Through someone else's eyes....

Please note that the following post is written from the viewpoint of the Corporate Broadcasting Executive.  The reports and survey data included below are valid and those organizations providing the data are industry leaders. Readers in the IS/IT and Entertainment fields should recognize the names Forrester, Gartner, and Magid Media Labs.   To boil it down to brass tacks: these are the three companies that act as benchmarks for everything you would require a benchmark for.  Consider them the Ph strip in your Litmus test. While the righteous wrath of disaffected viewers is well placed and these corporations continue to drive apathy where they should be driving enthusiasm there is no magic bullet that is going to cause a behavior changing shift in the corporate culture.  This week’s post is to provide some perspective to those who have had their shows cancelled as well as those who rant about the internet taking away from television. This is what we are up against folks, so pay attention to the data.  Let’s begin. -Begin Corporate Viewpoint Post- The Big Four{& CW} are not going to fold due to show cancellations.  Nor are they going to suffer significant impact from fans ‘switching off’. Let’s discuss why the reporting organizations mentioned above are important to the perception that broadcast networks are not ‘feeling the pain’ as fans wish they would. Leading with Forrester:  April 2007 report: Social Technographics Link 1 and Link 2. Published fifteen months ago, the message is still sound as of this writing.  The first two sentences in the executive summary say everything the casual reader need know: “Many companies approach social computing as a list of technologies to be deployed as needed – a blog here, a podcast there – to achieve a marketing goal.  But a more coherent approach is to start with your target audience and determine what kind of relationship you want to build with them, based on what they are ready for. “ Major corporations don’t understand how to look beyond the immediate need of today and as such limit their ability to provide a viable product.  Airing twelve episodes partnered with ‘the official fan forum’ webpage and a few email blasts does not an immersive experience make.  Then the show is cancelled due to lack of performance driving viewer apathy. Following with Gartner: April 2008 report: Dataquest Insight: Consumers' Value Perception of the Internet Link1 and Link2 This report focuses on use statistics and confirms that ‘most’ people only use the internet for email.  Let me quantify that very generalized statement. Per the Marketing Vox report released on July 03, 2008, 55% of US Adults Have Home Broadband, 10% Use Dialup.  The average age of users is middle age (37-40) or older. The idea that the Net is used primarily by young teenagers or young people is a gross misconception that has been around almost since the start of the Internet. Additional research from the Gartner Group found the average U.S. Internet user is 37.5 years old with an income of $65,000. According to another study Internet users in the United States from age 9 to 18 number 25.5 million while U.S. Internet users age 19 and over number 110.7 million--the younger group is outnumbered by almost five to one by the adults. The bulk majority of adults use the internet for business purposes or to keep in touch via email with family members, hence the ‘most’ people only use the internet for email generalization above. The interesting data relates to younger people, who use the web for a much more immersive experience. "However, Gartner found that there is one demographic group that is bucking the trend, with 13- to 18-year-olds enjoying the most divergent Internet interests, ranging from downloading music and playing games online to blogging and social networks. “Rather than being considered as contrarians, this group should be regarded as the precursors of what is to come,” said Elroy Jopling, research director at Gartner. “The Internet has become a utility for most consumers, who use it for communicating, gathering information and performing financial transactions. However, a new ‘trickle down’ phenomenon, where teenagers lead the evolution of consumer Internet applications, heralds a new era where Internet applications will mimic life — communicating, entertaining, socializing, informing, transactional, either in a fixed location or on the move.” While we know that, in-general, adults make up the substantial portion of both television and internet viewers/users and are the driving demographic behind the consumer dollar (the television advertisers bread and butter), this Gartner study reports the ‘why’ behind my premise for this post: Broadcasting corporations are not motivated to change their current practices since the majority of their viewers have been conditioned to accept the corporation’s behavior as the status quo. As the baby-boom generation ages becomes less of a marketing factor and the current generation of 13-18 year olds become adult consumers, a monumental shift in the way the Big Four {CW} model their business will have to occur: however, for the foreseeable future no shift will occur. Finishing with the MML report just provided to CBS Media and officially released on Monday of this week:  Web streaming doesn't hurt TV viewing. “According to a new report issued by CBS Interactive, less than half of the network's online audience (46%) primarily views their favorite shows online, and most say that the wide availability of these shows across the Internet does not impact their TV viewing. In fact, 35% of the nearly 50,000 streamers surveyed by researcher Magid Media Labs on behalf of CBS reported that they are more likely to view shows on the network as a result of having been exposed to content on the Web.” This report is interesting in that it relates directly to the use of online content driving the use of broadcast content.  As a specific survey, it is the most likely to have skewed data. For example, the statement of, “35% of the nearly 50,000 streamers surveyed by researcher Magid Media Labs on behalf of CBS reported that they are more likely to view shows on the network as a result of having been exposed to content on the Web.” As someone who utilizes a business FiOS connection I have never had a speed issue.  I can download anything in seconds.  Sitting through the choppy, pause ridden episodes on Jericho as they streamed from the CBS website last year is enough to drive me to be a member of that 35%.  Why would I waste the time with chop and bad streaming when I can just plan to watch the show on TV from the comfort of my couch. With that being said, that’s not how the executives at CBS are reading the report.  What they see and have been crowing about on the AP is that the study proves that internet viewers will return to their TVs. This is a misconception, but a legitimate one on their part as they do not understand their customer.  It also demonstrates that while there are some corporate culture concerns about viewer loss due to the internet and schedule changes they aren’t feeling the pain that we (the viewer) would like them to. These research reports do not support a change in corporate culture, especially illustrated in the CBS specific study performed by MML.  If anything, these three reports, spread out over almost three years, confirm the behavior of Television Executives.  Activities Among Those Individuals Online We should continue to see increasing use of the internet for media consumption with a meaningful increase in online advertising budgeting and planning. However, Federal Census Bureau reporting validates Corporate Broadcasting thinking: while internet use has increased, the types of use haven’t  changed all that much since 1997.  [If you read the report with a certain viewpoint already in mind] Looking more specifically at Internet users, e-mail easily outdistances all other online activity (Figure 3-2).  Online users are also connecting to the Internet in large numbers to search for information, whether it is product/services, health, or government services. The Internet is also a source for news and sports for many online users.  To the extent that product/service purchases, online trading, and online banking represent consumers engaged in e-commerce, that activity is fairly strong and growing. Figure 3-2:  Activities of Individuals Online, 2001 As a Percentage of Internet Users, Persons Age 3 + *These online activities surveyed individuals age 15 and over only. **This activity was asked of all respondents. If the response was restricted to individuals enrolled in school, the percentage of Internet users completing school assignments would increase to 77.5 percent. Source: NTIA and ESA, U.S. Department of Commerce, using U.S. Census Bureau Current Population Survey Supplements Whether an Internet user engages in a certain activity varies by some, but not all, demographic factors.  For example, geography has little impact on the selection of activity.  The proportions of Internet users engaged in specific online activities varies little across regions, and was similar regardless of whether the Internet user lived in a rural, urban, or central city area. Household type also showed little, if any, differences.  Gender, age, race, and income, however, do have some relationship with Internet users’ selection of online activities, as discussed below.  Comparing income levels and online activities reveals a general pattern that shows broader use as income increases.  The proportion of Internet users in the highest income level (households earning more than $75,000 a year) exceeds all other income groups in eight of the 16 online categories surveyed.  As demonstrated in Table 3-1, these individuals were more likely to use the Internet to:  search for health services or product information; search for government services or agency information; purchase products or services; search for products and services; bank, trade, or e-mail; or search for news, sports, or weather. Online Activities of Internet Users by Household Family Income, 2007 Percent of Internet Users Age 3 + *Source: NTIA and ESA, U.S. Department of Commerce, using U.S. Census Bureau Current Population Survey Supplements While there have been percentage increases across the board, online viewing of tv/movies hasn't changed significantly.  Even playing online games has only increased 2+%...but those figures really depend on the number of people polled total between 2001 and 2007.  There was a substantial increase in internet users during that six year period, though the percentages didn't vary all that much.  This is the driving heart of my post....even with all that we (the technically savvy internet user) believe occurs online, the last six years show that it just isn't happening.  84% for email only in 2001, 81% for email only in 2007, while TV viewing went from 18.8% in 2001 to 19.1% in 2007. You may be wondering how this post relates to our previous questions of: Do cancellations of a favorite show hurt TV viewing among invested viewers? Will broadcast networks adapt or lose the market? Why must networks change?  Is it simply because we want them too? You’ll have to wait until my next post to see those questions addressed; we needed to talk about the basics first, the 'why' behind the corporate culture driving these show cancellations and the lack of integration with alternate media sources such as the internet and mobile devices.  Now that we have the basics about how Broadcasting see us using the internet we can focus on the questions above to drive change.

