Media is Like a House Full of Termites

What is the future of television? That simple question seems to roil the media market today.  Pundits weigh in and, depending upon who you talk to and where they reside in the industry, you will get a range of answers.

So I was curious when I attended the CCW this past week. The CCW is a compendium of hardware, software, intellectual property owners and distributors. It is a 360 degree view of our industry and, as such, offers many expert perspectives under one roof.

My opinion is, like house full of termites, there are a lot of challenges out there that seem to gnaw at the foundations of our business.  For MSOs, the current challenge to their business is two-fold. It is the technology that is increasingly taking viewers away from the STB to over the top. And it is also the changing demographics; cord sensitive consumers who may not see linear TV as a must- have. For networks and digital video platforms, it is the combination of DVRs, VOD and ad blockers that is squeezing potential income. For the data owners and providers it is the continued "siloization" of data streams at the end user that makes data aggregation expensive and each individual dataset less valuable. It is also the challenge of content coding where efforts to standardize externally through EIDR and Ad-ID add to internal needs that will require internal re-transcoding every few years.  Whew!

Here are some takeaways from the conference:

TV Rocks!

But is the television business really in trouble? Not according to Michael Wolff whose book, TV is the New TV has been causing waves in the industry ocean. Wolff is a cheerleader for TV … at least as he defines it. "TV was once a distribution channel.  Now it is a vastly expanded business model. The TV business is now many businesses and it is monetized in different ways," explained Wolff.

He has a point.  There has been a lot of posturing by digital media businesses. According to Wolff, “The digital media business has been saying ‘we are the future and you are the past.’ That is a powerful and debilitating thing to say. Almost everyone has come to believe that. I walk in the corridors of the media industry and they say digital is the future. I hear that from a lot of print people and they don't know what is going on. So if they say digital is the future, they are probably wrong. Digital came and said ‘We will eat TV’s lunch. We will give out free content, deliver critical mass and more eyeballs and we will sell advertising. That is the TV model and we will take it.’ But in the same period, TV was looking at certain trends such as DVR usage and said ‘Something is happening in TV marketing. We are still a good ad medium but we might look at it in different ways.’”

Digital Is Old School

Wolff said that digital is actually following the TV model from the 1960s and 1970s, “catering in every way to advertisers who pay the bill. It is a ratings and traffic business in a world where the cost of advertising goes ever lower.” Meanwhile, “TV is expanding viewing opportunities and is less dependent on advertising. Digital is more and more confronted with the existential predicament that it is wholly dependent on ads. Think ad blockers….”

He continued, “Facebook and Google are volume sellers of low cost advertising and that is one business that you don't want to be in. But they say they are the future and we are the past. TV, with its myriad of revenue streams, has become incredibly good. It is the new golden age with an extraordinarily sophisticated product. So much so that I would say that here are four words that capture every conversation and that is ‘What are you watching?’ TV has cultural currency which is an extraordinarily valuable currency.”

Measurement is a Monster Problem

So, for Wolff, the marketing model for TV has its strengths as long as TV is flexible and agile and maximizes all possible revenue aspects of its content. But measurement has not caught up to the platforming of this content.  This is where Wolff became circumspect. “Measure-ability has become a monster problem. There is no standard. We live in Nielsen world, which is not right or wrong, because everyone was measured by same standard. But now everyone has measures and there are no standards. It is impossible to know who to believe so we believe nobody.  Now it is not only incredibly complex but also deeply problematic.”

Content Identification is Mandatory, Requires Funding and is Continuous

It is no mean feat to roll out a standardize-able coding system for both programs and ads. Joe Simon, Chief Technology Officer at Univision noted, “All of us have issues with costs and look to automating the work flow. We won't be able to do that without content id.” According to Glenn Goldstein, SVP, Chief Technology Convergence Officer, Viacom, content recognition, “is a mess internally and out in the ecosystem. The efficiency needs to be improved. There are duplicative copies of content with the same ad pitched over and over to MVPDs to put in their pumps. Monetization comes from consistent reports that measure audience engagement. And it needs de-duping.” Stacey Decker, Chief Technology Officer at WGBH, added, “Unfortunately there are silos. I am not sure how we get to a standard but IDER is progress.”

It will only go so far until the money people see its value as Kurt Rao, VP Corporate IT and CTO for Time Warner, concluded, “It is not technology decision. It is a financial decision.” And apparently once coded is not enough. Goldstein added, “Be prepared to re transcode your inventory every few years. It is never going to be transcoded and done.”

Conclusion

There is probably no one in the industry that has all the answers. The future continues to be unscripted but by fortifying our business structure with needed reinforcements – standardized measurement solutions, industry standard program and ad identification codes – we can prepare for any dialogue

This article first appeared in www.Mediapost.com