The Fight Over Google TV

In an important sense, it’s a fight over the future relationship between the internet and the big set in the home. Google is not the first company to try to bring Web video to the TV. Microsoft Media Center can do it, as can Boxee (an Israeli-US startup). Netflix and Apple TV it stream TV shows and movies, but typically for rental or YouTube, though the forthcoming Apple AirPlay will be able to stream all web video into the TV.

Google’s notion, more sophisticated, is to organize the web choices and present them to you via a search engine. That has the networks (typically the content owners) and cable firms particularly concerned. They have been trying to stop Boxee for a number of years. Google has more clout than Boxee but is still boxed in by some forces, at least for now. But Time Warner, which has been trying to put its programming behind paywalls everywhere (and has spun off its cable firm), sees Google TV as an opportunity.

From Jessica Vascellero, "Time Warner Sees Ally in Web," Wall Street Journal, October 6, 2010.

Sam Schechner and Amir Efrati, "Networks Block Web Programs From Being Viewed on Google TV," Wall Street Journal, October 22, 2010.

The New Face of Living Room TV

Clearly, it’s not just in the living room; bedrooms and rec rooms have them too. A new development is that people are increasingly buying flatscreens connected to the internet, and just as with mobile devices the app-loaded real estate on the top of the deck is taking on big marketing value. Google is deep into this via Google TV (an open source TV search engine aimed at changing the way people think of viewing), but so are set manufacturers.

Digital-media expert Shelly Palmer reflects on some of the implications in "Fighting For the Digital Living Room- Wrong!!!"

Playing Doctor

You might be interested in my new book about the history of the prime-time doctor show formula and its relation to the sociopolitics of medicine. Called Playing Doctor: Television, Storytelling and Medical Power, it’s a revision and expansion of my book that Oxford University Press published in 1989.

Annenberg’s PR people put together a video in which I discuss some themes of the book. With clips from shows (implemented in a fair-use fashion), it clocks in a 9 minutes, 39 seconds.

http://www.youtube.com/annenbergschool#p/a/u/0/w6_HCSFXWww

The University of Michigan Press site for the book is here:

http://www.press.umich.edu/titleDetailDesc.do;jsessionid=2292CD6C5545748970148891827D8741?id=354930

Ad Spending on Internet Tops TV in UK

This is the first major market where online has overtaken television to become the biggest single medium.

- Guy Phillipson, head of the British the Internet Advertising Bureau (IAB)

In Kate Holden, "UK Internet ad spend overtakes TV for first time," Reuters, September 30, 2009

The recession in the UK has caused a general advertising slump, and that has affected the growth of internet advertising there. Nevertheless, advertisers have continued to built their presence on the internet at a faster pace than in other media. "Spending on Internet advertising in Britain grew 4.6 percent in the first half of 2009, outperforming the wider ad sector, which slumped 17 percent, and making it the country's biggest ad medium ahead of TV." One consequence is that the internet has pulled ahead of television as the medium drawing the most advertising pounds.

According to the report from the UK's IAB, "ad spending on the Internet grew to 1.75 billion pounds, with the medium accounting for 23.5 percent of all spend, ahead of television for the first time." One commentator suggested that the shift to online reflects a belief that search advertising and other "clickable" ads show better than with traditional media how successful the ad spending has been. It will be important to see whether this trend continues when the recession ends.

The Rise of Web Video

[B]roadcast mode is dead. Now is the time for co-creation, user distribution and a true democratization of video content.

Tom Smith, managing director of Trendstream

In Gavin O'Malley, "Report: Online Video Fastest-Growing Medium In The History Of The World," Online Media Daily, May 29, 2009

Trendstream is a social media research consultancy, and so it has a vested interest in highlighting the popularity of the rapid growth taking place in the sharing of online video. The major broadcast and cable networks would dismiss Smith's comment. They would point out that the viewing of broadcast and cable television still takes up substantially over 95% of Americans' time with video. Nevertheless, Trendstream is using its findings from a survey (carried our by research firm Lighstream) of 1,000 "active web users" to point to the quick growth of watching clips online. The company claims that "with 72% of US Web users watching clips online, Web video outstrips both blogging and social networking, and is now the leading 'social media platform.'"

In recent months Hulu and other sites for network-quality video have gotten much news, but Trendstream notes that most of what goes on around video is the downloading and uploading of short clips. Moreover, "users of all ages now generate far more content than traditional broadcasters and collectively contribute the majority of video content to the Web."

Beyond TV's 30-Second Commercial

...the whole industry is moving toward a different model where deciding whether something is a hit or not is not just based on how much you charge for 30 seconds of advertising.

