I made it over to the AGC conference the other day, and a panel of experts discussed the shift in content consumption we observe today – the Netflix and HBOGOs over AMC and CBSs. Is Distribution now King over Content? People were in agreement that content wasn’t really the money maker anymore but the distribution enablers were. But as I reflect on that from a pure consumer point of view – I wonder if content is still key to winning the hearts of viewers. I mean without John Oliver or GOT or Veep on HBO, would we be such avid fans? Same for Netflix; I mean how impactful has the words FU been on your life?
In fact, distributors are competing to produce their own branded content. Great content is then augmented by no ads on these streaming services. And I, for sure, would any day pay a fee over watching highly irrelevant ads. I have tried watching shows on the network channels, and I squirm in pain every time ads come on, which is like 5 times in an hour show. But because I like Mr. Robot so much, I tolerate on.
Now, while there is no doubt that the future of content is digital and different portals other than TV (in fact millennials are spending roughly 70% of their time watching TV shows on non-traditional devices), it’s important to realize that today, according to Nielsen, the average American still watches 4.7H of television every day. This has declined by only 12 minutes from a year ago. What television networks need to do is retain these clients, focus on creating world-class content the likes of what HBO and Netflix have accomplished and limit or even eliminate the ads that are bombarded onto users. They, of course, still need a revenue model and below are three ways they can do so without making ads so intrusive and annoying to the viewers:
- Enable a “brand content marketing” effort as part of the programming schedule. Brands would pay the content producers to incorporate their products as part of the program/show. Think when Claire Underwood runs in Nike outerwear. Native advertising is now prevalent in almost all other media, so no reason why television wouldn’t be able to incorporate a form of that either. It just need not go overboard.
- Create a TV spot market: use “viewership” data to understand user profile and preferences and sell aggregated data to advertisers for targeted marketing. For example – if I am watching the Amazing Race, I am probably more likely to be an “outdoorsy” individual, so do what you may with that information (aka show me some GoPro ads and not some “fix-your-bald-hair” ads). Google is actually hoping to do this with Google Fiber, that is utilize user location and viewing history to determine which ads are best targeted to the individual viewers. Make sure to allow users to “opt” in for this to mitigate privacy concerns. I have a feeling though that targeted ads might get precedence over sitting through a bunch of random ads if those are the only two options.
- Get brands to sponsor a show, create partnerships with multiple content distributors and lease out the content to alternative platforms. This ensures the brands gets a broad coverage base, and the leasing provides a 2nd source of revenue too.
"Don't need no TV ad." - Neil Young (The Restless Consumer)