Inclusion and other fairytales: Racial inequity in media and content
Inclusive content is simply good business – so why doesn't more of it exist?
Mad Men is going to be cancelled. Not the TV show – the business model.
At the Digital Hollywood Media Summit in New York City, top executives (division presidents and such) from all the television-focused media companies and major advertising agencies.
They spoke on numerous panels, and it became clear that the chaos in this industry is intensifying. There was often good debate between those (mostly from the largest media companies and advertising agencies) who are completely invested in the current business model and think they will find a way to solve their problems, and those who can list all the lethal threats to the model but are afraid to say in public what many believe in private: The advertising model cannot survive as is.
Three megatrends in media and advertising driving change
There are a few key factors driving rapid change in the media industry:
1. Explosion of content. As someone said, distribution used to be the hardest thing to get. A few years ago, about a dozen people, the heads of the networks and studio heads, determined what you had the option to see. If it wasn’t on a TV network or in a theater or DVD, you couldn’t see it. Now distribution is the easiest thing to get. Anyone who develops content, good or bad, can make it instantly available to the whole world in the speed of an upload. A big problem is how consumers can find what they want – product discovery – but that’s another discussion.
There are hundreds of thousands of professionally developed, high quality short-form and long-form videos looking for an audience. Many of them hope to be funded by advertising (just look at all the clips you can watch for free on any of the network sites or other portals, and the price is you must watch an ad first). And those that spend ad dollars are increasingly developing their own content as an advanced form of advertising. According to the CEO of Buzzfeed, every Fortune 500 company is developing their own content. So the problem is that the total number of ad dollars that companies are spending is increasing slowly, if at all, while the volume of ad-supported content is exploding. So there are just not enough ad dollars to go around.
2. Demographics and the DVR. Almost half of U.S. homes use a DVR, and the rate is disproportionally high among the 18-49 demographic, which is where ad dollars are spent. For some viewing categories in this demo, 60 to 80 percent of viewing is delayed. Time-shifting a program with a DVR equates to skipping through ads. Nielsen is trying very hard to measure this, and if they are successful, advertisers will see in stark relief how much of their money is wasted.
3. The “channel” is the walking dead. The head of research for the Oxygen network said his viewers tell him flatly, “I don’t watch linear TV anymore.” Linear TV is traditional channel TV—one program after another, in order. Today, partly because of the DVR, partly because of the prevalence of Netflix, Amazon Prime, video on demand and pay-per-view, increasingly people don’t think of their viewing as tuning in to a channel or a network. They just want to watch what they want to watch—a la carte. As a result, the proportion of shows they watch with embedded ads is decreasing, and the networks are missing the opportunity to show ads in between shows.
The new social media, according to The Youth
Digital natives are driving growth of new social media platforms as they look for authentic and meaningful content and connections.
The future of advertising is being transformed by digital
So if content is unable to get sufficient funding from advertising, where will the money come from? People who want to watch good content will have to pay for it.
People are perfectly happy to pay for music and books, and increasingly newspaper paywalls are successful.
Video content will go the same way.
There is lots of evidence that people will indeed pay for quality—or at least desired—content. Just look at HBO or Netflix. Increasingly, people don’t want to buy all of HBO or Netflix for a subscription price per month – they want to buy programs a la carte. A fascinating phenomenon is people who subscribed to Netflix to watch House of Cards, then cancelled when they were done watching it.
At the conference, we discussed the fact that as more streaming video is sold as discrete products, the same technologies and techniques that have been so successfully applied to physical goods e-commerce will apply to video monetization. This is an area hybris software is working on very seriously.
