[opendtv] Re: Broadcasters Warn of Apocalypse in Dish's Ad-Skipping Service
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 30 May 2012 11:13:03 -0400
At 7:38 PM -0500 5/29/12, Manfredi, Albert E wrote:
Wait, Craig. If they lose the ads, they're down to just one revenue
stream. The whole point of their bitching was that they were seeing
the dual revenue stream go away, right? If people can store an
entire week's worth of TV programming, then block all ads, how long
would it take for advertisers to wake up?
I should have said "they no longer need to depend ONLY on ads to pay
for content. Obviously it goes beyond this. They also depend on the
revenues from secondary markets for this content; in fact this is
becoming a much larger factor moving forward.
more on this in a moment...
Advertisers ARE waking up, as is evidenced by the movement of ad
dollars to more targeted cable and Internet advertising. But the
broadcast networks (via the MVPDs) are the only game in town if you
want to reach very large audiences (multiple millions of viewers).
Some of the cable networks are getting there with audiences that are
consistently above 1 - 2 million viewers, but advertisers still pay a
premium to the networks for the really big shows, AND live sporting
events. Sports may not deliver huge numbers for individual events,
but as a category, the numbers are still very high and the
demographics they deliver are highly coveted.
We have become somewhat complacent about watching first run dramas
and sitcoms - there are many ways to catch up now. Live sports has
little value after the event, but it keeps people watching. Unless
you are disciplined enough to start the PVR and delay watching the
event for 15-30 minutes, you can't avoid the commercials.
So the networks are in the envious position of still having enough
live content to keep the advertisers happy, even as they keep pushing
up the cost per thousand for all of their content. The congloms know
that this cannot last forever, but with the second revenue stream it
emboldens them to keep charging a premium until the bottom falls out.
1. Reduce the number of ads significantly
Agree! Fox tried that, initially, during "Fringe." They should have
kept it up.
2. Embrace new technologies that allow for the targeting of ads to
consumers - something that is now commonplace with web advertising.
They do this with online content, but more than a few times it gets
all screwed up. Sometimes the ads are all black. Sometimes the
stream freezes entirely, and you have to go back to the beginning.
And most of the time, the few online ads are repeated over and over
and over again.
The best examples of targeted ads are for ordinary web searches. Here
Google and others have developed the technology to track your
behavior and insert ads that are appropriate. We just bought a car
for my wife and spent several months looking at several brands and
models. I was amazed at how many targeted ads I started to see for
these products.
Cable also has the ability to deliver highly targeted ads, but they
have been slow to deploy these technologies. Where cable does well is
as a complement to the broadcast ad budgets which tend to be generic
and less targeted. Cable delivers much more targeted demographics,
often with contextual advertising linked to the programming (e.g.
Home Depot and Lowes are major advertisers on HGTV). And cable
provides increased frequency at much lower costs per thousand than
the broadcast networks.
You can bet that whatever Apple and Google are up to in the TV space,
delivering highly targeted ads to their viewers is at the top of
their list.
3. Allow MVPDs to offer rebroadcasts of their programs WITHOUT ADS for
a nominal fee - no more than 25 cents.
Instead, they continue to demand the extra fee AND the ads. Fox
allows MVPD subscribers to view the online content quickly, same day
or next day, WITH the ads. And the rest of us get to wait 8 days,
and watch online also WITH the ads. So as usual, they prefer ads no
matter what.
And the music industry preferred selling albums with one or two good
songs and a bunch of crap. As the recently honored Bob Dylan wrote
nearly fifty years ago:
The Times they are a changin...
Regards
Craig
And one more thing...
Broadcasters may have a new role to play in content development.
Many shows developed for the networks fail to attract sufficiently
large audiences to survive - but many of these shows ARE surviving as
Netflix, and various cable networks step in to keep the story lines
going on a reduced budget.
Canceled TV Shows Get a Digital Afterlife
http://www.businessweek.com/articles/2012-05-24/canceled-tv-shows-get-a-digital-afterlife
The major issue with developing content is how to get enough people
to watch to create a buzz that can then become "viral" as a form of
promotion. We see this increasingly with You Tube videos that go
viral. Perhaps the networks will become the front end of a new world
of content, exposing larger audiences to new shows, which can then
carry on via Internet distribution...
Then again, with the money Apple has in the bank, they could provide
the seed capital - and the stage - to help independent producers
reach the masses...
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