Posted on 12/18/2007 5:57:13 AM PST by abb
The reinvention of advertising form and value–media’s most formidable and exhilarating sea change–will intensify in 2008 as an unintended consequence of the writers’ strike. The Internet has been the catalyst for advertising’s seminal moment–making it active and transactional. The lingering strike has stripped TV’s vulnerable ad-supported framework of any semblance of normality: the fall prime-time season and its attendant upfront. The combination of the two is lethal.
The two-month walkout, with no sign of resolution, could be a disruptive force at the worst possible time for conventional television. The inability to deliver the new scripted series sold in the upfront is forcing all networks to compensate advertisers with cash (a virtually unheard-of practice), since their commercial inventory is tight. Even if the writers’ strike was settled tomorrow, it would take months to ramp up original programming worthy of premium ad pricing, and hopefully attract a declining viewer base.
At the same time, the accelerated transfer of creative and commercial value to the Web that has occurred during the protracted strike is permanent. Frustrated writers taking their craft to interactive platforms are receiving support from advertisers, venture capitalists and other investors to establish virtual production companies. This support will endure long after a new union pact is achieved. That’s ironic, since talks stalled over the issue of new media compensation.
Unlike past strikes that have debilitated the television industry, marketers and investors have seen the future, and they like what they see. The Internet can shift ad resources away from slower-growing traditional media. Plus, the medium is changing consumer spending. The art of marketing is being permanently altered by the ability to locate and exchange data with target customers. By making advertising and commerce active and instant, digital interactivity is transforming media’s core revenue stream. When the digital dust settles, product and service providers will be spending more money in more places and in more new ways. Not only to market, but to transact and to mine an ongoing virtual relationship with patrons.
Changing consumer habits and attitudes, as well as advertisers’ willingness to shift dollars to new platforms during the strike, are showing up in barometers from Online Testing eXchange, Magna Global, Nielsen Media and others. Where consumers go, advertisers follow. Merrill Lynch confirms that despite being down 10% year-over-year this season, prime-time ratings among key age 18-49 viewers could drop another 9% from January to May if the writers’ strike continues throughout the TV season. Merrill Lynch analyst Jessica Reif Cohen said she believes the strike could last “indefinitely.” That possibility throws off what remains of the scatter market and makes it impossible for cyclical political ad spending in an election year to make up any of the difference. Even more extreme is the distinct possibility that the upfront ad market and the September-to-May prime-time TV season will be scrapped for a complete revamping that would include continuous content launches and ad sales. Nothing would be financially healthier for commercial TV.
Overall, this unprecedented upheaval in advertising dynamics and economics will prove to be a lucrative realignment in the future. There is no going back. While television and the Internet will coexist for years to come, the economic writing is on the wall: The potency long hoarded by one is being transferred to the other.
The ability of late-night series producers such as talk-show host David Letterman’s Worldwide Pants to negotiate its own pact with striking writers to jump-start production–or for NBC’s “Tonight Show with Jay Leno” and “Late Night with Conan O’Brien” agreeing to return to the air without professionals writing jokes–is shaking television to its core. They join a surprising and enterprising counter-establishment array of options: Vuguru’s abbreviated “Prom Queen,” the MTV-inspired “MyDamnChannel,” the NBC Internet series “Quarterlife” and Will Ferrell and Adam McKay’s “Funny or Die” Web site. All are representative of the snowballing virtual ad-supported creative efforts counterbalancing turmoil on the small screen, and likely to generate less costly, more effective advertising. Once locked into target consumers, advertisers launch horizontal campaigns to tighten the grip. Program and issue-oriented Web sites lead to social networks, buying services and search engines. As they voraciously feed on each other, television and print become more ancillary.
These arrangements are the cracks in the foundation that ultimately will change the way content and advertising are produced and sold for television and new media. While alternatives from social networks to user-generated advertising deliver double-digits results, their overall revenues are a fraction of domestic ad spending totals. The collective draw of so-called new media platforms and devices looks attractive in light of traditional media’s helpless slide.
Merrill Lynch released its lower bottoms-up forecast for 2008 is U.S. ad spending growth of 2.3%, “suggesting downside risk” even before factoring in a possible recession. The culprit is not simply flat spending by the embattled auto, retail, financial, media and telecom advertisers. Merrill Lynch analysts expect Internet advertising to grow $24% to more than $21 billion in 2007 and double by 2011, despite general economic uncertainties, which will make targeted marketing and e-commerce look like safe havens. The digital opportunity will increasingly reach beyond the Internet to mobile digital devices, such as cell phones and PDAs, not necessarily reflected in the growth forecasts.
Another point that analysts are beginning to make: Despite meticulous estimates for DVR, VOD and streaming video extended viewing, the television universe is struggling to keep up with other content viewing, data, entertainment and communications options. Given the writers’ strike and increased broadband use, it’s difficult to precisely determine TV’s future. But one thing is certain: Consumers and advertisers are increasingly scattering to new media places where the makers and brokers of television can only hope to be.
ping
See BS
Telling you what to think since 1980
the new reality facing PRAVDABCNNBCBS:
“Unlike past strikes that have debilitated the television industry, marketers and investors have seen the future, and they like what they see. The Internet can shift ad resources away from slower-growing traditional media. Plus, the medium is changing consumer spending. The art of marketing is being permanently altered by the ability to locate and exchange data with target customers. By making advertising and commerce active and instant, digital interactivity is transforming media’s core revenue stream. When the digital dust settles, product and service providers will be spending more money in more places and in more new ways. Not only to market, but to transact and to mine an ongoing virtual relationship with patrons.”
