This is a question I get asked quite a lot and there is really no right answer for this. Mainly no network needs to conform to the ‘norm’ but there are some underlying reasons why a TV network wouldn’t go to a paid streaming service. First things first, though, I need to give you a little back story…don’t worry it will all make sense in the end so stick with me.
So let’s begin with the different ways TV shows get money. When a show comes out initially, they get money from places like:
Merchandise Licencing Syndication
But most of all, they make money off ads. The more popular the show the more the network can charge for ads. So how does this affect online streaming services?
Well, firstly online streaming services aren’t going to affect merchandise or licensing. They would still run like normal regardless of the medium. You can still sell toys, t-shirts, and even DVDs. You can also sell the license to show the show on other networks around the world. The next item is syndication, now this isn’t really affected greatly by an online streaming service as you can still sell the rights to the show and allow it to be shown on other networks as well as the streaming service. What it will affect with syndication is the fact that a user won’t wait for an episode when they can just pay for a service and watch it anytime. The main thing that gets affected is ad revenue.
Firstly we are ‘programmed’ in a way to expect to see ads on free services, things like YouTube, FTA (free-to-air) TV, Facebook, etc. When viewing videos on these sites we expect to see these ads, however, once we get to the paid services like Netflix, Hulu, Stan etc…we don’t expect to see ads. This here is the problem, TV networks need to make sure they are making money off the paid service that makes them more money or at least the same money as the ads on normal TV.
When you think about it, though, having a streaming service for your network does make sense, mainly for older series. Other ways these networks can have a streaming service are sold licenses to services like Netflix but like I said, just because services like Netflix are popular doesn’t mean they have to but eventually they will.
Anyway till next time…