LIVEdigitally

Tag Archives: advertising

Viacom, the TV Industry’s Canary in a Coal Mine

Posted on by

When people ask me about the future of TV, I frequently tell them “just watch Viacom.” Their ratings have plummeted in recent years, and the recent loss of Stewart and Colbert may well be irreparable. Or is it the beginning of a brand new approach to big media? 

yutesViacom’s in a fascinating position to watch. They obviously own a lot of content, but if you look into the brands, it’s very youth-oriented. Which puts the company squarely in the targets for where the bulk of change is occurring. If “those kids today” truly prefer YouTube and Netflix to Saturday Morning Cartoons, that impacts Viacom heavily. And while I have a whole other series of thoughts regarding how younger audiences behaviors shift as they age, it’s also safe to say at this point that today’s 20-year-old will act like today’s 30-year-old in a decade. They won’t.

If “those kids today” are actually cord-nevers, that is about to impact everybody.  And “about” in TV industry terms could be a year, or maybe ten – hard to say.

The two biggest challenges networks face are changing audience behaviors and an advertising industry shift toward more data.  This combination puts Viacom in the position of having to react to the changing times in near-real-time if they want to be relevant in 10 years. And a-changing they are! Viacom is pushing ahead in so many ways, trying new technologies, looking for what’s working (and what’s not). In a way they appear to be trying to avoid the classic Innovator’s Dilemma conundrum.

They may make it, they may not. All depends on how good their ability to be a media giant and a scrappy startup at the same time. But watch them, I shall.



Facebook’s Brand Extortion Perception Problem

Posted on by

extortionI originally read Eat24’s “breaking up with Facebook” post via Zite and it echoed so true, I shared it with a lot of folks I know. I wasn’t planning to blog anything, but wrote such a long comment to Mathew Ingram’s piece, I thought, hey, why not – let’s blog this one!

I don’t think anyone’s complaining about signal-to-noise, or even paying to have reach. I’ve never heard a brand complain about running Facebook ads. I think they are complaining about the following:

Facebook users are instructed to Like brands to get updates from them. There is no mention to users as to how to control frequency of said updates, nor any disclosure about brands *having to pay* to reach them.

This is at best unfortunately disingenuous. At worst its deliberately misleading.

What makes it all much, much worse, IS the tweaking of algorithm. If you were managing a brand’s Facebook page, you’ve noticed a steady drop in every single stat/category – unless, of course, you pay. This too is not disclosed to brands. As a result, it certainly appears that Facebook initially made it free & easy for brands to get “hooked” on posting to Facebook, and then, without warning, came along and said brands would then need to pay for the same reach they previously enjoyed.

Now we can certainly remain positively-minded and call this “evolution of a model” – but it sure comes across a lot like extortion. And when Facebook replies with callous comments, it does nothing but reinforce that perception.

Personally, if I were running a brand, I’d make every effort possible to create a funnel FROM my Facebook page to *anything else*. Email newsletters, Twitter accounts, etc – all services where the expectation/understanding of how brands are positioned *to consumers* is clear. The problem I see for Facebook is I’m not the only one thinking this way – it’s an increasing sentiment and one they should stem the tide of.

I’d suggest they start by fixing 3 things:

  1. Inform Users that Liking a brand on Facebook is not the same as subscribing to a newsletter. It’s an indication of taste, and occasionally that brand may appear in a Wall feed.
  2. Guarantee Something to brands so they can make meaningful long term plans. I think a lot of brand managers would feel better about betting on Facebook if they could provide guaranteed plans of any kind – I wonder how many people have had to tell their boss that their reach dropped 90% without anyone knowing how/why.
  3. Enable Subscribing to Brands for end-users. I understand Facebook controls the overall algorithm, but how about letting a user take control of some components? This could be a paid service to the brand – whatever – but if I *want* to get every update from a Reebok, Nike, NextGuide, Eat24 – shouldn’t I be able to?

The only thing that could kill TV? TV itself.