Brad Adgate, senior vice president for research at Horizon Media

In Edward Wyatt, "Despite Lower Ratings, Cash Flow Rises for ‘Idol’," New York Times, May 10, 2009

Despite declines in audience ratings over the past few years, the American Idol TV show is still making enormous--and growing--revenues for its owners. But the money is increasingly coming from more than the standard 30 second commercial: "The deals, which include products as disparate as ice cream and trading cards, as well as the more familiar partnerships with iTunes and AT&T, have driven tremendous growth in the profitability of “American Idol,” according to the public financial statements of the parent of 19 Entertainment, the company founded by Simon Fuller, the creator of the show." Fox Television, which broadcasts the show, also makes money by spinning off syndicated versions of it.

The activity is clearly not limited to Idol. Everyone in TV is trying to find "ancillary revenue streams" for their materials as audiences for individual programs decline with channel fragmentation and the amounts networks can charge for commercials consequently decline as well. One gauge sponsors of program deals like to see is audience "engagement" in the material. And Idol certainly still has that: "Last week, viewers cast 64 million votes, the most ever for a nonfinale episode."

Canoe Ventures Paddles to Cable's Future

The cable industry gets it. We have 18-year olds. We know what the internet is. We are not Luddites.

- David Verklin, CEO of Canoe Ventures

In Wayne Friedman, "Death Greatly Exaggerated," Media Daily News, March 25, 2009

People are still watching lots of "television," according to Nielsen. The company found that viewing in 2008 increased five minutes in 2007 over 2008. Manish Bhatia, president of advanced digital services for the Nielsen Company, says the "average person spends two minutes watching a video online. If I were to fast-forward, we will probably be spending more -- not less -- time with TV."

But what "television" means is changing dramatically. As Bhatia notes, people interactions with video online is pushing programmers and marketers to transform TV into an interactive medium. That is where Canoe paddles in. It is a consortium of cable operators representing 96% of U.S. cable TV homes. By late 2009, , will be able to send targeted commercials to zones based on incomes. In an example, Verklin said “American Express could get to advertise their Green card nationally, while its upscale gold card will target a ‘zone’—households with income of over $100,000.” He added that “the holy grail of TV marketers” will happen by around 2012, when advertisers will be able to customize their offers to individual households based on a huge variety of data about them.

By 2012 or a bit later, "television" to people may well mean bringing internet video, broadcast stations, and cable networks together to the large flatscreen home set, as well as to desktops and laptops. To attract marketer-specific audiences, cable operators may well begin to customize news and entertainment as well as ads based on viewing, demographic and lifestyle data. All this raises important issues around privacy as well as placing people in information "silos" based on marketing categories.

The Rise of Product Integration

Every single first-year show we’ve launched has an advertising partner in place, which has probably never happened in broadcast TV.

- Ben Silverman, co-chairman of NBC Entertainment

In Brian Stelter, "Low Ratings End Show and a Product Placement," The New York Times, November 13, 2008

When NBC ordered the cancellation of My Worst Enemy recently, it meant more than the demise of a series that many in the network were sure would succeed. It also marked the end of a program that it had sculpted to highlight General Motors cars in a deal that had GM underwriting some of the production costs. Such "product integration" deals are becoming common on television, and NBC's Silverman is one of their greatest proponents on NBC-Universal's broadcast and cable properties. The reasoning behind it is straightforward: The network gets money to help create the programs, while advertisers get the ability to present their products within programs at a time when viewers are increasingly likely to use DVRs to fast-forward through regular commercials.

In the case of My Own Worst Enemy, NBC and GM "teamed up early in the production process, created commercials together and carefully added the Camaro and Traverse brands to the story lines." The lead character, played by Christian Slater, had two personalities; he drove the Traverse sport utility vehicle in his ordinary middle-class father manifestation and the Camaro converticle when a secret agent. Of course, even the best laid plans cannot guarantee success with the audience, and Nielsen's ratings doomed the show.

The demise of My Own Enemy by no means spells the demise of the basic product-integration business model. Quite the contrary: NBC not only has built several current shows around advertiser interests (including Knight Rider, with Ford), it is pushing the concept forward with gusto and sensitivity to the interests of specific advertisers. In the words of Marc Graboff, the other co-chair on NBC Entertainment, "It's not about sticking a Coke can on a desk anymore. It's an evolving form."

The TV Set as a Social Hub

The TV set is evolving and content itself is evolving

- Michael Gartenberg, an analyst at Jupitermedia Corp.

