You will have probably noted by now our frequent tolling of the death bell for the advertising/content firewall. 2008 has turned into an interesting TV year since the writers strike (which put BBB into silence along with all your favorite TV shows) has precipitated the 52-week TV season and the death of the TV “Pilot.” The Networks, desperate to find funding to stay afloat have gone back in time and pulled a page from the birth-of-TV playbook: Just have your advertiser pay for the show, oh and let them come up with the content too:

One example is a new deal with the Liberty Mutual Group insurance company that is centered on a pair of two-hour TV movies to be broadcast under the banner of the company — “Liberty Mutual Presents,” for example.

The movie plots are intended to complement a campaign for Liberty Mutual that was introduced in 2006 by Hill, Holliday, Connors, Cosmopulos in Boston, which carries the theme, “Responsibility. What’s your policy?” The scripts, which Liberty Mutual will help develop, will discuss subjects like taking responsibility for one’s actions and deciding how to do the right thing.

As we approach D-day of the great 2009 digital TV switchover, it looks like shoppers are actually not buying up a bunch of new TVs as expected:

TV sales were expected to slow this year after a couple of big years tied to technology improvements and following the usual surge around the holidays, but some industry watchers suspect sales have slowed even more than anticipated.

First, CBS boss Les Moonves admits: ”I’m a bit concerned about the state of network television generally.” Then NBC-Universal Chief Jeff Zucker admits that the last two years were ”more difficult.” And to add insult to injury, advertisers are convinced that the looming writers strike will permanently harm TV viewership:

The big concern for advertisers is that the broadcast networks - ABC, CBS, NBC, Fox and the CW - will lose even more of their already-shrinking audience.

“If ratings fall by 15, 20 or even 30 percent because we’re getting reruns or shows less appealing to viewers, that’s a big problem,” said one ad buyer. “There are advertisers who are depending on a certain level of ratings points a week.”

The networks are having a hard enough time delivering the viewers they promised advertisers.

They are still doling out millions in so-called “make-goods” - additional ad spots - to compensate advertisers for last year’s ratings shortfall.

Moreover, viewership is down for a lot of returning shows this season, and most new shows have debuted to lackluster ratings and little buzz. 

As if all of this wasn’t bad enough, the FCC is attempting to eliminate the last bastion of media ownership rules.

Don’t say we didn’t warn you.

The San Francisco Chronicle has an amusing piece that simultaneously disputes the death of TV while acknowledging the encroachment of online video:

Conventional wisdom these days has it that television is dying. Like most conventional wisdom, it’s dead wrong.

By almost any measure, television is alive and well. The number of TV households keeps growing - particularly among Latino, African American and Asian Pacific American audiences. Household viewing remains near an all-time high of more than eight hours a day. And television consumption continues to eclipse any other medium by a wide margin; with 90 percent of it still done at home where, on average, there now are more TV sets than people to watch them.

This opening salvo, quoting the enormity of TV watching as part of America’s media landscape, is a typical tactic for those who are rearranging deck chairs on the Titanic.

What they fail to realize is that we are now at the peak of TV. If Americans are already watching eight (!) hours a day, can anyone realistically believe that it will go up to nine hours a day? People are completely maxed out on TV. There is nowhere to go but down.

Remember Apple’s “Hobby” product, the AppleTV? In yet another sign that its not going to stay a hobby for long, Microsoft is finally getting around to copying them: 

Microsoft Corp. and its hardware partners are trying to bridge the divide between home computers and TV sets this holiday season with the release of several “media extenders.” These TV set-top boxes will connect wirelessly to computers running the Home Premium or Ultimate flavors of Windows Vista and enable users to use their TV sets to watch movies, TV shows and Internet video that is stored on their computers.

The problem with “convergence” technologies is that while more of our media are becoming trapped on our computers, do people like grandma really want to spend the time to hook up the finicky things to their TV set? Perhaps one day when computers are as reliable as VCRs (Tivo anyone?) they will. But in an age when you can hook your iPod or even iPhone up to the TV to watch video, why spend so much effort trying to hook up a Windows computer?

Dedicated hardware always wins in the end (even if that dedicated hardware is just a software computer in disguise). 

What happens when the cost of producing web content begins to match or surpass that of traditional TV content?

