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.

In the wake of the WGA Writer’s strike many news sites glommed onto stories regarding new online-TV partnerships like this one just formed with Fox & Yahoo:

Twentieth Television has entered a deal with Internet mega-site Yahoo! to develop a series featuring popular Web videos for syndication that could air next year.

According to sources close to the situation, the potential series, which is in active development by the distributor, would be a fast-paced program featuring the hottest videos from around the Web. Should the project move out of the development stage, it would be offered as a Monday-through-Friday show to stations and launch next fall.

When are TV people going to learn that no one online is going to watch a TV-style “clipshow” of popular web videos? Those who hang out online have already seen them. As for syndicating the same content to be broadcast on television, TV-watchers don’t like watching a bunch of low-res, compressed web videos interrupted by 30-second advertisements.

No one likes clipshows. This isn’t “content creation,” its just exploiting the amateur public videos that don’t require any union staff.

Think of this as “reality tv” for the ‘net from the ‘net.

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?

Sometimes you read two stories in a row...and the BBB blog posting practically writes itself. First read about a new MTV show built around selling deodorant and follow it up by reading this article about a poll that says people think TV is “getting worse”:

Next week, MTV plans to air “The Gamekillers,” a new series created by Unilever to promote Axe antiperspirant. Subtle references to the Axe brand are placed in the show. Facing intensifying competition for advertising dollars from the Web, TV execs “need to please advertisers.”

[...and then from the followup article...]

Some 62% of Americans say television programs are getting worse, says a poll by the Associated Press and AOL Television. More than 70% believe there are too many reality shows. “I’m not entertained by watching people eat spiders,” says Jeanie Peterson, 59, of New Orleans.

Seems like everyone is hating TV these days. If the advertisers are upset, the networks try to please them but then the viewers get upset. The problem here is that at the end of the day, advertisers and audiences are always going to be in conflict: auds want free content and advertisers won’t pay for it if they can’t get their messages in everyone’s face.

The TV-ocalypse is upon us!

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?

TV will have its peak in 2008 as the elections will force politicians to spend billions on advertising (not to mention the Olympics):

Wall Street analysts predict television stations alone could bring in a record $2 billion to $3 billion from the 2008 election cycle, up from $1.6 billion in 2006 and $900 million in 2004.

“Broadcast, cable is still more powerful than ‘Net advertising at this point,” Trippi added. “You’re going to see more broadcast and cable advertising eating up a large part of the message budget.”

2009 will be an interesting year indeed…

In a major victory for open standards, and fast downloads, Adobe is now adopting the h.264 video codec into the latest version of flash:

Adobe today announced the latest version of its near ubiquitous Web video software, Adobe Flash Player 9. It’s codenamed Moviestar, because it includes H.264 standard video support V the same standard deployed in Blu-Ray and HD-DVD high definition video players. In other words, the quality of video has been substantially improved from the previous version of Flash Player 9.

You might be wondering why this is a big deal, but it means that any industry standard tool can be used to generate/play flash videos and that they will look much better and download quicker.

Now if only they could figure out how to manage the bloat that keeps flash from running efficiently…

Adweek notes (with some irony) that gaming has been far more popular than online video for quite a while:

More than one third, or 34 percent of users in the U.S. play games on the Internet at least once per week. That number bests the two most hyped online activities of the past few years, as 29 percent of users watch videos on a weekly basis and just 19 percent visit social networking sites that often, found Parks.

Casual online games are a ‘Killer App’ for advertisers online because people spend so much time playing them. The longer they play, the more ads they will see. Videos are certainly popular but the short clip lengths make it difficult to embed adverts. Ironically, the study cited time spent on social networking sites as competing against gaming but some of the most popular sections of social networking sites are the gaming areas. Just take a look at some of the most popular Facebook apps if you don’t believe us.

Perhaps then, its not surprising that MTV just announced a half-billion dollar online gaming initiative:

MTV Networks plans to invest well over $500 million in video games, seeing the red-hot entertainment category as a major pillar of growth in its goal to reach consumers wherever they spend time.

The two-year investment is part of a global strategy to incorporate games development at the inception of all new programming plans and not as an afterthought, executives say.

Some critics point out that while gaming has the edge today, growth in video watching will eclipse gaming in the future. These critics are missing out on one secret: people are not interested in a majority passive experience in front of their computers. The Internet enables interactivity and games are the ultimate form of interactive entertainment.

Video may rule the livingroom but games dominate on the computer.

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.

Although we hate to link to a press release, we feel its safe to make an exception for this one as it contains the full text of a letter sent from Google to the FCC. In it, Google seems to hint at how it might revolutionize wireless technology in America even more than the iPhone:

In a filing with the FCC on July 9, Google urged the Commission to adopt rules for the auction that ensure that, regardless of who wins the spectrum at auction, consumers’ interests are served. Specifically, Google encouraged the FCC to require the adoption of four types of “open” platforms as part of the license conditions:

* Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;

* Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;

* Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and

* Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

Today, as a sign of Google’s commitment to promoting greater innovation and choices for consumers, CEO Eric Schmidt sent a letter to FCC Chairman Kevin Martin, stating that should the FCC adopt all four license conditions requested above, Google intends to commit a minimum of $4.6 billion to bidding in the upcoming 700 MHz auction.

Bulletpoint #2 to “utilize a handheld communications device” seems the most interesting as rumors have long swirled that Google had a skunkworks dedicated to building some sort of mobile device. Buying some spectrum would allow Google to bypass the traditional byzantine world of obsolete wireless carriers and their aged, incompatible wireless protocols. But is being cash-rich and high-tech darling Google enough to jolt the FCC out of languishing in the status quo?

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…

Recently at the All Things Digital conference, Steve Jobs described Apple as:

We’re in two busineses today, we’ll be very shortly in three business and a hobby. One is our Mac business, second is our music business, third business is the phone business, handsets. And the hobby is Apple TV. The reason I call it a hobby is a lot of people have tried and failed to make it a business.

It seems today that the new hobby is really a fourth business.

A film would cost $2.99 for a 30-day rental. Its digital rights-management software would allow films to be moved from a computer to at least one other device such as the video iPod or iPhone. The software would prevent movies being copied.

One studio executive said the service would “compete against cable companies and anyone else offering VOD into the home”.

It seems Apple is determined to do to movie downloads what it did to music downloads but this would mean that the AppleTV has to become as ubiquitous as the iPod. Perhaps it will be a hobby for a while.