In Christopher Lawton, "TV+Social Network=? " The Wall Street Journal, October 27, 2008

The idea of television as a domestic box that sends programs to homes but doesn't not allow anything else is increasingly out of date. Many cable and satellite systems allow video on demand, and entertainment consoles by Apple and Microsoft allow people to view internet content on their big screens. Increasingly, even people's interactions with their friends and relatives are moving through the TV set.

While many still have to go to their internet-connected computer to interact with others about what they are viewing on their TV, that is changing. A growing number of tools are allowing people to not only view a broader type of programming on their TVs, they are allowing people to share their experiences. "The movement was pioneered in part by videogame-console makers such as Microsoft as a way to connect hard-core gamers [on its Xbox] for competitive matches, and it is gaining momentum as those companies and others seek to entice a broader audience to chat with friends, share photos and recommend movies and music over their television screens."

Microsoft is working to enhance the features of its gaming console that allow people to form communities of interest even when they are not playing games. Sony is doing the same thing. In fact, even Hollywood movie studies have gotten into the act. "Disney's recent release of "Sleeping Beauty," for example, includes a "movie chat" feature in which friends watching the movie simultaneously from different locations can exchange messages on their TV screens with Internet-connected devices such as iPhones or BlackBerrys."

Tracking Product Buzz Around the Web

If you’re just using the Nielsen results to look at how you think about placing your [advertising] spend, you’re ultimately going to be flawed because we need to take account of the different activities that are taking place on the Web.

- Dan Neely, CEO and founder of Networked Insights

In Jon Lafayette, "Cracking the Code’ to Put Online Dollars Where They Belong," TV Week, October 29, 2008

Neely's company represents a growing business that speaks to marketers' desire to learn as much as they can about the people they want to reach online. Based in Madison, Wisconsin, Networked Insights "says it measures not just the 15% of people who post content online at social sites, but also the other 85% who are interacting with that content by reading, ratings sharing, linking or inviting." The company analyzes more than 17,000 social media sites (such as MySpace) and social networking sites (LinkedIn is an example), which include more than 120 million unique users and 3.5 million interactions per day.

Networked Insights works with clients to figure out where conversations are going on online around certain products or topics. For example, Neely says that television shows with a lot of conversation tend to have more "engaged" audiences when they are viewing. It's useful to know that, he says, because "those engaged viewers are also likely to be paying attention to ads."

Moreover, Neely contends that his company database can tell his advertiser-clients how many people they can expect to reach with social media." “We believe we’ve cracked the code with regard to how do you actually measure this stuff,” Mr. Neely said. “It’s been a trial-and-error approach. We’ve said we can actually tell you where to place and when to place, because this is where they’re going to be and this is what they’re going to be talking about.”

Watching Hulu More Than "Standard" Cable

And today I can safely say I spend more time watching Hulu than I do my standard home cable connection.

-Michael Arrington, media industry analyst and blogger

In Michael Arrington, "Happy Birthday Hulu. I'm Glad You Guys Didn't Suck," Tech Crunch, October 29, 2008

Arrington marks the one-year birthday of Hulu, the site owned by NBC Universal and News Corporation that streams commercially produced video materials. The site now carries about 400 movies and programming from 110 content providers, including Lionsgate, Paramount, and the Sci Fi Channel. The material is attracting a lot of attention. According to Nielsen, they streamed 142 million videos in September, 2008.

One strategy that Hulu has used to gain attention to its material is to place links to its material on other popular sites around the web. Having 30 distribution partners such as MNC, Yahoo, AOL, Facebook and IMDb means that millions of people will notice it even if they don't go to the site.

Clearly, Hulu and other sites like it (Joost, for example) challenge the traditional model of television. Michael Arrington is not the only person whose ways of viewing are changing fundamentally.

College Students Get a Taste of TV's Future

It's a very personalized experience.

-Linor Tal Levav, vice president-content strategy and acquisition, Intercast

In Joe Mandese, "Esurance, MPG Back New Ad-Supported Video Service: Provide Pay TV Series Free To College Kids," Online Media Daily, October 13, 2008

Students at a few leading universities, among them Purdue and Columbia, are part of a test that allows them to watch TV shows from Paramount's subscription network Showtime for free. The programming includes series like Dexter, The Tudors, and Californiacation. They are being made available for free to students who agree to watch ads on a a new online service, Kazam. Kazam is using technology by Intercast, which runs on Internet2, an ultra-high speed service that research universities have implemented on their campuses.