“This is another sign that the Internet is maturing into a productive distribution channel for professionally produced content,” said Doug Allen, the union’s national executive director.

There is no surer sign in the death-of-TV than the fact that unions will cease to allow pay/benefit distinctions that give favorable (i.e. cheaper) rates to web content. Makes one wonder what the looming Hollywood strikes are really all about, doesn’t it?

Looks like they’re finally catching on…

Some highly anticipated Web sites are being modeled on making the experience of watching video online more like watching television. These sites rely on software that enlarges the interface so that it fills your computer screen X from edge to edge.

[...snip...]

“The early stages of video content on the Internet was a lot of user-generated stuff, stuff like my grandmother and her cat,” said Joost chief executive officer Mike Volpi. “What we’re trying to do is evolve that experience into something that the viewer doesn’t view just out of interest, but actually builds an affinity with that particular programming content.”

[...snip...]

The Internet and television are increasingly being portrayed as on a collision course, the two destined to fuse within 10-20 years when TV could become just another form of high-speed data. But those visions remain relatively far in the future. Online video is still in its infancy, Shapiro said.

What revelations!

1. People prefer high-resolution, high quality video rather than tiny, blurry, postage stamp sized videos.

2. People prefer big-budget, high-production-value content rather than home videos.

3. Computers are just as capable of playing video in a TV-like fashion.

Sounds like they took a time machine into the future! What fucking year is it again? Where are our rocketpacks?

An amusing piece in the WSJ pits Sab Kanaujia, vice president for digital product strategy at NBC Universal, against Steven Starr, co-founder and chairman of Revver. Sab uses statistics to drive his point home:

Forecasts claiming that the new media will swallow traditional TV are grossly overblown. Today, almost half of the total media consumption in the U.S. is on TV—47% of 68 hours/week/user (Source: Veronis-Suhler 2006). Rest is split between radio, recorded music, print, Internet, mobile, etc. Future trends also point to the dominance of TV (48% of users’ media time in 2010).

Our outlook on TV isn’t nearly as optimistic as Mr. Kanaujia’s but his point that no one is making enough money online right now to leave their day jobs is certainly ringing true.

Veoh has started to become popular recently since YouTube and other sites have started to implement automatic copyright filtering (and Veoh does not). But Veoh has also introduced VeohTV, their new online video application that aggregates videos from several popular sites including the traditional broadcast TV networks:

Veoh does not ask for permission to play material from other Web sites, though Mr. Shapiro says he wants to strike advertising-sharing deals with content owners to ensure that shows appear in high-quality video. But Veoh does not think that it needs consent because VeohTV is doing nothing more than playing what is already online, including any commercials shown during the programs.

The networks may disagree. By only offering video, VeohTV omits all the other advertisements on the network sites. For example, people who watched an episode of “Heroes” on NBC.com last week also saw for 40 minutes a banner ad for McDonald’s on the same page. VeohTV users watching the same episode would not see the banner.

This reminds us of a story we wrote about earlier when CBS announced their pre-approved web video syndication network. Once content is released on the internet, loss of control is an inevitability that should be embraced. It’s true that this loss of control means less advertising control (i.e. banners) but having more people see your programming is always better than having less viewers.

Despite large drops in number of viewers and wider adoption of ad-skipping technology, TV networks have been making more money this year because at the end of the day, who else can bring in so many viewers?

Last week, after NBC Universal clinched a $1-billion deal for its television properties with Group M, one of the biggest advertising-buying companies, the floodgates opened in television’s annual ritual known as the “upfront” market. Since then, the networks have been busy processing orders for their time. Fox has been selling time for rates that are nearly 9% higher than last year, and ABC’s prices are up by about 10%.

We can’t help shake the feeling that we’re not being told the whole story here. Are the networks making these premiums simply because media buyers are that desperate? Or is it because the networks have been promising ancillary deals that provide alternatives to traditional 30-second spots that they then bundle and sell to Ad buyers?

Apparently, to no one’s surprise, old people still watch TV:

An annual study by ad buyer Magna Global USA shows the four major networks each had a median age of 40 or more for the first time, meaning half of viewers are older and half younger than that figure.

Fox has crept upward from a median age of 35 in the 2002-03 season to 39 in 2005-06 and increased sharply to age 42 for the season that ended in May.

