Saturday, July 26, 2008

Television Under Attack

It must be a terrible time to be in the television business. Consumer media habits are shifting and it must seem every day brings news of a new competitor or new challenge. Here are some of those news items from just the past couple of days:
  • Xbox Live to Premiere Original Comedic Shorts: Remember the good old days when TV networks had a virtual monopoly on daily consumer entertainment? Nowadays, everyone is a competitor, including gaming consoles: Microsoft’s Xbox Live is set to premiere seven original comedic shorts this fall which have been produced by several high-profile talents from the horror movie world. Microsoft hopes to turn one or more of them into a series or movie franchise. The shorts "will be ad supported in some fashion."

  • Radio Getting "Visual": This news items almost seems like a continuation of the last one. Radio now wants a piece of television's action by becoming more visual. CBS Radio has announced the launch of a new video platform for its radio station Web sites. The new platform gives 140 radio stations "the ability to create personalized branded video players to feature station content, such as music videos, artist interviews, live concert performances, breaking news and original programming, and allows stations to syndicate content or embed clips to be shared via social networking."

  • Dramatic Transformation of Marketing and Media: In an interview with Strategy + Business, Booz & Company Partner Christopher Vollmer shares his thoughts on the "dramatic transformation of marketing and media." He notes that "in just the last few years, there’s been explosive growth in the amount of time consumers spend online, " and he predicts that "as people become more accustomed to dealing with media that’s on demand and better aimed at their interests and behaviors, they’re going to find that they want to spend more time in targeted media environments."

    Vollmer predicts
    continued migration to entertainment or information platforms where consumers choose how they interact with programming and content, such as video games, video on demand, and online media.

  • Will the Product Placement Gravy Train be Derailed?: With consumers increasingly skipping ads, broadcasters have grown their revenue stream by collecting cash from marketers in exchange for their products getting into scripts and the hands of characters. Never mind that consumers find product placement increasingly annoying and distracting, this form of marketing has seen explosive growth: Advertisers spent $2.9 billion in 2007 to place their products in TV shows and movies, up 33.7% from the year before, and prime-time product placements on broadcast networks rose 39 percent in the first three months of this year, from the comparable period in 2007.

    All this growth was liable to draw attention, and now the FCC is opening an investigation into the use of undisclosed paid product placements in broadcast TV shows. Seeking to alert consumers when they are seeing paid advertising, several proposals are being consider. Some are pretty minor, such as increasing the font used to disclose product placement during shows' credits, but some consumer groups are looking for far more, such as a crawl in the middle of shows to disclose when paid product placement is on screen.

  • Daily Video Entertainment in 2013 Will Be Less Than 50% Traditional TV: According to the Multiplatform Video Report released by Solutions Research Group, television viewing is projected to remain stable between now and 2013 in terms of hours but will drop as a percentage of the time consumers spend with video entertainment. This is because consumers will continue to increase their usage of PC and mobile video while TV viewing will remain stagnant. TV's share of the total video entertainment pie is projected to shrink from 63.9% today to 47.1% by 2013.

    And even though the hours spent with TV will remain constant, the report predicts that "the ratio of 'linear' to 'time-shifted' programming will continue to change in favor of time-shifting," which means (not surprisingly) even more opportunities for consumers to zap ads on broadcast television.
It will be interesting to see what becomes of free network television in the years to come. With consumers ever more in control of their media consumption, traditional TV will continue to get squeezed in relation to other more targeted, measurable, and consumer-welcomed forms of marketing.

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