Direct Global Distribution Models for a Global World / What the TV Industry Can Learn from Hollywood

[NB: While I’m talking specifically about the (US) TV industry in this post, the principle of direct global distribution to reach the global audience is applicable for pretty much any medium that can be digitized.]

In this blog, I have again and again referred to a variety of trends that currently impact entertainment consumption around the world immensely. I will not go into detail on each of these because I have done so before, but I will compile them in a quick re-cap so we’re all on the same page:

  • Audiences around the world become increasingly inter-connected across national borders
  • Consumption itself has become global: audiences around the world watch the same movies, the same TV shows, read the same books, and play the same computer games
  • Consumption has also become inherently social: Fueled by social media and the interactivity of the internet, we can now discuss our favorite and most hated products with consumers around the world
  • At the same time, entertainment content (and many other products) have become extremely niche and focused on a particular segment of the audience
  • Entertainment experiences in particular have become a shared experience on a global scale; e.g. awaiting the opening of a movie, the publishing of a book and/or its sequel, the sale of a new computer game
  • Piracy is escalating
  • A growing amount of people around the world speaks either English, Spanish, or Mandarin
  • The internet offers a (technically) globally accessible space without the need of linear, 24-hour programming
  • The internet becomes available to a rapidly increasing number of people everyday, particularly in Asia
  • Companies like Amazon, PayPal, and Apple have set up global electronic payment structures
  • Companies like Amazon, Google, and Facebook have created powerful user-profiling mechanisms that allow for carefully targeted advertising
  • While domestic cinema attendance is gradually dropping in the US, international cinema attendance has been increasing steadily, along with international box office revenues (particularly for Hollywood studios)
  • Fans and fandoms are using the interconnectedness of the internet to organize on a global scale and to become even more vocal about themselves and their fan objects


What this all boils down to, then, is that for the first time in history, entertainment producers have a truly global audience, the mechanisms to reach them, and the methods to charge them.

Unfortunately, television producers in particular fail to make use of these great opportunities, particularly when compared to other industries, movies in particular.

Hollywood, for example, recognized the revenue potential of international audiences early on (i.e. the early 1900s). Even as the US market remained their primary market, film studios in the US ensured that their movies could be sold abroad as well. International premieres in big film markets around the world have become common and most recently have also included regions like Russia, Brazil, and India . Particularly within the last ten years Hollywood has become the king of global marketing hypes, synchronized release dates, and international franchising.

Their system is not perfect, of course, and you still have situations where even big blockbusters like Twilight Eclipse or Tron are released months later in important markets like Germany, France, India, or Russia. But still, Hollywood has definitely figured out exactly how to make the momentum created by internationally shared consumption and international distribution work for them.

The TV industry, on the other hand, spent years developing its elaborate syndication system where the owners of a TV show rent out the broadcasting rights to their show to TV stations everywhere in the world, in return for cash or other shows’ broadcasting rights. While this system has worked very well in the past, I believe that it is completely unfit for the demands and consumption behavior of today’s and future audiences. TV show syndication has always generated revenues for its original producers, but has also left them with minimal control in terms of how their series is aired by the stations buying the rights to a show – what day, what time, and even, in what order. As a result, in the current international TV syndication system, global collective viewing is virtually impossible.


What can TV networks learn from Hollywood, then?

As I mentioned above, Hollywood has become a master at creating global marketing hypes surrounding the release of their newest blockbuster. Audience members around the world spread the excitement, talk about going to midnight showings and previews, share movie trailers, and end up pulling in their friends and families as well, even if their friends and family usually do not like the genre or type of a movie in question. All in all, the film industry has perfected the art of creating “must see” movies. If you haven’t watched, or at least, know what happened in the latest Harry Potter/Transformers/Pirates of the Caribbean/Sex and the City/Hangover/Twilight/Hunger Games/Star Trek/Marvel/etc. movie, you’re a social outsider. However, per franchise, Hollywood only has the possibility of such big openings and fan momentum every other year.

