Video Vertigo: Dazed But Not Confused
My new quarterly column will evaluate the short-term reactions and long-term realities resulting from the velocity of change in the media marketplace. I may occasionally be off base, in which case I'd love to hear from you. And if you agree with my views, drop me a line. My goal is to break issues down, highlight the trends and opportunities, and help you navigate the obstacles.
Over the past few months, the media business has been awash in press releases trumpeting on-demand digital content networks. For those who either haven't followed it or missed the news completely, let me recap three of the more talked-about announcements.
Last October, ABC, in conjunction with Apple, announced plans to offer five prime-time programs for download the day after they air for $1.99 apiece, without integrated advertising. Then, in November, CBS announced plans to offer four top-rated prime-time shows with originally integrated ads intact for 99 cents per show in selected markets. Not long after, NBC said it would offer a variety of universal/Universal TV shows in DirecTV households equipped with new interactive digital video recorders for 99 cents apiece. The universal/Universal plan doesn't include the integration of original advertising. Other related announcements: MTV's broadband extension of Comedy Central, and Yahoo!, AOL, and MSN's ongoing efforts to build viable video businesses.
There is no doubt where we are headed. Within a decade, and possibly much sooner, such concepts as networks, program schedules, and "windowed releases" will be things of the past. Consumers will have access to whatever content they want, via any device, through a variety of economic models: ad-supported, subscription, or hybrid. Programmers will benefit by being unshackled from legacy distribution models. Distributors will segue from commodity-driven utilities to intelligent aggregators and personalization engines for consumers, and advertisers will benefit from a more efficient, targetable, and dynamic marketplace.
But until the market matures, we'll have to deal with uncertainty around these evolving models. Our industry has a choice: to manage change proactively in a way that ensures competitive innovation, or allow it to occur unchecked and without guidance. The latter could slow the pace of scaled change for advertisers, which ultimately isn't a good thing for content owners and distributors.
We no longer live in a centralized media economy. Once there were three networks and limited consumer choice; economic models fell into place fairly easily. While consumers might not have been completely satisfied, they weren't confused.
Today, consumers are increasingly in control. They have many choices for video distribution -- cable, satellite, telecom providers, and the wide open Web. There is also a growing cadre of programmers, all of which are experimenting with multiple economic models.
Having a lot of choice is great, but it would be nice if there were a collaborative announcement regarding on-demand content driven by any combination of key trade organizations, including the National Association of Broadcasters, the Cable Advertising Bureau, American Association of Advertising Agencies, and the Association of National Advertisers, as well as programmers, distribution outlets, and advertisers. Consistency regarding content availability, price, and ad integration could be managed, at least to some degree.
I found it interesting when last fall the six broadcast networks jointly released the findings of their DVR study proclaiming that DVR usage would be a boon to advertisers. Why the singular focus here, and not with on-demand programming?
It's simple: One is seen as a threat, the other an opportunity. It would be so much better for our business if there were more frank discussion and coordinated action when it comes to on-demand video content. I can only hope that as on-demand, à la carte interactive video, addressable advertising systems, and other emerging platforms go to market, our industry will develop a more sophisticated way to manage their introduction.
Adam Gerber recently joined Brightcove, an Internet TV service, as vice president, ad product and strategy, after nearly 15 years at media agencies, most recently focused on emerging platforms. (email@example.com)