Post #4 – TV Advertising, continued

Following up on my previous post, the concept of cable MSOs as the “Double Click” of television deserves a more in depth explanation.

A growing number of TV programs are consumed as one-to-one streams. All Internet video viewing such as YouTube, Netflix and Hulu are individual streams. On demand television viewing and DVR playback are programs streamed to one device. All of these streams are being played back from a hard drive somewhere.

It’s very easy to pause these streams – you can do it with your remote control or a key on your computer. The originator of the streams can pause them as well – in order to insert a commercial for example.

So what’s the point of all this interrupting and inserting? Extreme target-ability. Cable companies know the address where every stream ends up. Other databases know who lives in the house. If you really want it to get scary, consider that the Xbox Kinnect system, or something like it, can probably figure out which family member is watching.

But we don’t need to go to 1984 to get a system that would massively improve the targeting of television while protecting privacy. And there are lots of compelling ways such a system could incentivize viewers to voluntarily share information, much the way Web sites do.

The value of an individual commercial slot would grow enormously. Now, instead of a place to put one commercial, it would be a place where dozens of ads could run in different households and geographies. It’s an answer to how to reduce the number of commercials necessary to support quality programming.

The difference between Internet delivered television and cable delivered programming would be erased – essentially the same system could serve both. Live programming, like sports, could be delivered as a targeted stream just like any other content.

In fact, I expect that the percentage of programming viewed as a stream will steadily increase until it eclipses appointment TV. Then cable companies will be retiring cable networks, further expanding the bandwidth available for streaming.

Post #3 – TV Advertising

TV advertising is an industry that needed reinventing even before the Internet came along. To be more precise, media buying is the part of the advertising industry that desperately requires a makeover.

For the most part, media is a blunt instrument as a way to advertise. Buyers are offered baskets of viewers based on survey estimates that give them demographics and geography and not much else. Plus the commercials, especially in spot TV, often don’t run where they were originally promised.

One TV rep firm president once told me “our job is to sell television vaguely” and that his business was “creating discrepancies and cleaning them up”. Discrepancies are ads that didn’t run as scheduled and need to be rescheduled.It’s as if you were booking a trip and found out that instead of going from New York to LA, you went to Chicago twice. And you didn’t find out until after the trip was over.

This is the Six Million Dollar Man – we have the technology – we could fix him. But will we? Most TV viewing is done through cable boxes that at least know where they live. More importantly, TV is steadily shifting over to be an on-demand medium, either through actual on-demand streaming or via a DVR.

If the cable companies agreed to take on the role of Double Click for television, helping their content partners insert commercials in real time based on real criteria, the process of TV buying could become far more efficient and generate more money for the media with fewer commercials. Commercial clutter is choking free TV.

Will this ever happen? Hard to say, but NBC being bought by Comcast could be a step in the right direction.