Product Integration Is Increasingly Acceptable Everywhere on TV

They may be purists, but they'll get over it if they need to.

- Ilene Chaiken, creator of The L Word series on Showtime

In Claude Brodesser-Akner, "On Ad-Less L Word, Brands Become Part of Plot," Advertising Age, August 7, 2008

Chaiken is referring to the concern writers might have about writing marketing messages into episodes of The L Word episodes. The L Word is much-discussed series about lesbians on Showtime, a subscription network with no commercials. Ratings suggest that the program attracts a bit over 300,00 prime time viewers aged 18-49 each week. Research further suggests that these viewers are mostly upscale females--the kinds of consumers advertisers covet. With production costs rising, Showtime agreed with Chaiken about the acceptable of inviting marketers to pay to be included in the program. The network gave Chaikin "the power to control all brand integration for the show's final season, as well as for a spin-off series launching on the network next year."

Advertising Age has learned that for $300,000 a marketer can buy an "integration package" that will link the marketer's products with the show: "either incorporate a brand into existing L Word storylines or allow the brand to work with the show's writers to create customized storylines, participating in one episode or across several. " Although this type of blunt sales approach may be unusual for a subscription channel, it is becoming the norm across many television channels. Another Advertising Age article on the same day tells of a new small-business makeover/advice series on the A&E cable network called We Mean Business for which Dell will not only be the exclusive technology sponsor, it will "will be integrated throughout the half-hour episodes, from laptops and servers to point-of-purchase solutions to help streamline costs and day-to-day operations for local businesses such as bakeries, specialty stores and salons. "

Appeals Court Ruling May Mark "A Seismic Shift"

This is a real opportunity to transform television.

-Tom Rutledge, chief operating officer of Cablevision

In Chad Bray, and Vishesh Kumar, "Cablevision Wins Appeal on RS-DVR," Wall Street Journal, August 5, 2008

The 2nd Circuit Court of Appeals ruled on Monday, August 4, that that a lower court judge was wrong last year in ruling that Cablevision would violate copyright laws if it created a remote-storage digital-video-recorder (DVR) system. With a remote-storage DVR system, customers would not need DVRs in their home. They would to simply click through to their area on the cable company's DVR and record or access their shows. This approach benefits cable firms because they wouldn't have to spend lots of money to order, store, deliver and repair home DVRs. Broadcast and cable networks and the companies that supply them with programs are against this activity, though, because the lower DVR costs would entice even more consumers than now to record shows and then skip the commercials while watching them. Media firms might appeal the ruling to the Supreme Court, but if it holds, said one Wall Street analyst, it is "a seismic shift" for the media industry.

Comcast's Subsidiary Set to Compete With Comcast

More and more of the best content is going to show up on the Internet. As that happens, cable companies are going to get very nervous.

-James McQuivey, an analyst at Forrester Research

In Nick Wingfield and Vishesh Kumar, "Comcast Unit Cuts Web Deals," Wall Street Journal, July 22, 2008

ThePlatform is a Seattle-based subsidiary of Philadelphia-based Comcast. ThePlatform "provides a service that functions as a management system for converting TV shows into the latest online-video formats, inserting promotions from online-advertising networks and transmitting the content to distribution networks that speed up the delivery of Web video to consumers." Although thePlatform has several competitors--YouTube and Brightcove are two--it is developing a reputation for providing longform videos such as full-length movies for the websites of cable and mobile telephone companies. Some observers believe that full-length television programs and movies will eventually show up on the internet, a circumstance that will erode the popularity of cable systems. Seen from that standpoint, Comcast is positioning its Platform subsidiary to be major player in the growth of internet video, just in case its cable systems suffer.

With DVR Use Growing, Network and Cable Execs Rethink Strategies

I’d like to see this get to the point where we have so much content that consumers can actually plan their lives around knowing that they don’t have to plan their lives.

-Peter C. Stern, the executive vice president for product management at Time Warner Cable

In Brian Stelter, "In the Age of TiVo and Web Video, What Is Prime Time?" New York Times, May 12, 2008

About 25% of US households now use a digital video recorder (DVR) to time-shift shows and skip commercials, according to Nielsen. The number was 15% a year ago. TV executives say that the increase is showing up in the low ratings for the scheduled viewing of programs. Those ratings sometimes rise strongly when DVR use and online viewing are taken into account. Network TV executives' sense that more and more viewers are planning their viewing via DVRs, the internet and video-on-demand (VOD), and that has already begun to change the way the executives plan network schedules. Cable firms such as Time Warner see their DVR and VOD technologies as helping to cement viewers' relationships to them. Some years from now, the notion of linear television--watching the screen according to programs lineups set by programmers--may well be a thing of the past for most people.

The Big Challenge Facing Cable Firms

[C]able operators are virtually barricading themselves in the home and seemingly ignoring the importance of participating in the wireless explosion.

-Diane Mermigas, Media Daily News columnist

She points out that the "telecoms"--Verizon and ATT--recognize that mobile is the growth area and so are selling a "quadruple play": home-based television, in-home internet service, in-home phone service (via the internet) and outdoor mobile capability. Time Warner Cable, Comcast, and other cable firms at present sell a "triple play," which means that they have not yet positioned themselves to benefit from the advertising money that will stream to the mobile phone. The cable firms are only now realizing that they must act in this direction, Mermigas notes. Even if they get their act together, the competition among these firms around the home and outside it (including in stores) will be intense.

In Diane Mermigas, "Tech Slowdown: Cable Giants Still Wireless," Mediapost's Media Daily News, May 2, 2008.