Television, on the other hand, has the possibility for such big hypes every week. And in the US, they’re making use of it. TV networks have become incredibly adept at generating social media buzz surrounding the airing of a show’s new episode. Trailers, teasers, interviews with actors, tune-in reminders, fan votings – it’s all there, but only for North American fans. Because in international TV syndication, the majority of a show fans (i.e. including international viewers) do not get to see a show’s episodes until at least several weeks or months after its original air date. So while fans around the world are included in the social media marketing and social media buzz surrounding the airing of a show’s new episodes, they are excluded from the airing itself.

Of course, many fans won’t wait for weeks until their local TV stations will finally air the episodes in question. They don’t want to be left out of the global talk after the newest episode of their favorite show airs. Even if they are not from the US, young people around the world speak and understand English extremely well, so it is absolutely no problem for them to find, watch, and understand a pirated copy of the most recent episode online. In addition, many fandoms posses fan-subbing communities, where bilingual fans create pirated episodes of a show with subtitles in many languages including Mandarin, Spanish, Russian, Portuguese, etc. These fan-subbed episodes can also often be found online a few hours after a TV episode aired for the first time.

Needless to say, watching pirated copies of a show’s episodes means financial losses for the show’s producers, and most likely also for the local TV networks that buy the local broadcasting rights to the show as most viewers probably wouldn’t watch an episode again once they’ve seen it.


How Can TV Networks Adjust Their Distribution to the Demands of Contemporary Entertainment Consumption?

TV networks are already off to a good start. Both their own marketing departments and the technological and social possibilities of today are in their favor. In order to really cater for contemporary and future audiences, however, the most important step for them is to make their new episodes available online as or just after they air on TV for the first time, without any restrictions for other countries. Of course, the episodes shouldn’t be available for free. TV networks could use existing online stores like Amazon or iTunes, for example, for an easy distribution- and payment-system, or could use their own website in combination with the user-targeting powers of Facebook or Google to tailor commercial breaks to a user’s preferences after s/he was required to log-in with a social media profile.

Directly globally distributing a show online has another added advantage. Niche TV shows that may not perform too well domestically suddenly have a far wider reach, and could therefore stay alive and profitable much longer if they are able to be watched and paid for by viewers around the world. Direct global distribution could even include dubbing or subtitling – if it is financially viable, of course. If it isn’t, dubbing and subtitling might be the supply niche that local TV stations could use as their business angle.


Sounds easy. Why are TV Networks not directly distributing globally yet? 

The biggest hurdle for direct global distribution is the current system – as always. After years of broadcast and cable television without the internet, international TV syndication has become incredibly complex with a multitude of sub-industries and sub-businesses that are now attached to it. The local TV stations, for example, often rely on syndicated content and have barely got any productions of their own. For them, direct global distribution would be an immense shake-up if the majority of viewers would watch shows online, causing advertisers to decrease their spending on the syndicated runs. The same goes for dubbing and subtitling businesses; right now, they are paid by TV show producers and local TV stations to prepare the shows for their local broadcast, and would of course also suffer a great blow if local TV stations faced smaller audiences.

Secondly, particularly within the US TV networks probably also receive a lot of pressures from the cable companies. For over two decades, cable companies and TV networks have worked hand in hand; the networks supplied the content, and the cable companies supplied the distribution mechanism. Given the fact that most cable companies are also internet providers, it could be possible that they, threatened by the loss of cable subscribers due to direct global distribution, prevent their internet subscribers to access direct global distribution websites.

Finally, financing direct global distribution has its difficulties as well. Even though global electronic payment systems already exist, transferring money internationally remains relatively expensive. On top of that, legal frameworks might require localized “stores” or payment sites that comply with national tax laws and the like. And even if personalized advertising is great, what happens if you don’t find advertising partners for the local market of a viewer?


I am sure that in the long-run, even these systematic obstacles will be overcome in favor of direct global distribution. The initial industrial shake-up might be great, yes, but looking at the changing consumption patterns, the soaring of piracy, and modern technology, I don’t think TV producers will have any other choice than approaching their global audiences directly. As soon as one of them has dared to make the first step, all others will quickly follow.

What do you think? Do you live abroad? Or in the US – where direct distribution would likely be well-received as well?