Posts Tagged ‘nbc’

Discovery questions online economics

Monday, 1 December 2008

Discovery doesn’t see online as a viable option.  They aren’t the first, NBC’s Zucker is famous for his “digital pennies” quote.

The thing is, these guys are spot on.

They are not going to be fired for not giving up all their content online because online isn’t a viable environment in which to see the ROI needed.  You simply can’t guarantee a hit on TV, let alone Online.  There’s way too much competition to drive mass market audiences.  You can’t spend enough money marketing your shows to drive demand.

So what is a online content creator to do?  Well I would work through answering questions in the following steps;

1. To understand where we are today, ask who is viewing my content today?  What else do they like?  Not just my stuff but other peoples?  Where are they viewing it?  How are they sharing it?  What are they saying about it?

2. On deciding what content to create, ask what are people interested in?  What are they searching for?  What areas are growing and why?  What are the memes?  Instead of defining what I think people want (e.g., story about a spy with a split personality disorder) and marketing it to death, how do I plug into people and gain some real insight?

3. On creating the content, how do I involve potential viewers and fans of previous shows?  How do they inform the stories?  How do I keep them warm as I produce the content?

4. Once I create something people want, how do I drive demand?  Where do I make the video available?  How do I make it available?  How do people interact with it?  How do I promote it?  How do I drive revenue from viewership?  What do I let viewers do with it?  How do I let them create complimentary content related to it?

5. Once people are viewing my content, how do I interact with them?  How do I keep track of the communities that form around the content?  How do I grasp who is saying what and why is it important?  How do I track how many views I have?  How do I feed this real time information back into Step 4 to continue to drive demand for the content?

6. Go to step 1 and do it again.

These questions are really no different from the ones that are asked today, except you need to ask the questions with a fresh mind.  You can’t generate audience by spending more and more on advertising to promote your shows.  So ask these questions assuming you have $0 to spend on advertising your new web show.

I don’t know how much runway the major studios have if they don’t really have a plan for internet video, comedy on network TV is already irrelevant as kids look to YouTube instead.

Upfront commitment provides zero risk

Tuesday, 2 September 2008

Cameron Death, talking of brand advertising [product placement and pre-roll] says “We won’t greenlight until we have brands lined up who want to be in the show”.

Looking at comments on NBC’s Gemini Division, regardless if you think the “brand integration was seamless” and “not ham handed and inoffensive“, this economic approach does not scale and create a sustainable market.

Removing upfront risk does a number of things;

1) Stifles creativity.  The ad deal process is labourious, and doesn’t scale efficiently.  If traditional TV or even banner advertising on the web worked this way, we would see a fraction of the shows (sites) we see today.

2) Puts the control firmly in the hands of the advertisers.  The studios are simply passing the investment risk onto the advertisers.  If the show doesn’t do well, how are the producers going to replace the brand advertisers?  They can’t, and after feeling burned, the advertisers will be even harder to sell to next time.

3) Limits revenue innovation.  Product placement and pre-roll advertising is exactly the same as traditional TV.  Seriously, we are 10+ years after the first online TV show, and this is the best they can do with the most interactive platform in existence to date, the Internet.

I don’t have the answers, but replicating TV on the web is not viable in the long term.  With an abundance of choice (prosumer content, indies, micro-studios, bittorrent), TV producers will have trouble driving demand for shows.  Just look at what is happening with music.

If the TV industry doesn’t start being serious about revenue innovation, the internet wont be anything more than a very risky disribution pipe.


Update: A fantastic summary of the nuisance costs imposed on viewers through the advertising.  Also a great comment on the summary, “the whole series nonetheless feels like a giant marketing campaign for Intel.”

Revolution for online TV?  i don’t think so.