Monday, August 31, 2015

Arguments for a content bubble

First off a quick lesson in the importance of good blogger housekeeping. It is important to keep track of what you have and have not posted . A number of times, I've caught myself starting to write something virtually identical to one of my previous posts, often with almost the same title. At the other into the spectrum, there are posts that I could've sworn I had written but of which there seems to be no trace.

For example, living in LA, I frequently run into people in the entertainment industry. One of the topics that has come up a lot over the past few years is the possibility of a bubble in scripted television. Given all that we've written on related topics here at the blog, I was sure I had addressed the content bubble at some point, but I can't find any mention of the term in the archives.

One of the great pleasures of having a long running blog is the ability, from time to time, to point at a news story and say "you heard it here first." Unfortunately, in order to do that, you actually have to post the stuff you meant to. John Landgraf, the head of FX network and one of the sharpest executives in television has a very good interview on the subject of content bubbles and rather than "I told you so," all I get to say is "I wish I'd written that."

But, better late than never, here are the reasons I suspect we have a content bubble:

1. The audience for scripted entertainment is, at best, stable. It grows with the population and with overseas viewers but it shrinks as other forms of entertainment grab market share. Add to this fierce competition for ad revenue and inescapable constraints on time, and you have an extremely hard bound on potential growth.

2. Content accumulates. While movies and series tend to lose value over time, they never entirely go away. Some shows sustain considerable repeat viewers. Some manage to attract new audiences. This is true across platforms. Netflix built an entire ad campaign around the fact that they have acquired rights to stream Friends. Given this constant accumulation, at some point, old content has got to start at least marginally cannibalizing the market for new content.

3. Everybody's got to have a show of their very own. (And I do mean everybody.) I suspect that this has more to do executive dick-measuring than with cost/benefit analysis but the official rationale is that viewers who want to see your show will have to watch your channel, subscribe to your service or buy your gaming system. While than can work under certain conditions, proponents usually fail to consider the lottery-ticket like odds of having a show popular enough to make it work. And yet...

4.  Everybody's buying more lottery tickets. The sheer volume of scripted television being pumped out across every platform is stunning.

5. Money is no object. We are seeing unprecedented amounts of money paid for original and even second run content.

For me, spending unprecedented amounts of money to make unprecedented volume of product for a market that is largely flat is almost by definition unsustainable. Ken Levine takes a different view and I tend to give a great deal of weight to his opinions, but, as I said before, Langraf is one of the best executives out there and I think he's on to something.

1 comment:

  1. I was just thinking about something related the other day. I love old-style pocket paperbacks, it's so pleasant to know I have a book in my pocket. Anyway, I was reading an Eric Ambler novel from the early 1950s and I was thinking how this is a pleasurable experience, something comparable (although of course not the same as) watching episodes of Breaking Bad. Breaking Bad is such a major undertaking, tons of writers, actors, set designers, etc. And Eric Ambler is just one guy. But the experiences aren't so different. I don't know what this all means, but it's hard for me to understand it all within the usual confines of economics.