CBS remains the oldest-skewing network, with a median age of 53, but it has remained the most stable in audience age. ABC’s grew from 46 to 48 in the past year.

And NBC, once a youth magnet with comedies such as Friends, now has a median age of 49, the top end of the 18-to-49 age range most networks target, thanks to the heavy loads of older-skewing Dateline, Deal or No Deal and Law & Order on its schedule.

Maybe if programming gets crappy enough they’ll even start to use P2P networks. Old people are funny.

People are so excited by the impending death of television because finally there will be something interesting to watch unlike the “vast wasteland” that is TV:

Honda will be the sole sponsor of what Sony Pictures Television is calling the Minisode Network, which is scheduled to begin next week. Visitors to the MySpace Web site (my space.com) will be able to watch episodes of 15 vintage Sony series like “Charlie’s Angels,” “The Facts of Life,” “Fantasy Island” and “Who’s the Boss,” edited from their original lengths of 30 or 60 minutes each to an Internet-friendly 4 to 6 minutes.

Why do people hate TV?

1. Boring Content
2. Advertising

We think someone’s missing the big idea here…

In a move that has been repeatedly predicted here long ago, NBC is now inserting commercial content into the show to avoid people who skip commercial breaks with their DVR:

To fight the challenge posed by TiVo, NBC is borrowing a tactic from television’s early days—live commercials.

Tuesday’s broadcast of “The Tonight Show” will air a live skit promoting car satellite-navigation devices made by Garmin International. The skit will air immediately before the show goes to commercial break. There, the message will be reinforced with a taped spot for Garmin taking the first slot in the break.

However, this skit is really only the beginning of the long inevitable slide towards advertiser sponsored programming. The genius of the 30-second spot was that it created a firewall between content producers and advertisers. The content producers were free to create compelling programming and the advertisers were free to create whatever spots they wanted within their allotted time.

Now, the only way to ensure that viewers see the ad is to make the entire show the ad. Remember folks, you heard it here first. Now its time to go watch some Texaco Star Theater.

The inevitable slide continues:

Broadcast television revenue slipped 5.3 percent to $11.7 billion in first quarter, according to a Television Bureau of Advertising analysis of TNS Media Intelligence data. Local broadcast turned in the best performance, down 3 percent to $4.04 billion. Network TV had the toughest quarter, declining 6.5 percent to $6.7 billion. Syndicated TV was down 5.9 percent to $986.7 million.

Another couple of years and it will start snowballing…

Bad idea: repackaging the ol’ “captured on home camera” clip shows as a new-fangled internet-social-media-thingy.

Amateur video will form the basis of the show’s segments, but ABC News correspondents will build news stories and features around video captured on cell phones or digicams and uploaded to a companion Web site.

Remember, blurry and shaky handheld footage is still boring after you watch that tornado caught on camera for the umpteenth time since the 80’s.

Good Idea: Turner seems to have a better idea of what to do with the web, put some good content online for everyone to watch. What a radical idea:

Turner Broadcasting System’s TNT and TBS plan to stream all seven of their combined original summer series on their respective Websites. For the most part, they will be available the morning after they premiere on TV.

[...snip..]

Cable networks typically have had a harder time than their broadcast counterparts in streaming shows online because they have to get both the rights from studios and the go-ahead from cable operators.

[...snip..]

“From the studio side, it’s becoming part of the package of rights you’re willing and able to buy,” says Turner Entertainment Networks President Steve Koonin. “We take the streaming piece very seriously, and when we’re looking to greenlight series, this is something we push with the studios.”

Sounds like Turner has ABC beat on how to take advantage of the net which is a bit of a role-reversal as the article points out about the rights situation. Maybe this is the start of a new trend, it was easy for the public networks to get out of the gate first but now the cable tortoises may beat out the broadcaster’s hares…

In one will likely become a textbook example of a bad quote coming back to haunt you, Richard Parsons adressed the 56th annual National Cable & Telecommunications Association conference in Las Vegas with:

“The Googles of the world, they are the Custer of the modern world. We are the Sioux nation,” Time Warner Inc. Chief Executive Richard Parsons said, referring to the Civil War American general George Custer who was defeated by Native Americans in a battle dubbed “Custer’s Last Stand.”

