Wednesday, May 16, 2007

LESSONS FROM THE UPFRONT: GEO-TARGETING AND THE POWER OF THE NICHE (Terry)
Stories are everywhere regarding the network upfront that's underway this week. While others will speak of program schedules, multi-platform strategies and big advertisers who are leaving the upfront, I want to point out two important items that directly relate to the business of local broadcasting.

The first is from a Media Daily News article on ABC’s delivery of "HD quality" video through its streaming player.

It represents another signal that ABC no longer views television as content sent in a linear pattern through a living-room screen. For advertisers, the initiative and new player will allow for geo-targeting of ads (emphasis mine). Creative can be localized and targeted to individual users.
If a television network can geo-target ads, they are actually competing in the local media space. When local broadcasters did this kind of targeting for national advertisers, it was called national sales. Poof!

We're going to be hearing much more of this language as the months go by, because the reality is that the affiliate system is what's crumbling the quickest as the broadcast paradigm is disrupted by technological innovations.

The second also contains an element of the first. Some observers were stunned by ESPN's appearance during the upfront. In staging its presentation on Tuesday, the cable network made the clear statement that it is on the same playing field as the networks, albeit with one huge difference. ESPN is the penultimate niche information player, and as such, it is not of the "broadcast," all-things-to-all-people mold.

This speaks volumes about the state of the unbundling of the broadcast content model that's been underway since television fragmentation first came on the scene. It's why we all need to be thinking of niches at the local media level, niches we can exploit online.

The ESPN announcement also contained offerings of geo-targeting for advertisers. Again, the companies that own the networks -- the same companies that built their "networks" on the affiliate model -- are now clearly competing with those affiliates in many ways. NBC plans to run episodes of Law & Order on cable before its affiliates. First-run episodes of most shows can now be purchased online, gutting the rerun market. And now, they are able to target users in our markets without us.

Of course, the dirty little secret of the web is that it's possible for us to turn the tables and compete in areas that have been out of our reach due to the boundaries placed on us by the broadcast paradigm. While our real competitive advantage in the new world is our ability to create hyperlocal advertising opportunities for sponsors, we can also expand our reach regionally, nationally and even globally.    <Permalink>

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MORE UPFRONT: THE WHEEL APPROACH IS FINE, BUT IT'S ALL MEDIA 1.0 (Terry)
I love metaphors, and this one’s a beauty. In a recent article for Variety about the upfront, Jack Feuer writes of how television companies are positioning digital media this year.

"Last year, the networks all realized they had to address digital," says Margaret Clerkin, CEO of North America for MindShare Interaction. "They were naive in that they thought they could offer it in a cookie-cutter fashion. ‘CSI,’ ‘Lost,’ every show had the same tactics put against it. I would hope now they understand what works and what doesn’t."

No doubt they do.

The emphasis is evident in the rush to put shows on iTunes and acquire social networking sites like MySpace.

Media buyers and sellers are calling it "the wheel." It’s the idea that you don’t just buy television anymore, especially network television. What you do, instead, is use the network as the hub of a wheel. Then digital and other emerging platform opportunities become the "spokes."

Nice metaphor. Unfortunately, it’s suicidal strategy, if it’s all you’ve got.

That’s because the hub is the problem, and to tie all digital efforts to it guarantees only that disruptive innovations will continue to march forward. The hub is what we call Media 1.0, wherein media companies take elements of the disruption and try to drag them into the mass marketing business model of a deteriorating core. Notice in the metaphor how each of the spokes flows from and supports the core.

The problem is that real business flexibility lies within the disruption, and that is what we call Media 2.0.

Businesses in decline often find that their greatest strength ultimately becomes their greatest weakness, and by tying our digital applications to our core, this "wheel" strategy sacrifices long-term business health for short-term profits.

We can do better.   <Permalink>

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ARE BROADCASTERS GIVING UP ON THE QUALITY OF ONLINE VIDEO TOO? (Steve)
At Streaming Media East in New York City this week, there are standout products that show how far we’ve come in streaming video. You can watch HD video with great sound over the web right now. I saw demos of interfaces that beg the question: "Why don’t local TV websites look this good?"

Terry and I talk a lot about how TV is too obsessed with "broadcast quality." It’s true. While the locals are looking at online video and thinking "our TV product is better," lower-def video is coming along and kicking butt. However, the quality argument which was always specious is now gone. You can deliver high-quality video in a high-quality presentation layer. If you’re starting with broadcast quality -- why not take advantage of that?

Check out Vividas for an example of what I’m talking about. Then go to Maven Networks. And then on to PermissionTV (which I’ve written about before). This is what video and the web can look like online. If you’ve already got it, you may as well flaunt it.

Local TV has already abdicated too much. Newspapers are producing video and are selling video classifieds. Local pure-plays are getting a third (or more) of the online local ad buy. Local TV can still put up a fight with what it knows best: video and presentation. It can’t repurpose what it already has, mind you. It still needs to create original content. But if you combine that high-quality original content with a high-quality online presentation -- you’ve got a great, competitive local product.   <Permalink>

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NY TIMES LESSON: DISTRIBUTE YOUR VIDEO AND EMPOWER YOUR REPORTERS (Steve)
Martin Nisenholtz, Sr. Vice President of Digital Operations for the New York Times Company was, by his own admission, an unlikely choice for keynote speaker at Streaming Media East 2007. He comes from a 156-year-old newspaper which is legendary for being staid and, yes, stuffy. But recently, the Times has made impressive online moves, and Nisenholtz gave some good insight into what media companies need to do right now.

