Tag Archives: Television

May 9, 2016 · 10:26 am

The End Is Nigh?

Walk around any big city and inevitably you’ll come across some person wearing or carrying a sign proclaiming that the end is nigh.  They’re warning about an impending apocalypse.  While they’re generally seen as a little odd (a polite way of saying nuts), I suppose at some point they’re going to be right.  Hopefully, that time isn’t close.

With that preface, and with the recognition that my timing might be off, I think we’re seeing signs that the end is nigh for the TV industry in which I grew up as a businessperson.  If you’ve been paying any attention to the media landscape over the last decade, you’ve seen some changes in what I’ll call Big TV (cable and broadcast).  To a certain extent, TV has adapted and their basic revenue model hasn’t changed a whole lot.  Sure, broadcast TV has done a good job of mirroring the cable model of dual revenue streams by gaining carriage fees, but the ad model – dollars for eyeballs – is pretty much the same as when I sold, even though the demographics are a bit more precise as the industry adopts additional data sources.

So why is the end nigh?  Let me offer a quote from YouTube’s CEO as presented at their “newfront” and quoted by Cynopsis:

 

To make her case, CEO Susan Wojcicki rattled off a startling statistic: “YouTube now reaches more 18–49-year-olds than any network ­ broadcast or cable,” she said. “In fact, we reach more 18–49-year-olds during primetime than the top 10 TV shows combined.” Her assertion is backed up by a Nielsen study of US viewers that Google commissioned. Wojcicki also confirmed news that broke earlier in the week: Between 2016 and 2017, Magna Global,Interpublic’s ad-buying unit, has committed to spending at least $250 million on YouTube instead of TV.

It’s a truism in media that dollars follow eyeballs (eventually).  Other than live sports and breaking news, those eyeballs have been departing the BigTV guys for a while, at least in the traditional form via the traditional channels (we program, you watch when we offer a show). While the digital dollars have been increasing (and will pass TV spending this year), very few marketers admit to cutting TV for digital.  Magna has because according to them, 18- to 49-year-olds watch an average 26 hours of linear TV per week, down from 32 hours in 2009.  Dollars follow eyeballs. As Adweek reported:

Magna Global’s $250 million investment in YouTube advertising will come straight from its TV budget. The $250 million investment is four to five times Magna Global’s typical YouTube budget. As a result, the firm will spend less on traditional marketing overall this year as TV ratings dip.

So you tell me – is the end really nigh for Big TV or am I just another nut carrying a sign around?

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February 16, 2016 · 11:05 am

93 Out Of 100

Every year, the folks at Nielsen put out a review of the previous year in sports media. This year’s report is out, and one statistic jumped out at me. In 2005, 14 of the top 100 programs watched live plus same day were in the sports category. Ten years later, 93 of the top 100 were sports. That’s right: despite all of the fragmentation that’s managed to kill most other forms of programming, nearly all of the most-viewed programs watched live or same day were sports. Is it any wonder that demand for sports inventory is so high when it’s the only form of programming that is both widely viewed and watched in real time?

One would think, therefore, that being a sports programming distributor would put one, as Red Barber used to say, in the catbird seat. Looking, however, at the recent negative reports on ESPN’s financial future in the above context might cause some head-scratching (disclosure – I’m a Disney stockholder as well as a former employee). The issues, I think, are several things. First, sports, like any other form of media, is fragmented. You might never miss a NASCAR race but I couldn’t pay you to watch golf. Sure, you’re a college football fan, but turn on the tube any Saturday afternoon and you can choose from dozens of games airing live. That’s fragmentation, and what’s happened is that the rights fees paid to acquire that programming by the distributors bear little resemblance to the audiences and, therefore, the advertising.

Not a problem, you say. There are affiliate fees. That’s true, and in the case of some sports rights deal, such as the NHL and NBC, the rights fee is paid on the come. After all, if NBC can raise what they get from distributors for NBCSN from 10 cents to a quarter (as an example – those aren’t real numbers), their affiliate fees more than double. Hopefully, the demand for NHL or any other brand of sports programming can make that happen.

All well and good until “skinny bundles” show up. Suddenly, people who never watch sports (yes, there are more of them than you think) have the option of reducing their cable bill by not paying $7 a month or more for sports shows they don’t watch. This is what is causing the negative predictions about ESPN. Smalle income from affiliates based on fewer subscribers to sports channels means smaller rights fees available for the leagues and other rightsholders. Smaller TV deals mean…higher ticket prices? More expensive concessions? Smaller player contracts? Labor strife?

93 out of 100 gets an A in most classes. It’s nice that sports is “bulletproof”. So was Superman, but he, and sports, have their weak spot. It will be interesting to see where this goes, don’t you think?

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January 4, 2016 · 11:23 am

Watching You Watch

Welcome back, and I hope everyone had a restful and joyous holiday season.  I spent some of it watching TV and you probably did as well.  Of course, depending on what brand of TV you have or what apps you use, other people may have been watching you watch TV.  OK, maybe not exactly watching you, but they’re well aware of what you were watching as well as who you are.  The point today isn’t to make you more paranoid than you might already be.  It’s to  make you aware of where things are and are heading and to take a step back and ask you (and myself) if this is really where we ought to be taking our business activities. 

Let’ start with the TV.  If you own a number of brands of internet-connected TV (a smart TV), the TV is logging and reporting what you watch as well as your IP address.  That information can then have demography and purchasing information integrated from third-party databases because it isn’t hard to figure out who someone is from their IP address.  Once you connect your phone to that IP address (you do so when you attach to the home wi-fi), it’s possible to connect where you are as well as all of the other information a mobile device contains.  In other words, your purchase of, say, a Vizio TV makes you an extremely visible and valuable commodity: a consumer with known habits and an addressable means through which to access them.  I’m not hypothesizing.  If you own a Vizio and haven’t opted out, you’re being tracked.

It’s not just the TV’s themselves.  There is a lawsuit going on.  It was brought by Samba TV against its rival Alphonso. The two companies provide TV analytics and second-screen targeting capabilities.  What’s interesting to me is what it reveals about their methodologies, which involve targeting users on their mobile devices with relevant content based on their TV viewing.  How would they know what you’re watching?  One uses the set top box but the other uses the mic on your phone (who doesn’t have it with them these days) to listen to the TV.  That capability is in more than 5,000 apps, including some big ones.  You give the app permission to use your mic for some purpose (maybe to record a video) but once it has that permission, it can listen.

My question is this.  Do we really think consumers are aware of this?  If they’re not, aren’t we as an industry responsible for letting them know what’s going on?  After all, the two examples above are not part of the content value exchange we discuss sometimes (you give me your attention and I give you free content).  A consumer PAID for that TV and yet the manufacturer is continuing to monetize that customer without their knowledge.  The consumer might have an awareness that a free app is monetizing them but they presume it’s through advertising.  Do you think they know the app is listening to their TV watching and passing on a record of what’s being watched to a third party?

Here is the first of my 2016 predictions: this stuff will stop or some laws will be passed to make it stop.  Transparency of data gathering and usage will expand a lot as consumer backlash heats up.  What do you think?

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