Post #25 – J.K. Rowling’s new book points to the real Chamber of Secrets

In case you missed it, J.K. Rowling, the author of the Harry Potter series of books, wrote a mystery novel under the pseudonym Robert Galbraith. She was inadvertently outed by someone in her lawyer’s office.

Much has been written about the fact that the book, although very well written and reviewed, hadn’t sold much at all prior to the revelation. Then it took off. The stories about this “irony” struggled to find a point other than that not all good novels are discovered.

Really. How profound.

What this publishing parable actually points up is that the existing, antiquated system of finding new creative content sucks and hasn’t gotten much better, despite Amazon’s best attempts. I find their recommendations tedious and predictable, but not necessarily predictive. It’s not really their fault and I love Amazon.

The problem is that the system, if you can call it that, for finding new content of any sort, be it books, music or scripted entertainment, has never been good and hasn’t been greatly improved in the information age. It’s a critical failing.

If we really want more and better content, we need a more and better way to find it. Pandora is a step in the right direction. Their music genome legitimately plays music you’ll like but didn’t know, based on the songs you tell it you do like. It’s a great way to discover new artists, a role that radio gave up years ago in an era of tight, repetitive playlists.

I’m also encouraged by the recommendations of booklamp.org, which has a DNA-Pandora style approach to books. It’s still limited (and it’s a non-profit) but the results I’ve gotten from it are promising.

While many people lament the decline and fall of bookstores, I think, like much of the existing media, that they dug their own graves. Bookstores are no longer staffed by knowledgeable people who can consult with a customer about what they may like. And they have not availed themselves of in-store technology to help you find new authors.

The challenge of helping consumers find new content is an important factor in reinventing the media.

Post #24 – To bundle or not to bundle, that is the question.

Unbundling is the elephant in the cable MSO room. The recent report by Needham & Company’s Laura Martin that predicted cable networks would lose half their revenue if they were unbundled, makes this a tricky question.
Unbundling, or a la carte choice, refers to the movement by some consumer advocates and legislators, most particularly Senator John McCain, to force cable MSOs to let consumers choose which ad-supported networks they want. Almost all cable networks get a piece of the consumer’s monthly spend, from a few cents per subscriber up to a few dollars a month for ESPN.
So customers are paying for networks even if they don’t watch them, with no ability to opt out. That money, which is generally about half of a network’s revenue, is obviously a big deal. Cable networks and Internet sites are similar – most of them can’t make it without a dual revenue stream, advertising and pay. Unfortunately for the Internet, they don’t get subsidies from anyone.
But cable, particularly in the early days, needed to boost consumer demand by offering programming like CNN that they couldn’t get on broadcast TV. So the habit of paying a per subscriber fee to the networks started.
Having worked for a company that at one point was the largest MSO in the 80’s, I can tell you that one consumer complaint about cable has stayed constant for decades: too many channels. Yes, the wonderful 500 channel (or 1,000 now) bonanza has always been seen by many subscribers as a rip off. When they see channels on their box whether it’s 5 or 50, that they don’t want or watch, they assume that they’re paying for them – and they really are.
On the other hand, this is a delicate question for Reinventing Media, whose goal is more quality programming and fewer commercials in ad supported content. Without these subsidies, cable networks would undoubtedly have to cut back and some would go out of business. That same report predicts we would have about 20 ad supprted channels left.
Just when some of the networks are weaning themselves from off-network reruns with shows like Mad Men and Sharknado (joke), their foray into original programming may be cut brutally short on networks like AMC, TNT and yes, Syfy. We may never get to see Sharknado II where the sharks eat New York! Actually, that should be Sharkicane.
But seriously, ceasing this form of subsidy could be very bad for the overall quality of TV and its commercial load. After all, everybody in Britain has to pay a tax to the BBC if they own a TV set. Why not here?
But of course a compelling case can also be made that consumers shouldn’t be forced to pay for something they don’t want by these near-monopoly MSOs. It will be more than interesting to see how this particular made-for-tv drama plays out.

Post #23 – It’s official, Hulu is off the block. Now what?