Although from the students' standpoint the service may be a way to get cool programming that would otherwise cost money, Intercast, Kazam and their advertisers see it as a way to use the fastest technology to test the customization of commercials and programs based on data Kazam has about each student. Intercast's Levav says that "The nice thing about our platform is that we serve the ads from storage, so we can serve them in great quality, high-definition, and we can combine features like targeting and interactivity and data feedback." The consequence is that the Kazam service can serve different shows and commercials --"say an episode of "Dexter" for one student, or a Discovery Channel show for another, or even a Sports Illustrated swimsuit special for a third, along with different commercials"--based on "the viewer's profile, their user behavior and the context of when and where they are viewing the content."

Although it seems like simply a way to make money from advertising in a college environment, it's really a test by advertisers, media planners, and technology firm of the TV model for all Americans in the not-too-distant future.

Hulu's Successful Distribution Model

"We're very similar to Starbucks in that we're an impulse business. They put (coffee) everywhere and make it easier to consume, and we try to do the same with content.

-Jason Kilar, CEO of Hulu

In Gavin O'Malley, "Hulu's Obsession With 'Every Little Pixel' Pays Off," Online Media Daily, September 19, 2008

Co-owned by NBC Universal and News Corporation, Hulu is an advertising-supported service that streams "premium content"--that is, professional programs from cable and broadcast television networks. The six month old firm has substantial competition; Joost (with CBS as a major investor) and Fancast (owned by Comcast) are two examples. Yet, according to Gavin O'Malley, "while Fancast launched two months before Hulu officially debuted, Hulu recorded vastly more video streams--119 million--than Fansite's 2.2 millions streams in July." Kilar would like to believe that the reason is the video distributor's punctiliousness. "We obsess over every little pixel," he said. "I can give you a hundred examples of that." At least as important, though, is Hulu's cutting-edge appoach to distribution. Understanding that people might choose to view TV shows on a whim, Hulu has chosen to place itself in front of as many people as possible instead of having them come to Hulu. To do that, it negotiated distribution deals with top website portals, including Yahoo, MSN, MySpace, and even competitor Fancast. The result is the more people are exposed to Hulu's products than if it rlied (like Fancast) only on its own website. This strategy of distributing video content on the web via many exhibitors has in the past few years become the preferred mode for companies trying to reach large audiences.

The Big Challenge Facing Local TV

How much of newspapers' fate are local TV station owners destined to endure? Maybe, too much.

- Diane Mermigas, media columnist

In Diane Memigas, "The Future Of Television: Local TV at Crossroads," Diane Mermigas: On Media, August 25, 2008

Mermigas notes that local television stations are feeling the same long term pressures that are buffeting local newspapers as the media system goes through major changes. She points out that as the February 2009 deadline nears for stations to give up their analog signals and go to fully digital transmissions, questions arise about the directions that station managements will take to place their firms on good economic footing in the new environment. The challenges are many, and not just because of the bad current economy. Ad dollars that used to go almost automatically to local TV stations are now migrating increasingly to websites. Cable TV operators have embarked on a program called Project Canoe that aims to connect cable systems across the United States with the ability to send targeted ads to individual homes. "In a world awash in interactive content distribution options, TV stations have lost their grip. Their sheer numbers exceed what many local markets can economically support..."

What can local stations do? Mermigas suggests that local TV stations may actually have to go out of business. The ones that survive will have to learn to use digital television with other digital media, often working together with Google, Yahoo, local newspapers, and cable operators to gain content and ad support. She says that "Stations able to solidify themselves as the definitive sources of local news and advertising will thrive if they find new ways to translate that online." Finally, she notes that "Local TV station owners could be their own worst enemies in underestimating or failing to properly leverage their local connections to communities, consumers and advertisers in utilizing interactive digital technology to their full advantage. "

Fox Targets Dorms for TV Streams

The light bulb went off -- by simul-streaming 'Fringe' and 'Sarah Connor,' [the college students] get to see the show, and we get the increased fanbase and buzz.

- Peter Liguori, Fox Entertainment chairman

In Michael Schneider, "Fox to Stream Premieres for Dorms," Variety, April 24, 2008

Fox television and internet strategists have come up with a promotion for two new Fox TV series that aims to attract desired young-adult viewers who go online. Fox will stream the broadcast premiere of Fringe and season opener of Terminator: The Sarah Connor Chronicles online at the same time as they bow on TV. However, only people from a .edu domain will be technologically able to watch the stream. Fox figures that most of the .edu viewers will be college students. It knows that they often prefer the web to viewing traditional television. By allowing access, Fox is hoping to short-circuit illegal pirating of the programs as well as to get young people talking about the shows.

The Variety article doesn't point this out, but isolating the streaming audience to the .edu domain has an additional benefit. As Fox executives know, the Nielsen TV ratings do not canvas college campuses except when an individual student comes from a home that is part of the Nielsen national TV sample. If Fox allowed anyone to view the stream online, that might have lowered the national TV rating for the shows. (This is what happened to Gossip Girl on the CW network.) Instead, Fox strategists hope that their approach will raise the shows' profiles among the target audience, short-circuit piracy, build a fan base, and not canibalize its TV ratings--all at the same time.

