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TinotopiaLog → TV Prepares To Shoot Itself In The Foot (11 Jan 2003)
Saturday 11 January 2003

TV Prepares To Shoot Itself In The Foot

Hydroelectricity is one of those technologies that’s admirable in and of itself for its innate cleverness and sensibility. It takes advantage of something that’s going to happen anyway: water is going to seek the lowest level. Put a turbine in the water’s path, and you get almost free electricity.

That’s a gross simplification, of course, and building a hydroelectric plant often means flooding a lot of land where people used to live, but the general idea still is emblematic of people making lemonade from lemons.

So different from today’s business world, where everyone seems determined to take lemons and make them into shit. The intermediate step in that process — eating lemons — is generally unpleasant and will make most people sick, and shit isn’t particularly valuable anyway. Still, lots of people are being paid lots of money to come up with the idea of turning lemons into shit, particularly in the media business.

The music industry’s lemons-to-shit program is well underway now. Their former customers started pirating music when the price of CDs rose and the cost of illicit duplication fell; the music industry’s solution to this, so far, is to raise prices still and to mount legal challenges against online file-swapping services, thus ensuring that successive systems would become more and more efficient and difficult to police. They’ve already sealed their own doom, and they don’t even seem to have noticed.

Now, it appears, it may be commercial TV’s turn. A story in the New York Times (see here after the NYT starts charging you $1 to see that article) covers one of TV’s first responses to the devil that is TiVo.

In case you’ve been living under a rock for the past few years, TiVo is one of a class of devices known as personal video recorders. These are computers that live under your TV set and mediate your TV experience. They do a lot of things, but one of their functions is to time-shift TV programs, much as you’ve been able to do for almost 30 years with a VCR. The difference is that TiVo and its cousins make it easier to watch your favorite programming time-shifted than to watch it “live”. Rather than screwing around with the blinking 12:00 and finding blank tapes, you tell TiVo that, for instance, you like The Simpsons. TiVo will then record every episode of The Simpsons, whether it’s a new one on Sunday night, a rerun, or one of those “gotcha” Simpsons that Fox likes to occasionally drop into the Wednesday night lineup with little fanfare. Should The Simpsons show up on another channel for some reason, it’ll be automatically recorded, too. You, the human being, no longer have to worry about any of this; you have a robot to make sure all this stuff is available for you to watch when you want to watch it. It’s a brilliant device.

I have had a TiVo for a few years now, and the net result is that I watch a lot more television than I did before. You’d think that the TV companies would be delighted at this — more consumption of their product! — but they aren’t. The truth is, while I watch more TV, I watch fewer TV ads than before.

When you have a TiVo, you tend not to care when a particular show is on; you watch it when you feel like watching it. Since you’re watching a show delayed some minutes, hours, or days from its actual broadcast time, you can fast-forward through commercials pretty easily. And this is what has the TV people up in arms.

The solution described in the Times article is to produce a program that incorporates advertising into the fabric of the show itself:

Among the possibilities he cited was a permanent Pepsi display behind every music performance on the show. He said the producers had also come up with suggestions like having some rap artists, like Method Man and Redman, go to the Nokia headquarters in Finland to take part in their internship program. “We could make a little three-minute funny film out of that,” Mr. Davies said.

The Pepsi idea doesn’t seem like it would make much of a difference to the viewer, except that after watching a performance, he might subtly want a Pepsi. The idea of Method Man and Redman going to Nokia in Finland actually strikes me as potential comedic gold.

But it won’t work, and I’ll tell you why:

  1. It doesn’t fit in with the current economic model of TV, which is: make money on the first run, and then make more money by syndicating the show. This show won’t be able to make as much in syndication, since the ad space on the stage you originally sold to Pepsi can’t now be sold to someone else. And if Pepsi refuses to pay, you either give them free advertising in syndication or you forego all your potential syndication revenue.

  2. Sponsors are famously finicky about how their brands and their products are portrayed. Method Man and Redman might go to Nokia as interns, but it will be necessary at all times to make sure that Nokia and Nokia’s products are portrayed as the be-all and end-all of technology. I can see the company even balking at the notion that people like Method Man and Redman would be allowed in the doors of the place. It’s hard (but maybe not impossible) to be entertaining when you have such serious restrictions.

(That actually might be the largest part of the problem: advertisers, by and large, are reluctant to have their products appear in anything but the best light. This means not only the obvious step of never suggesting that Ivory soap does anything but get you nice and clean, but also of never suggesting on TV that anyone but the best, most-upstanding pillars of the community ever use the product, and in the very blandest, most inoffensive surroundings possible. TV ads are under such restrictions from sponsors who do not want to take any chances at all with their product’s image that they’re cultivating the image of blandness — and producing TV ads that offer nothing to the viewer in exchange for his attention.)