It should come as no surprise, and a great relief, to faithful readers of Reinventing Media that Hulu has been taken off the market by its owners, Disney and Fox (NBC/Universal is a passive partner). You can read the story here.

Now it’s time for the networks to move ahead to use Hulu to help move TV in the right direction. First of all, Hulu’s commercial policy (usually not more than two at a time with a countdown clock) should be a model for ad-supported TV. Of course, this will require increasing the value of commercial slots by providing better targeting information. Ultimately this has to involve the cable MSOs (like Hulu’s part owner NBC) but Hulu could lead the way. And didn’t Time-Warner Cable express an interest in being a part-owner? They should be, and so should CBS.

Commercial inventory in network shows on Hulu should be sold right alongside ad sales of the shows on broadcast by the individual network sales teams. Note, that doesn’t mean “given away as bonus inventory”. The impressions on Hulu are arguably more valuable than those on regular TV because it can prevent commercial skipping and provide somewhat better targeting. Buttressing Hulu’s ad sales as part of regular network buys will help ease media buyers into accepting all inventory, including on-line, time-shifted and dynamically served slots, as part of the normal buying landscape. This will in turn increase the economic value of TV programming, which presumably will lead to more and better shows. That’s my theory, anyway.

An important part of the equation, as a Comcast exec recently pointed out in a Videonuze panel, is to develop a buyer/seller ad system that can support this complexity. Luckily enough, this comes just as two important ad technology companies have merged and announced their intention to create just such a system. Longtime agency suppliers Donovan Data Systems and Mediabank have merged to create Mediaocean, which says it aims to create a modern system for the new digital world. Given their long standing ad agency relationships, they are well-positioned to do this – if they invest the money.

But Hulu should be right there helping them do it.

Post #20 – The TV business is moving way too slowly to on-demand.

TV is making some progress, but it’s a lot slower than it ought to be. I’d like to recommend a video of a panel discussion from the recent Videonuze Ad Summit orchestrated by Will Richmond. His newsletter is a great way to keep up with online video by the way.

The panelists are from Comcast, BlackArrow (advertising technology for the MSOs) and OMD (Optimum Media Direction, the largest worldwide ad agency buying network). The moderator is Ashley Swartz from Furious Minds (“a collective of cross trained, ad tech natives that helps companies deliver revenue and accelerate growth by aligning and defining monetization strategies with innovations mandates. We provide fluid, on-demand talent solutions across the marketing, revenue and business planning functions.” If anyone can figure out what they actually do from this description on their web site, let me know.)

It’s an interesting panel and Swartz does a good job keeping it moving. She had the best quote: “has anyone ever seen TV move fast?”. Point taken. But it’s frustrating to see the ad industry and the largest cable MSO (multiple system operator) moving at such a glacial pace toward total on-demand television and addressable ad delivery.

As Himesh Bhise, the impressive VP of New Video Services at Comcast pointed out, now that they have dynamic ad serving into on-demand streams, the next step is planning and buying tools for the agencies. That’s going to be ten miles of bad road. We knew this would be necessary a long time ago.

The reason for my frustration is that the current ad-supported TV system is repeatedly shooting itself in the foot. Actually both feet. There are too many commercials for a quality viewing experience. They are pushing the world toward HBO, Showtime, Netflix, iTunes and Amazon video, to name a few.

That’s not necessarily a bad thing – unless you can’t afford those services. Even though 90% of the viewers get their TV from cable, which they pay for, a lot of them can’t spend the extra money for the pay-TV services.

The tragedy is that everyone wins in a completely on-demand, addressable system of TV delivery, where every viewer sees his or her own stream with targeted or even personalized commercials. These ads would be more valuable and therefore there could be far fewer of them. The viewer wins. The advertiser wins by eliminating waste and annoyance. The programmers & platforms win by getting more revenue per commercial slot.

The current system is reminiscent of how AM music radio lost out to FM by doggedly sticking to their 18 minutes of commercials while FM carried half that number. It wasn’t really the quality of the signal, it was the commercial load that sank music on AM. The TV business is doing the same thing to quality dramatic ad-supported programming.