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.

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