Is Tivo to Blame for Today’s Demanding Culture of Choice?
By Dan Goman
YouTube CEO Susan Wojcicki sparked a lively discussion on and offline with her recent comments about the company’s plan to offer an ad-free subscription service. This announcement came as a surprise to many, especially considering Wojcicki’s prior position overseeing Google’s advertising and analytics team, and the fact that YouTube’s first foray into paid channels hasn’t fared so well. So why mess with a model that has worked so well that it has amassed more than 1 billion unique users each month across 61 countries in the same number of languages? It all comes down to one thing: choice.
Consumers today are more demanding than ever. They want their content their way and on their schedule. It is this level of demand that is forcing providers like Vimeo, Netflix, Hulu, Spotify and now YouTube to pivot and offer content that is packaged in multiple ways, whether that be the addition of ad-free options, ability to view content on new/different devices, or capacity to access content on and offline. In fact, even the previously unmovable are coming around. CBS already has a new platform in place and starting next year, HBO, and now Showtime are offering its programming on the web to those without a cable subscription. Surely other cable magnates will follow suit. As Bob Dylan famously said “the times they, they are a-changin’” and if players in the media space want to remain viable and relevant, they will need to adapt to their audience’s shifting consumption habits.
In truth, it should not come as a surprise that the public is crying out for more options and less marketing in their media deliverers. As far back as 1999 there was a rising trend to streamline media for consumers to cut back on commercials and aggregate entertainment for viewers. It was called Tivo. When Tivo debuted, it was to some controversy amid its potential to invade users’ privacy by monitoring their viewing habits and making recommendations that resulted in subscription tiers. After various trials and tribulations, including a controversial launch of pop-up ads for a time, the service went on to tremendous popularity worldwide, becoming a household brand name and enduring for several years. Today, the same CableCARD technology is standard for any cable subscription. This could be considered the ultimate foreshadowing into trends we’re seeing now.
So will it work? Sure the addition of an ad-free, subscription-based option will change the essence of YouTube, and there will undoubtedly be those who refuse to engage with the evolved platform. But at the end of the day, consumers seem to respond well to and embrace being empowered with choices and options. The recent fervor around Ello and Tsu’s launches serves as clear evidence that not everyone will stand for sponsor heavy online content delivery. There’s a thirst out there for ad-free platforms. If YouTube can integrate a new, unique paywall system devoid of all the ads that current free offerings inundate us with today, and that won’t interfere too much with the current user experience, and incorporate high-quality video series that consumers deem valuable enough to pay for; I believe we will see a successful roll out. How successful? It will be hard to overcome their current model but there is potential to add a viable new revenue stream to the ledger that could very well be used to fund new original series and exclusive programming.
Dan Goman, Founder and President of OWNZONES, is a recognized technology innovator with a strong background in strategic leadership at Fortune 100 companies including Microsoft, AT&T Wireless, and Lucent Technologies. Goman’s expertise with DRM combined with his realization that a paid content solution will succeed only if it favors all parties involved, led him to found OWNZONES in 2010. Prior to creating OWNZONES, Goman spent 15 years in the computer sciences industry as a technical engineer and consultant, directing large cross- disciplinary teams.