When the web started, we all found out that we could have our own web page and our own blog or, if you were Jim Robinson, your own forum. But a little later we found out that we could have our own radio show (i.e podcast). And now we find that we can have our own TV show and as upload bandwidth improves with time, we will find that we can stream that video from our own attic. That is a certainly a transfroming event in the history of communications and it remains to be seen who will be the winners and losers in that very democratic (not Democrapic) environment.
Right now you can see pretty darn good HD video streaming from abc.com and, of course, tons of garbage quality video at YouTube and a hundred other YouTube clones. It is certain that competition will force the YouTubes to continuously improve the quality of their video and so we are heading for a streaming HD future on the Internet. $700 HD video cameras, of which there are many, will accelerate that trend. That certainly will dilute the customer base and therefore the influence and value of the major networks. In the end, the major networks can only hold out against this massive competition with quality content. That is why I think the writers strike is so important. Once the content quality falls (and it is doing so pretty rapidly) the customers will flow to alternatives on the net.
Is it time for a regular Jim Robinson videocast?
Cute cartoon. So true.
Blogger: New media order on the way?
The Hollywood writers strike could provide a lesson for those suffering from the mass layoffs in the newspaper industry , writes blogger Ken Doctor. The time may be right for start-ups to break through as online revenue begins to grow.
So today's story in the L.A. Times, by Joseph Menn, put a quite interesting spin on the strike and one that should resonate among news journalists. The story, headlined "Striking writers in talks to launch Web start-ups," put the issue clearly: "Dozens are turning to venture capitalists, seeking to bypass Hollywood and reach viewers directly online". Of course, this is the delayed promise of the web. Creators -- think screenwriters, songwriters or journalists -- create. Their intended audience is not all the middlemen betwixt and between, the agents, the studios, the publishers. Their intended audience is, well, the audience. TV watchers, music listeners, news junkies.
The Internet is the medium that connects the two -- creators and audience -- much more directly than was previously possible in pre-digital days. The screenwriters are turning to venture backers, and creating an alternative to being beholden to the studios.
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If anyone has been watching “Quarterlife” online....I say they need to revamp the product, not the distribution system.
quarterlife.com
also on MySpace, and will be aired on NBC in the spring.
Not by my counsel. Production values such as photo and fancy HTML tricks are one thing, and video is another.Even the use of italics and boldface and colored type can be overdone to the detriment of content. With automatic spellcheck on my Mac, there is no longer any excuse for me to ever let typos bleed thru to a post. Which means that I have to vet the spelling carefully. The production values in text and the occasional still image are cost enough - I do not prefer to see us going to video. Uses up bandwidth without adding much if anything to the intellectual heft which is the raison d'être of FR.
Think of it this way: Rush Limbaugh is a star for two reasons:
It follows that you can be an excellent analyst without being able to compete with Rush because of his talent at a form of production value which exploits the audio broadcast. If you can't compete with Rush in his audio production values, why would you think you can compete in the regime of video production values?
- his excellent analysis of current events, and
- his ability to verbally dramatize (which was grieviously threatened by his deafness).
In print the fact that I look more like Fred Thompson than Mitt Romney is perfectly opaque. And that's the way I like it.
Well you may be right about that but my belief is that the very visual younger generation is flocking to video websites and that these websites will dominate the distribution of news in the future.
Video is admittedly not a good medium for a forum. You are right on that count. But it is an excellent medium for presenting the news because in many cases the moving image is important - we want to see what happened first hand. You cannot do that with the written word or by listening to someone's verbal description of the event.
So maybe I should withdraw my recommendation for a regular Jim Robinson videocast but it does seem that it is time for Free Republic to accommodate the posting (i.e. embedding) video that is already on the net. Now maybe you can do this now. I haven't tried it, but I'm betting it wouldn't work.
Just putting in my $.02 for the Good Old Free Republic.
I have my PC hooked up to my 32” lcd. Video quality by the likes of Youtube are going to be left in the dust Many new sites are starting to appear. Check http://www.stage6.com/ or www.joox.net to stream old and new movies using Divx. Amazing content and quality. Check them out.
Bump
Well, mebbe if we could get Jim to quit posting in his skivvies... ;-)
That to me is actually a serious point - I do in fact post a lot before I dress for the day, and it's unlikely that I am unique in that respect. It's one thing to Skype my daughter, who wouldn't be surprised to see me in pajamas and house coat at the hours I find myself calling to her time zone. Quite another to say that I shouldn't post unless I'm wearing a tux.Along similar lines, there is such a thing as "conservapedia" as an alternative to Wikipedia - but even tho you have different editors the format constrains you and that actually biases the result subtly. My unwillingness to jump through the hoops required by the format means that my analysis doesn't make it into the encyclopedia. An analysis which I consider important, and essentially unique to my humble FR postings.
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We have, in a relatively short period of time, progressed to video largely due to an explosion in infrastructure that amazingly has barely kept up (or perhaps not quite) with demand. Whether this technology will support realtime productions is a moot point - it already does. Several representatives of the MSM have pointed out that these will inherently lack the verisimilitude of a professional news production. That point is laughable. But they go on to state that these will lack the slick presentation as well, and this seems to me a valid point.
We wouldn't have to choose between slick presentation and truth if the MSN hadn't made a collective decision that influence was more important than truth. They did, and we do.
It's certain that Big Journalism did make such a decision. The question I have addressed is whether that decision was "collective" - implying a conspiracy - or whether it can be explained in economic terms. And hence was essentially inevitable, and needs to be addressed on a systemic basis.That is my own particular FR hobby horse.
The Market for Conservative-Based News
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