The key message? Distribute your video.

"We need to find a big audience for this stuff," said Nisenholtz. "To reach a broader audience, the Times must distribute its video outside of NYTimes.com. We believe we need to go outside the walls to make this work."

That's quite an admission from the Gray Lady, isn't it?

"With video we intend to distribute the whole piece. We intend to work with blogs. Blogs and newspapers are highly complementary. According to Technorati, last year the Times was the most-blogged source in the world."

A newspaper praising blogs? Did you ever think you'd read that?

Nisenholtz is realistic when it comes to the Times's place in the video food chain. He knows the Times is not going to be there first in a breaking news video situation. Instead, he said, the Times is going for the analysis pieces, the longer-form thought pieces and the less-polished stories. A recent reader survey turned up an interesting nugget: the audience is charmed by the fact that Times reporters are unpolished when they're on camera. TV people look at newspaper people on camera and laugh. The audience looks at them and thinks "these are real people, not plastic TV reporters."

As for training - "What does it take to get a print reporter to do this? After about a half a day of training, the print reporters do get the basic skills they need."

Newspapers have a huge advantage when it comes to web video: they've never done video before, so they have no preconceived notions and, frankly, no bad habits either. "The advantages that the new folks on the block have is that they have nothing to protect," said Nisenholtz. "Even though the New York Times is 156 years old, we’re still new in video. Failure (in video) is not a step backward for us."

Nisenholtz admitted that the Times is still looking for the right sales model. In that, the Times has good company. "So far we only know what hasn’t worked. Pre-rolls are fast becoming a universally accepted bad behavior-response."

But Nisenholtz is hopeful the audience will continue to believe in the Times brand and will stay with it as the paper evolves. "We do believe that in video, brands matter," he said. "Content choices are expanding at a dizzying rate. Brands serve as a beacon out there. We think that is one of our differentiators out there. And we think quality matters, too."   <Permalink>

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CLINGING TO OUR STATIC PLANS (ALL THE WAY DOWN) (Terry)
Philadelphia Weekly carries an interesting interview this week with Anne Gordon, the outgoing managing editor of the Philadelphia Inquirer. She'd worked at the paper nine years and as managing during the last seven volatile years. When she first moved into that role, there were 640 people working in the editorial department. She leaves with 330.

What she says is important for us in broadcasting, because we're in the same boat as our print brethren. I was talking with a print fellow recently about the state of the business, and he predicted that television's collapse is imminent, too, and he worried that it might be more sudden than people realize.

Ms. Gordon makes a couple of statements that are vitally important.

So what's the state of the newspaper industry?

"Change is coming from the outside and not from the inside. There's too much resistance to change among newspaper people."

It sounds like you're of a mind with Inquirer publisher Brian Tierney there.

"Brian is an outside voice, and there are times when someone from the outside can see things more clearly. The industry's problems are technology-based and lifestyle-based, and the changes are more profound than any of us want to admit. Newspapers are suffering the pain of their failure to innovate."

Where are they headed?

"Newspapers will be one of hundreds if not thousands of ways people receive their news. I see print journalists playing an active role less in the breaking of news and more in the analytical side-explaining it. I see opinionated, personality-driven voices breaking free of newspapers, going out on their own and becoming stars. I see journalists who will have to become real experts-Ph.D.s in select subjects. There will be stars who will earn a lot of money, and everyone else will earn a lot less. I also believe this whole democratization of news, with a give and take between the provider and consumer, is not a trend but a reality of the next generation."

Do you find any optimism in the Inquirer's 0.6 percent increase in circulation?

"I think the real question is whether circulation is the goal to chase."

That last one is a stunner but right on the money and it could also be said of the page view.

Consider this interesting bit from the New York Observer in which Forbes.com chief executive Jim Spanfeller defends complaints from former staffers that the company is a "page view sweatshop." Spanfeller called the complaint a "fair thought."

"One of the fundamental differences of online versus offline [is that] online is completely trackable," he said. "You have 60, 70, 80 stories [in print], and you don’t know how well consumed each one is."

Therefore, Mr. Spanfeller said, "not looking at the data would be foolish," and "tracking page views is something that is very important."

There are three important things to note here. One, the page view world is history, as we've explained previously. Two, the reason media executives like the page view paradigm is that it appears so scalable and "manageable," and it gives the false sense of doing something. Finally, an obsession with page views is decidedly anti-user, and this is its real defect as an online business strategy (I always go to the "print" version instead of playing the multiple page game of big information sites).

Besides, it's just too easy, isn't it? If we're going to make it in the digital world, we have to roll up our sleeves and get our hands dirty. Static plans (and that's what the page view model is) won't do the trick anymore, because our content simply doesn't scale online as it does in the Media 1.0 world. We can't ride our content the way we used to.

We need to get busy with the task of reinventing ourselves, instead of waiting for somebody else to do it, in the foolish hope that they will hand us the static formula for the next money tree. Station-by-station and market-by-market, we are now local media companies.   <Permalink>