• by Barry Lowenthal , Op-Ed Contributor, May 7, 2014

I attended quite a few NewFronts this past week, and I was very impressed by the sheer spectacle of the presentations. They were grand, well orchestrated and star-studded. It's pretty clear that every media company I witnessed was declaring to the advertising community, the clients and the world that they are capable of creating the same quality content that we're going to see presented by the cable and broadcast networks in a few weeks.  I don't doubt this, especially given the amount of excellent talent that's involved in a lot of these projects.

Lots of hours of video were presented -- and according to the presenters, we're all going to be highly motivated and easily persuaded to watch hours and hours of terrific, awe-inspiring new video content. And that's where it all starts to fall apart for me.

According to the media research, video consumption is up and time spent with digital media is up. I know that some of the media companies have double-digit increases versus a year ago (of course it's easy to have double-digit increases off small bases), but does anyone you know have enough time to watch all of this new content? I don't.

The industry widely believes that video is the future. I know I do. Consumers just like watching video and they like sharing video. But there are a few very big problems betting the ship on video. 

It's going to be really hard to monetize all of this content. It's not cheap to create great video. Just examine the cost of "House of Cards," and it's going to be very hard to get enough advertising dollars to pay for all this video, even the ones that don't have million-dollar budgets for each episode (which is the majority). The video presented over the last week is not funded through subscription models like Netflix and HBO. All of it is funded through advertising, and the shift from TV to video budgets will have to move a lot faster to pay for this content.

In order to monetize the costs, the media companies are going to have to leverage their existing audiences to drive video viewers. Most media companies don't have a big enough audience and most users don't currently go to them for video. Do I want to watch The New York Times or Vogue? Of course, there are parts of both of those great titles that I do want to watch (like the Paris fashion shows in Vogue's case). But is it enough to justify all of the video creation expenses?

While some of the media companies are going to be able cross-sell users, discovery is still going to be very difficult and expensive. HBO spends hundreds of millions of dollars advertising its blockbuster shows. Can Hearst, Time Inc, PBS, The New York Times, WSJ, AOl, and Yahoo consistently spend that kind of money to promote their shows even if they use all their own media properties for tune-in? Given some of the balance sheets of those companies, I doubt it. But if they do, it's HBO's (etc.) media agency that will probably benefit the most.

The companies I saw presented during the NewFronts are trying to change their business model from mostly text to mostly video. It's an impressive endeavor, and given consumer behavior patterns, a necessary ambition. While many of us want to consume content in text forms because it's quicker and easier, video remains the most persuasive communication device and the format that attracts the highest CPMs. 

As a result, every media company is going to have to figure out a video strategy, just like they have to figure out a mobile strategy. But the ones that figure it out first will win, because there just isn’t enough time in a day to watch all this new content.