Brought To You By The Letters A Through Z, But Mostly H, B & O

Looking back on some of the big media stories of the past week, two of them are so surprising that if they had broken anywhere near April 1st, no one would have taken them seriously. They also had something else in common -- the alphabet. Of the two -- Google’s restructuring and rebranding of its corporate holdings under “Alphabet,” and “Sesame Street’s” leap from PBS to HBO, the latter is the most shocking to me personally. Why? Because “Sesame Street” was always a free, non-ad-supported television franchise that was underwritten primarily by the alphabet (albeit, with help from some corporate benefactors).

That “Sesame Street” would jump from the extreme other end of the media underwriting spectrum (you know, brought to you by, well, yourself), signals just how weird the world of media economics has grown, and how disruptive and adaptive media business models have to be in that environment.



In a way, the restructuring of Google’s corporate holdings reflects that too, because the media world has grown far too intricate and complex to draw the simplistic economic lines it originally evolved in.

The point of this commentary is that the economic lines are blurring within media, and it’s not so easy to bucket things in one-dimensional ways, like “Google is a search engine company,” or “‘Sesame Street’ is a public television show.”

Actually, the new “Sesame Street” line is even blurrier, because its new deal with a pay TV service now makes the show available free of charge to public television stations that previously had to pay producer Sesame Workshop a licensing fee to broadcast it free of charge to American TV viewers. In other words, “Sesame Street” is now brought to you primarily by three letters in the alphabet: H, B and O.

As I write this I’m simultaneously watching another blurry line of media content, sponsorship and distribution: The PGA Championship golf tournament. I’m in a location without access to the official TV rights-holder, Turner Broadcasting’s TNT network, so I’m streaming it via What surprises me about this live streaming access is that in the past when I’ve streamed a live sporting event over-the-top, I would have to authenticate my access through my regular cable or satellite TV carrier. Not this time. My access was granted to me directly by the PGA in exchange for two bits of information: my email address and my ZIP code.

In other words, the PGA is now asserting its dominance over its TV rights-holders in terms of streaming access to one of its most prized events, and it is reaping advertising revenues directly from that.

The streaming is being sponsored by Mercedes-Benz. It also carries a rotation of some non-entitlement advertisers, including one equally ironic spot from GEICO featuring a family sitting around their dining table. The spot seems to open midway through a vignette when the off-screen announcer intones: “You can’t skip this GEICO ad, because it’s already over,” and then proceeds to play for the full duration. The spot works for several reasons, the most important of which, of course, is its humor -- poking fun of user-control, or lack thereof, of media content. The reality is that viewers might be able to skip through it on their TV sets, but that’s actually not the case on the, where the streaming version is simply unskippable.

The placement of the GEICO spot in the PGA’s live streaming of the PGA Championship demonstrates the Internet’s new supremacy as the “take-it-or-leave-it” medium in media’s economic food chain. Because live sporting events are inherently non-skippable and something that for many fans need to be experienced in real-time, they are seen as some of the most valuable future assets for the TV industry -- something that is bulletproof and cannot be skipped, bypassed or otherwise disrupted. Unless, of course, the league or sports franchise is the one doing the disrupting, cutting its own deals with sponsors and viewers alike. So the GEICO spot placed within that context is an ironic allusion to the fact that you couldn’t skip it even if it wasn’t already over, because, well you just can’t skip it.

These three stories combined -- The PGA’s sublime direct-to-consumer model, “Sesame Street’s” shift to a hybrid paid/public TV distribution model, and, in a symbolic, way, Google’s restructuring as Alphabet -- demonstrate how different, how evolving, and how blurry the economics of media are.

The only universal truth for me is one that consultant and publisher Shelly Palmer once intoned at a MediaPost event nearly a decade ago: “There are only three ways to pay for media,” Palmer told the audience while emceeing the event, “I pay, you pay, or someone else pays.” The three stories above demonstrate all three.

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