“They will lose this war if they go to war,” Parsons added, “The notion that the new kids on the block have taken over is a false notion.”

Let us look beyond the fact that Parsons is attempting to portray the world’s media giants as underdogs comparable to Native Americans, which is already ridiculous on its surface. Let’s instead look to his larger message: Custer may have lost his last stand but while they may have won the battle, ‘manifest destiny’ ultimately steamrolled the Sioux nation.

Other than ridiculous statements, it seems that the official old-media stance on Google being a “frenemy” is now morphing into just plain “enemy” (much as we predicted back when the “frenemy” term was first coined).

While yesterday may have depressed our TV friends, Bloomberg (following the journalistic principle of ‘balance’ we’re sure) has made sure to put in a story to cheer them up:

From almost the dawn of television, the networks set standard rates for all advertisers based solely on the popularity of a program. Today, with spending on broadcast TV in decline, they’re scrambling to capture more of the ad dollars aimed at video on the Web.

ABC, Fox, NBC and CBS are telling advertisers they can shape any deal to suit any need, according to ad agency executives. That means companies such as Coca-Cola Co. or Procter & Gamble Co. can choose any combination of advertising - - on TV, over the Internet or on mobile phones—and work out individual terms.

That is a nice spin they are putting on it but begging ad-buyers to work out a custom deal for every single one just smacks of desperation, no? We would love to see what one of these ‘custom deals’ looks like.

It just seems like good ol’ broadcast TV just can’t catch a break these days. Once again, another year has passed and the Upfronts are upon us and they are looking as dismal as ever:

“I don’t think there’s any network chief who can get up there and say they had a successful year,” said an ad buyer, who asked to go unnamed.

In terms of total primetime viewers, ABC is down nearly 13 percent this year, NBC is down almost 11 percent and CBS is down more than 7 percent, according to Nielsen.

Fox is up slightly but even its ratings juggernaut, “American Idol,” has shown weakness recently. News Corp. owns Fox and The Post.

Some of the declines can be attributed to the rise of digital video recorders, or DVRs.

The current live ratings used to negotiate ad rates don’t include any DVR playback, although the major networks and advertisers are trying to address that issue.

We love how they say “some” of the losses can be attributed to the rise of DVRs. How about we attribute “some” of the losses to the internets, video games and bittorrent pirates? That would punch up this story and lift it from the cilched and depressing ad-buyers-upset-at-Upfronts story.

After spending $1.65 Billion for YouTube and then $3 Billion on DoubleClick, Google is most certainly in an acquisitive mood. It comes as no surprise then that while GE is considering selling off its NBC Universal unit that analysts start throwing around the idea of GoogTube snatching it up:

Nicholas Heymann of Prudential Equity Group Inc. in New York said a company such as Google Inc. may be interested in buying NBC Universal as part of its effort to add to its mix of media offerings including YouTube.

Of course later on in the story they include the typical denial:

Google doesn’t comment on ``market rumor or speculation,’’ spokesman Jon Murchinson said in an e-mail.

It’s very doubtful that Google would ever buy NBC. Google is perfectly happy selling advertising to the longtail of web search but Google clearly does not want to get into the content creation business. Content production is an expensive and risky business (the reason GE wants to sell it off in the first place) and Google is accustomed to adding advertising to other people’s content. Other people’s content (much like Other-People’s-Money) is far more fun to deal with.

Broadcast TV is not far off from the Google biz plan. As we’ve explained here before Google can be classified as a media company instead of a mere ‘technology’ company.

We came across this thought-provoking tidbit:

CBS News has announced a partnership with internet TV leader Brightcove, in which the news organization will use Brightcove to syndicate ad-supported video across the Web. Approved Web publishers will be able to embed a CBS News video player onto their site. In addition, Brightcove.com will offer content from CBS News.

Nothing is interesting in hearing yet another broadacaster making a deal to distribute their content online but what is interesting is that they are taking a step backwards technologically. Birghtcove makes an embeddable flash-video player but apparently only “approved web publishers” can embed the video. We can understand that some companies might be nervous about their brand being linked to an unsavory site on the internet but isn’t it silly to stop people from watching your ad-supported content? Which committee thought that was a good idea?

We can hardly wait to endure the tests required to become an ‘approved’ CBS News video ‘publisher.’