Will SVOD make programming networks like HGTV, NBC and AMC obsolete?

Daniel Frankel, FierceCable

As I sat in on a panel discussion at the TV of Tomorrow conference in San Francisco last week, a Verizon FiOS (NYSE: VZ) press release popped into my mailbox. The wireless company had signed a deal with prolific cable TV programmer Scripps Networks Interactive to license 45 non-scripted, lifestyle-oriented shows for Verizon's upcoming mobile video service.

As I listened to the panelist discuss the importance of the network brand, it hit me--the actual programming networks these shows originated from was sort of an afterthought. Six, eight, 12 months down the road, when Verizon finally launches the service, and consumers are watching Househunters on their phones, will they know that's an HGTV series? Will they know Bizarre Foods came from the Travel Channel? Will they care that Cutthroat Kitchen is a Food Network series?

"The network associated with the show is still important," said panelist Jennifer Mirgorod, executive VP of brand distribution for Turner Broadcasting System, at the TV of Tomorrow conference. "It lets the viewer know what the show is about."

A day earlier, on the same stage, Hardy Tankersley, senior VP of innovation at Fox Broadcasting, noted: "The whole point of having a network is to get people to watch another show, otherwise you can't make any money."

Tankersley calls it "network flow," but I've also heard it referred to as the "network effect." It's how programmers monetize their expensive hits. After all, what incentive does ESPN have for paying the NFL $1.9 billion a season for TV rights if it can't ubiquitously brand its coverage and drive viewership to other programming?

If not for all the heat it drew to its core brand, could AMC Networks justify paying Mad Men's creator $30 million for a period drama that, even for its hugely ballyhooed finale, only drew 3.3 million viewers?

The question is, in a distribution world increasingly influenced by SVOD platforms like Netflix (NASDAQ: NFLX), Hulu and Amazon Prime Instant Video, and with cable companies like Charter Communications (NASDAQ: CHTR) and Comcast (NASDAQ: CMCSA) designing cloud-based user interfaces that surface content in thumbnail-oriented, Netflix-like ways, how do you sustain network flow?

Logging onto Netflix as I write this, I'm greeted with an overture to continue watching the NBC comedic-drama Parenthood (my wife must have started it and stopped it). It's mixed in with thumbnails for MASH and Friends re-runs, and feature films like The Sandlot 2. Nowhere in the interface does it say that this is an NBC network show, produced by NBCUniversal--not even in the "details" menu."

Call it just another disrupted component--a major one--of linear TV viewing. For decades, the proliferation of thriving network brand experiences helped grow pay-TV viewership, advertising dollars and subscriber bases. 

It's one more lament for programmers, who have seen aggressive sales of their content to SVOD platforms come back to bite them in the form of dramatically reduced ratings for repeat programming on linear networks. 

I keep coming back to this quote from Scripps Networks Interactive chief revenue officer Steve Gigliotti: Last year, he told the Wall Street Journal that selling repeats to Netflix "sounded like a good idea at the time. But now there are some misgivings about it." --Daniel