In a recent New York Times article, Time Warner Cable was said to be thinking about dumping about 20 channels provided by media giant Viacom. Apparently, Viacom wants Time Warner to charge 23 cents more for every customer subscribed to these 20 channels. Time Warner refuses, saying that the increase is an outrage and is a bad business move, especially in a bad economy. And since Time Warner is dropping the channels to save their customers some cash, the kiddies will have to look elsewhere to get their Dora and Spongebob fix. In a smart move, Time Warner will be sending out a notice to all customers stating:
- Where customers can go online to view the content.
- How to hook a PC up to a TV
The reason behind Viacom’s decision is that fewer advertisers are willing to pay to have their ads on the network’s programs. This is because fewer and fewer people are willing to pay for high costing cable and satellite connections. I personally canceled my cable subscription about 7 months ago because it was simply too expensive for the amount of television I watch. Instead, I use my existing subscription to Netflix to instantly stream both movies and TV shows straight to my TV via an Xbox.
I also visit sites like Hulu.com, TheWB.com, and Joost.com to stream even more free movies and shows. What’s even better is that I can watch whatever show I want, whenever I want. I don’t have to worry about missing any of my favorite shows, and I don’t have to buy an expensive DVR to record anything. It’s all on demand.
So what’s it all mean? Advertisers are going to start shifting their media dollars to these online video sites in lieu of traditional broadcast. And why wouldn’t they? Since many of these sites allow users to create profiles, advertisers will know exactly who is watching (name, age, gender), where they are watching (down to the exact street), when they watch, and all kinds of other information. Additionally, advertisers can directly interact with consumers, driving them immediately to a website with more information. There is no drop-off rate for the call-to-action (such as visiting a website) because watchers only have to click. And watchers are already engaged with the ad because it is usually very targeted. Also, since there are so few ads, people are more likely to pay attention. In contrast, traditional television watchers have to:
- Actively acknowledge the ad in an array of ad clutter
- Actually go to a computer, that is away from the TV
- Remember the URL of the site
Each step is a huge expectation for the consumer with drop-offs at each step, especially in an age of instant gratification from the internet.
In much the same way newspapers are failing to properly leverage the web as a compliment rather than a competitor, TV networks and companies are falling behind because of the lack of integration with online streaming video. The video sites are here to stay as far as I can see. So networks need to get on the bandwagon, follow audience trends, and start offering combo packages for advertisers to hit both traditional and new media outlets.
by Josh Gibbs, New Media Development
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wevegotideas
Chris Griffin
Josh Gibbs
Bill Cokas
Jenn Soloway
This seems like a bit of a spiteful attack that may very well backfire on the networks. My family was one of the last in the neighborhood to get a DVR, which I view as a stepping stone between live network TV and true on-demand media. We can watch what we want, when we want and skim past commercials, but we are still dependent on network content to fill the pipeline. Taking some of our favorite shows out of the lineup may be just the impetus we need to dump network programming and join the growing throng of on-demanders.
I think there is still room for advertising in an on-demand society, but the ability has long existed to more accurately target ads and to use more unobtrusive methods like product tie-ins and program sponsorship.
Additionally, small TARGETED ad placements in on-demand content could also take the place of the ridiculously intrusive self-promotion footers that can at times obscure fully 1/4 of the viewing area on network programming. (Ooh, those obnoxious self-serving promos fill me with rage!) I saw examples of this in the movie The Truman Show 10 years ago and am still waiting for life to imitate art.
I think it’s definitely a smart move by TWC. I’ve also downgraded my cable since it is expensive and I just don’t watch that many channels. I wish I could just pick and choose a few channels, but my guess is that it won’t happen for a while, since cable companies would probably lose too much money offering an “a la carte” service. I also think that eventually I’ll completely move over to watching content online, but if there are going to be tons of large and obnoxious advertisements, then I might hold off for a while. I’m perfectly happy waiting for shows to come out on DVD and then watch them whenever I want to later.
Time Warner is turning its back on an opportunity to charge its customers more money? Are pigs taking wing outside my window!?