Posts Tagged ‘risk’

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.