a great example, this is not an American show, it could have been made specifically for South America and other Spanish speaking markets, but it works in an English market and is wonderfully entertaining.
These success stories prove that we can watch TV from other countries, in the native language. These shows do not have to be re-formatted or repackaged, people can adapt and work a little to enjoy quality TV. Because the language is not familiar to the audience, they cannot second screen and have to keep their eyes on the first screen, this is a brilliant example of the future.
Maybe a few years from now we will be watching a show half in English, half in Chinese, giving a better view into Chinese culture. This multicultural market is a wonderful thing, and anthropologically very interesting. The movie business has been doing this for years, stars like Tom Cruise have a huge fan base in Asia and his movies perform very well there.
You are interactive media peer group Governor at the Television Academy, which is one of the cooler titles we’ve come across. What is the Television Academy doing in this space and do you have some favorite examples of these new opportunities in social media, interactivity, trans media and video distribution?
The TV academy is dedicated to advancing TV in specific categories, performance peer groups and to acknowledge major work in new areas such as social tv, multi platform, user experience, and original content. Pointing the way to new forms of media, which we want to celebrate and encourage.
A few examples; there is a variety show called hitRECord, starring, created, and directed by Joseph Gordon-Levitt, described as the online community’s biggest collaborative project to date, hitRECord on TV was made from contributions by members of the hitRECord community around the world. A truly collaborative effort that combines variety with audience contribution.
@Midnight with Chris Hardwick is another good example. This show consists of clips, gifs, pictures, in a series of Internet inspired improv games.
Jimmy Fallon has done a great job in finding an audience that doesn’t even watch his full show but takes it in one clip and social media update at a time. Ellen Degeneres is also doing a great job of combining TV with social media.
In terms of new innovations, a huge break out will be virtual reality, and really experiencing the show, in stead of just watching. With circle TV, you can pan, move forward and feel as though you are moving through the video experience. You can do it from a browser, and you don’t need to wear traditional virtual reality glasses.
An older project that is still worth mentioning is the Johnny Cash Project. These guys took the Johnny Cash song ‘Ain’t no grave’ and solicited art contributions of the participant’s impression of Johnny Cash. Strung together and played in sequence over the song, the portraits create a moving, ever evolving homage to this beloved musical icon.
Amp.it and Take back the mike, a sort of hip hop show, where these guys created the platform amp.it is also super successful in the US, Brazil and Colombia. Amp.it is a cutting-edge social network that rewards fans for discovering & sharing new music. This is an amazing project that deserves more acclaim. This platform is a great way to surface new artists and gives the audience an innovative online experience.
Since we sat down with Seth he has published a book. His insider view of television history offers invaluable lessons for executives, entrepreneurs, creatives and marketers in all industries.