All posts by David Graves

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.

Post #19 – Reinventing movies – the theaters need to step up to the $50 ticket, among other things.

Motion pictures are at the top of the food chain. They cost more, attract the biggest stars, have the broadest global market – and are about the riskiest investment in entertainment media you can make.

So it’s important to our entertainment ecology that movies get reinvented in a way that produces more good movies, at all levels of cost. It’s unfortunate that the major movie theater chains have become a roadblock in this process.

While the theaters have a perfect right to protect their businesses, they have not held up their end of the bargain in terms of innovation. By and large the movie-going experience is the same today as it was 50 years ago. Not enough parking. Fighting for seating at popular movies. Waiting forever for popcorn and overpriced soda.

While 3D and video projection has been creeping into theaters, those are largely studio driven innovations. However, recently Paramount worked with a few test theaters to offer a $50 ticket to see Brad Pitt’s World War Z two days early. In addition to the early screening, the fans got to bring some friends at regular prices and will get a Blue Ray DVD of the movie when it comes out. This is a step in the right direction.

Every other entertainment ticket guarantees you fixed seating, at differential prices. If the movies really are a social entertainment event, why not allow everyone to sit together where they want, as long as they’re wiling to pay for better seats? Works in sports and Broadway.

Why not have valet parking? How about streamlining the concession process, as one theater I went to in Evanston, Illinois did quite successfully?

The fact is, movie theaters are costing the studios millions in extra expenses and lost income. How? By delaying the release of movies into the wired world for 90 days, they greatly increase the cost of advertising those movies, which needs to be done twice at least. And undoubtedly many people who would pay premium prices to get movies at home while they’re still in the theaters, never get around to it later. The delayed post-theater release also encourages piracy.

It’s inevitable that the studios will chip away at the theaters’ window of exclusivity. The only question is, will the theaters step up and improve the experience and economics of going to the movies enough to offset any real or imagined losses to day-and-date online distribution?

Post #18 – Pandora buys a radio station. Now the fun begins.

Pandora has announced it’s buying KXMZ-FM in Rapid City, South Dakota. Their reasons are primarily to do with music licensing as explained by Pandora General Counsel Christopher Harrison (link to story). But the end of the article is the part that’s most interesting to me: “Pandora excels in personalizing discovery and terrestrial radio is experienced in integrating with a local community. We look forward to broadcasting our personalized experience to the community in Rapid City, an area where over 42,000 residents already use Pandora.”

As I mentioned in a previous post, I think the integration of Pandora (and maybe the coming Apple Radio or Spotify), with local radio personalities, news and information is the future of radio. Added to that will be smartphone, mapping and in-car integration to give listeners a complete experience that’s geo-aware and inherently social.

Sound like a lot? It’s all well within the reach of current technology and programming. Here in Boston, it could offer Matty in the Morning on KIIS-FM with whatever music you like and commercials targeted for the individual listener. Information like weather and news would be on-demand and traffic could be geo-aware so you’re only alerted to situations that relate to where you are driving.

It does require listening over an Internet stream, but that obviously hasn’t been an impediment to Pandora’s 70 million users. Car makers are falling over themselves to put wifi cellular Internet into their newest models. Mobile carriers are equally excited by an extra cell device in every car. You can see the benefits of connecting mobile users if you drive with Waze (which might get bought by Google if Apple or Yahoo! don’t wake up).

Waze tracks the speed and location of its users to produce increasingly accurate traffic condition reports. It also allows them to input things like accidents, construction and speed traps, which instantly show up on everyone else’s maps.

Connecting cars like this will raise the hackles of privacy advocates, but the flip side is the possibility of tremendous benefits in traffic management. How many times have you sat at a traffic light that wasn’t smart enough to know the no cars were coming the other way? Collectively, millions of times a day.

Pandora is also important because it does a really good job of exposing listeners to new artists and music, based on their existing favorites. This is not something radio does a good job at and hasn’t for decades.

All in all, the reinvention of radio will be good for everybody except those stations which don’t do it.

Post #17 – If you think on-screen promos are the work of the devil, raise your hand.

Ad-supported TV has a death wish. It wasn’t enough to overload programming with an unwatchable number of commercials. Now they are ruining good dramatic programs and movies with pop up animated graphics promoting other shows.

What moron decided that this was acceptable? What other morons decided the first moron was right? There seems to be nothing stupid that these people won’t do to convince us that the only TV worth watching is on HBO, Showtime, Starz and the other pay channels. Oh, and maybe PBS.

Now that consumers are skipping commercials, as well as promos, with their DVRs – and for good reason – programmers are desperate to put largely irrelevant promos right over dramatic programming. No thought is even given to where in the program it appears, not that there really is anywhere it should be.

Would they allow this in France? Where is the collective outrage from the creative community? Does J.J. Abrams like the fact that NBC is ruining Revolution with constant on-screen crap?

Viewers obviously have very little say in this or any other matters. They just keep voting with their channel changers, with more abandoning network TV every year. Three years ago AdAge quoted Adam Stotsky, president-marketing, NBC Entertainment as saying that consumers have developed a “capacity to accept multiple messaging all at once”. What a joke.

It’s one thing to scroll repetitive and often stupid news headlines across the bottom of a news program. It’s quite another to have sitcom characters marching along the bottom of a poignant dramatic scene.

It’s truly amazing to see a medium driving a nail into its own coffin.