Promoting the CW by Promoting Gossip

We're not hiding anything ... simply keeping a lid on '90210' until 9/02, riding the curiosity and anticipation into premiere night, and letting all our constituents see it at the same time.

- Statement by the CW broadcast television network

In Brian Sternberg, "Advertisers, Media Left in the Dark About New '90210,'" Advertising Age. August 18, 2008

The comment refers to CW's tack--unusual for a television series--of not screening its remake of "Beverly Hills 90210" for advertisers or the media before the program's premiere. For the ratings-challenged network, the goal is clearly to stoke the rumors, anticipation, and comparison with the original 90210 among the young women and teens who are the CW's main targets. It's hard to stand out in their cluttered media environment, so the CW has clearly tried to get groups that are not their target viewers (in this case television critics and show business personalities) annoyed and vocal enough to cause the target viewers to pay attention.

Perhaps the best example of this phenomenon is the current ad campaign for Gossip Girl. It involves posters with quotes from critics that suggest (in Sternberg's words) "how tawdry and shocking the program can be." Pasting a negative quote from the conservative Parents Television Council (PTC) on the poster below (copied from the Gawker Media site) emphasizes the sexual nature of the poster's scene. It would seem to be a clear way of saying that that the CW disrespects the PTC--and that the viewers should do the opposite to what the PTC would want. This relatively new audience-gathering approach--alienating one group while reaching out to another-- is likely to grow with the development of media outlets that focus on specific audience segments and don't really care whether other segments like the material or not.

The Tyranny of Prime Time

Forcing all the "big" events to a time-shifted-to-prime-time model isn't holding the entire audience, and any U.S. network planning to buy Olympic rights will be confronted with more and more audience bleed as viewers find ways to see events as they happen.

Cyndy Aleo-Carreira, writer for The Industry Standard

In Cyndy Aleo-Carreira, "Users run circles around NBC's Great Olympics Firewall ," The Industry Standard, August 11, 2008

NBC-Universal estimates that during the first four days of the Olympic games 157 million Americans, or more than half the U.S. population, viewed some part of the Olympics on NBC properties (for example, the NBC-TV, USA, MSNBC, and Oxygen TV networks and their online counterparts). Nevertheless, as Aleo Carreira suggests, some US viewers are annoyed because NBC-U has held back broadcasting certain games live or right after they happen because the network wants to reserve them to attract a potentially huge (and therefore lucrative) prime time audience.

Because of NBC's fierce protection of its rights, getting videos of certain Olympic events right after the happen is not easy on the US internet. "A quick search of YouTube shows that Google has pulled down copyright-infringing clips of the opening ceremony from NBC, but coverage from Chinese network CCTV is easy to find. As for the events themselves, NBC and BBC Olympic videos seem to appear and disappear frequently, so it's clear YouTube is having trouble keeping up with the uploads." All these cat-and-mouse games are offending many viewers, says Aleo-Carreira. She suggests that audience pressures should lead future firms that control Olympic exhibition not to be wedded to the concept of prime time.

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. "

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.

Private and Public Developments in TV Product Placement

If you can't measure it, you can't sell it.

-Alan Wurtzel, president of research and media development at NBC Universal

In Alana Semuels, "Research Firm Nielsen Tallying Product Placement Ads," Los Angeles Times, July 21, 2008

The measurement of product placement in television programming has become a major activity during the past few years. Marketers increasingly make deals to have their goods show up during the action so viewers will have no choice but to see them. (When it comes to commercials, they can always switch channels or fast-forward on their DVRs.) The Nielsen research firm has ambitions to become the major go-to company in this area (as it is with television ratings) and it has augmented its own audits of products in programs with the purchase of IAG Research, which uses a different method to track placements. Other companies audit placements in different ways, all trying to prove their value to marketers and their agencies, who need to justify their activities. "Advertisers spent $2.9 billion in 2007 to place their products in TV shows and movies, up 33.7% from the year before, according to media research firm PQ Media. This year spending is projected to hit $3.6 billion, not including "barter" arrangements -- in which a company gives away products to be used in shows, rather than paying for them to be placed there."

In the midst of all this private research activity, the Federal Communications Commission has responded to critics who argue that consumers need straightforward information about when products are being placed in programs in exchange for money. "Such disclosures currently run during the credits, but the agency plans to examine whether product placement notices should be written in bigger print and displayed for a longer period."