Posted on by

It’s fun to write about the “death of TV” (or flip flop on it, whatever).  Why it’s so fun, I’m not sure, but I have a hunch it’s because…

  1. It’s a HUGE industry ($500+B/year if not more)
  2. It’s been utterly untouched by the Internet (so far – a thing that really rankles a lot of people, mostly tech bloggers)
  3. The newspaper and music industries both got trashed, so why not TV too?
  4. It’s controlled by a very small number of extremely powerful and wealthy companies
  5. The aforementioned companies have a perception of (a) greedy profiteering, (b) being dinosaurs, and (c) restricting people from doing whatever they want with content, which also tends to rankle said tech bloggers

Arguments for the death of TV are equally fun to read and fantasize about.  They tend to fall into these categories:

  • “Those Kids Today”:
    Theory – Kids today like to watch the YouTubes and the Torrents!  Kids today don’t like to pay for content. Therefore when kids get older, they will continue to watch YouTube and not pay for content.
    Reality – To debunk comically: kids today like Play-Doh, Lego’s, Justin Bieber, and eating Mac & Cheese at every meal – none of which hold true when kids become grownups (well, maybe the mac & cheese bit).  To debunk more seriously: kids have loads and loads of time on their hands and very little money, so they can spend the time and energy hunting and pecking for free content – something most adults (30+, with kids) just don’t have.  Or, it’d be like assuming that because kids like Justin Bieber when they are teenagers they will like equally crappy music in their fifties.  Well, that might just happen I guess.
  • “Cord-Cutting/Shaving/Trimming/Slicing/Thinning/Balding/Receding”:
    Theory – everybody’s quitting cable! EVERYBODY!
    Reality – I’m not even going to bother finding the links, but bottom line is this – for every article that shows XX thousand customers quit Cable, if they don’t ALSO INCLUDE the part where XX thousand customers signed up for IPTV, FIOS, Telco’s, or Satellite, you need to utterly ignore the article.  After that, there’s not much evidence left.  This may change, but that’s just a theory, and one that’s yet to be really substantiated.
  • “The Great Unbundling/A La Carte/Go Direct to Consumers”:
    Theory – In the not-too-distant future, you’ll be able to set exactly the lineup you want, and not pay for channels you don’t watch.  Or you’ll watch *everything* a la carte, paying as you go.  Or channels like HBO will start selling direct to consumers.
    Reality – This is in utter conflict with how the TV industry actually works and makes money. And since they, you know, like making money, and since shows are, you know, expensive to make, they need to keep making the money.  So if channels were to unbundle, they’d instantly get so expensive people wouldn’t be paying for them.  Here’s some of my previous thoughts on this same topic.
  • “Newspapers/Music died!”:
    Theory – Because of the deaths of other industries, TV will die too, as it’s antiquated, etc.
    Reality – This is like arguing that because the coal and steel industries in the US shrank, so will the TV industry. Other than being ad-supported, TV and Newspapers are utterly dissimilar (and BTW, the way the ads work for both are exceptionally different).  Other than being, well, media, TV and Music are utterly dissimilar.  We might as well say the Internet will die soon because it’s just like newspapers.
  • “Startups! Technology!”:
    Theory – Some startup will come along and just utterly kill TV in every way.
    Reality – Yeah, no.

OK, Jeremy, Mr Big Talk Guy, so what could actually happen?  Here’s my theory on what could “kill” the TV industry as we know it – it’s “catch up TV”. For those unfamiliar with the term, “catch up TV” (also called “binge viewing” sometimes) is when you watch a show long after it aired, by days/weeks/months/even years.  Whether it’s via Hulu, Netflix, Amazon, iTunes, Video On Demand, or any other service, it’s the rapidly increasing trend on TV consumption.  And it’s the one thing the TV industry is massively enabling, and could massively come back to haunt them.

In a nutshell, the TV ecosystem is like a big food chain, with advertising dollars acting at the bottom of it all (yes, TV ads are the kelp of the TV world).  Should advertising falter in a notable way (which, by the way, it isn’t at present), it could bring down the whole system.  There are several exceptions to the system, such as HBO, but the numbers there ($1.2B) are literally paltry when compared to TV ads ($90B).  And catch-up TV represents a problem, as it’s not monetized the same way as live TV.  See the Live TV part is where almost all of the $90B of TV ad revenue comes from – hence why ratings declines cause shows to get cancelled, as they don’t generate the cash flow to sustain themselves.

So as we all get further and further accustomed to being able to watch shows whenever we want, we (collectively) are reinforcing the habit of “why bother watch live?”  For example, my friends all tell me to watch Homeland, but I don’t really have the time for a new show right now, so I’ve bookmarked it for later (ahem, NextGuide), and will just start watching it on Netflix.  Along with Breaking Bad, Mad Men, and lots of other shows I know are great, but just haven’t watched – yet.