The producers of this show — Live From Right Now, it’s called — seem to forget, too, that what they’re doing is selling the audience to the advertisers; that is, they have to attract an audience, and then sell some of that audience’s attention to people who want to publicize their product.

Mr. Davies added that the show could charge a movie company, for example, for an appearance by one of the stars of a new film. It could also charge for guest hosts.

The problem with this is that if a celebrity is truly interesting, and if there’s a good possibility that an audience might actually want to see this person on TV, they’ll appear on Saturday Night Live or Jay Leno without paying for the privilege. You will never be able to get a star who’s actually in demand to appear on this show, because such an appearance will be strong confirmation of B-list status. And we’ve already seen, with commercial radio, the results of programming for the benefit of the industry, rather than for the benefit of the putative audience: people stop listening.

That won’t apply to Live From Right Now, though, the producers believe. There’s an unmet demand out there for shows hosted by minor celebrities like Corey Feldman or Todd Bridges and featuring “a series of fast-paced, entertainment-driven infomercials” with “frequent mentions of [the sponsors] and their products”. It’s going to look like “an HBO program — running without interruptions”, they say. The telling bit here is that they consider the defining characteristic of The Sopranos to be that there are are no commercial interruptions.

The irony of all of this is that TiVos and similar devices have the potential to save broadcast TV, if only the TV people would stop fighting — every story I’ve seen about this has used the word “fighting” — their audience and instead embrace what technology can do for them.

It seems to me that a TV station is effectively idle for up to six hours a day. From about midnight until whenever the network morning shows start (I say “whenever” not because I’ve never been up early enough to find out but because it varies by time zone), most broadcast TV stations rent time to people like Billy Mays, of OxiClean fame. The time is of so little value that the TV people can’t even be bothered to program it themselves.

Why not, instead of attempting to force people to watch advertising by interweaving it with the entertainment (and in the process screwing up your own business plan beyond repair), present them with shows and ads they want to watch?

Imagine a world in which everyone who watches TV uses a TiVo. Since this is a hypothetical future world, TiVos have a few capabilities that current models do not.

Let’s imagine that you are a Fox network executive, faced with a show like Family Guy. Family Guy was a cartoon show that got rave reviews and won a number of Emmy awards. The show was ultimately cancelled after a run of a couple years, though, after the network screwed with the scheduling enough to put the ratings in the toilet. At the end, it was almost impossible to figure out when it would be on.

In a totally TiVo world, scheduling doesn’t matter. Show it at 3:00 a.m., and everyone who likes it will find it on their TiVos the next day. Those who don’t like the show are unlikely to stumble across it in the wee hours of the morning, so they won’t be offended.

It’s the hypothetical features of future TiVos that make for especially attractive and lucrative options. If you have cable TV, you’ve certainly noticed that once in a while an ad for a local carpet cleaning service or car dealer shows up on CNN or some other national network. Your cable company has sold these ads locally and inserted them into the CNN feed before it’s sent to you. It wouldn’t be too much trouble to apply this same technology on a much smaller scale, and to target ads to individual households.

After The Family Guy is finished at 3:30 a.m., Fox could show an hour’s worth of commercials. Nothing but ads for a solid hour. Nobody in their right mind would ever watch this, but your TiVo would, and it would record the ads. It would now have 120 commercials on hand, ready to show you whenever a program carried an ‘Insert Ad Here’ message. Unlucky people who are still watching TV the old-fashioned way would see whatever default commercial had been broadcast with the show in the first place.

Being able to target ads like this would mean that I wouldn’t have to see any more ads for adult diapers and impotence drugs, neither of which I have the slightest use for (yet). The TV people would be free to show me and people like me ads for antique Porsche parts, computers, fancy TVs, and other things that I might actually want to purchase. Not many people would see the more obscure ads, but the CPM — the price advertisers are charged based per thousand people who see an ad — would be relatively high, because the advertisers would know they’re targeting exactly the people they’re going for, rather than the people who happen to watch a particular show.

The TV networks could, by using instead of fighting the technology, and by mining rather than tricking their audience, charge more for ads and be able to show 25%-30% more programming that carries these more-lucrative ads. They won’t do that, though, because their goal isn’t to make more money, it’s to make more money within the little world they’ve created and are familiar with. They understand how to manipulate Neilsen ratings and how to make money by selling ad packages that don’t meet the needs of either their advertisers or their audience. They then understand how to whine when new technology makes it impossible to continue to ignore the flaws in their business model.

Just remember, when some TV network does this and their CEO is proclaimed a genius, you saw it here first.

Posted by tino at 12:33 11.01.03
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