What, then, happens to highly anticipated shows that launch, combined with audiences who increasingly choose to wait to view them?  They get cancelled (great thoughts on this by Andrew Wallenstein here).   Sure a startup like mine can benefit from this, and even become a fabled Billion Dollar Company (FTW!), but success beyond our wildest dreams will, in no way, replace the lost revenue the entire ecosystem would suffer.  And just as environmentalists are concerned about loss at the bottom of our food chain, if the TV ad system begins to crumble, then so do budgets for new shows, etc.  It ain’t pretty.

Now I’m not predicting the above will all happen – but at the current pace of things, it wouldn’t shock me to see much of it play out.  The TV industry is giving its content away way too cheaply to all the providers to sustain itself without the advertising, and they are effectively disincenting viewers from the live experience (not that it’s not cool to get a sticker or a badge or something, but let’s face it, people are smarter than that – hence the general “meh” of most of the social TV offerings – sorry guys, but #come #on), other than for appointment TV programming.  Further, it has a certain prisoner’s dilemma aspect to it all, as no single network can make the bold move to pull recent content from the variety of catch-up/streaming services – oftentimes their own apps! From the discussions I’ve had with TV execs, there’s a lot of awareness and a growing concern, but no solutions in sight yet.   But, at least it’s the enemy we know…

A Million (free) Angry Birds Downloads Exposes Critical Android Platform Fail

Posted on by

One of the most popular iPhone games has come to Android, it’s called Angry Birds.  While I’m not personally a big fan (no offense, team Rovio, just not my kind of game), the game has well over 11 million downloads on the iPhone worldwide, and as of August had sold 6.5 million copies.  So if my simple math holds up, at 6.5 million copies at $0.99 per sale, that’s a gross of $6,435,000, and after a 30% cut to Apple, it’s a net of $4,505,500.  Today’s accomplishment of 1 million Android downloads (which truly is impressive, congrats Team Rovio!) results in a net of $0.  But they could make some money down the road if the ad revenue shows up.

I’m not saying Rovio won’t make some decent money off the ad platform, after all Google did blow out revenue last quarter, and is apparently making a cool billion dollars a year on mobile ads already.  But the reality here is this is a weak solution for any developer to bank on.  Ad revenue for a platform game is a highly unproven model so far, and while there will certainly be wins for some, the concept that ads are the only way to make money off Android apps is pathetic.

First, it clutters the experience.
There is no possibility that an ad-laden video game is better than one without ads.  None.  And in the mobile space, where screen real estate is precious, it’s even more impactful.

Second, it’s not bankable.
A video game, even a casual one, is generally a pretty engaging activity.  Imagine lining up your purple bird in the slingshot, ready to take down some well-defended pig to clear the level (finally!), and lo and behold, there’s an ad for something.  What’s it for?  Who knows, because you’re never, ever clicking on it, you’re taking down that pig.

Third, it’s a band-aid at best.
I’ve actually purchased an Android app (Robo Tower Defense – pretty fun actually), just to make sure I’ve gone through the experience.  It is unpleasant to say the least (fanboys who are reading this, please click here prior to commenting, thank you very much).  Did you know there are apps in the Android Market whose price points are listed as, wait for it, approximate amounts!?  Now there is a reason behind it – international developers – but it’s just so awkward to see.  Further, the effort it takes to even find half-decent stuff is painful.  I’ve honestly found the best way to find apps is using the barcode scanner app, and simply won’t bother with paid ones.

Fourth, and most importantly, I don’t see it radically changing, ever.
Android comes from Google, who obviously knows how to monetize spam, SEO, and domain squatters advertising, but just doesn’t get user experience at all (SIX years to let us turn off Conversation View? Really? Really?).  So their DNA, their “mode de vie,” is about enabling ads, not making amazing consumer-facing experiences.  This, coupled with the issue that Android is an “open” operating system, means no single serving method of enabling simple transaction systems.  And, because any carrier and manufacturer can bring any product to market, there’s no single source for developers to work with.

In short (too late): the Android platform cannot possibly offer a one-stop-shop approach to developers wishing to monetize application development, other than advertising.

I’ve been musing a lot on the topic of Android having a “missing link” problem recently.  This may just be a hiccup in the path to having the prime mobile operating system, or it may be a fatal flaw in its ability to have serious legs.  Either Google themselves will need to step in and create a core payment infrastructure to enable developers, carriers, and consumers to all work together – which seems radically unlikely – or we’re going to see even more fragmentation of the Android market, and probably in the short-to-medium term at that.