Cancellation Fallout

I want to thank Doug for the great post and for joining this discussion. I appreciate the opportunity we have to interact with each other and with our readers.

Doug is correct when he states that this year’s network cancellations were not a result of the Writer’s strike. I believe that cancellations in general highlight the need for continued adaptation and change in this digital media age.

Previously broadcast networks decided when and what viewers could watch. Viewers were limited to the television set, and had a limited number of channels to choose from. Consequently, networks attracted a very large viewing base and advertisements were displayed for the majority of viewers.

This is no longer the case. Cable increased channel and content selection. VCR’s and later DVR’s allowed viewers to skip commercials. Personal computers, internet, youtube, myspace, torrent sites, and mobile devices all further diversified the market.

Suddenly, media consumers can choose what they watch, when they want to watch it, and can do so wherever they choose. The viewer is now free to spend their limited time on what interests them most. As a result, niche audiences and communities develop.

Ivan D. Askwith, in his excellent thesis Television 2.0: Reconceptualizing TV as an Engagement Medium writes,

“Time-shifting and location-shifting technologies make traditional assumptions about the television viewer impossible, since network executives no longer have the power to control when, where, or how audiences consume their programming. Competition for audience attention is more intense than ever, as television shows compete not only with each other, but also with video games, DVDs, and the near-infinite supply of information and entertainment options accessible on the internet.

Thus, if the television industry hopes to survive in a digital, Internet-enabled era, the existing models and practices that govern the television business will require some dramatic change. Even more important, if television executives hope to effect meaningful change, the industry will have to accept that everyone – executives, advertisers, and audiences alike – needs to rethink not only the role of the television business, but the nature of television itself.”

Increased competition in this digital media age necessitates adaptation. The broadcast networks do see this need for change and are continuing to place more and more priority toward “engaging” their viewing audience. However, if the networks are seeking to engage viewers in active participation, I believe they need to rethink cancellations.

Doug is correct in stating that the primary reason networks give for deciding to cancel a show is “A lack of X where X equals advertising dollars or Nielsen stats”. I would further agree that the primary reason cancellations exist is related to underperformance. But I believe that this underperformance is on the part of the networks, not the canceled shows. Networks must perform better in order to remain competitive.

I believe that cancellations exist for at least three main reasons:

1. A failure to realize that it is much more difficult to draw the mass audience of the past.

2. A failure to expand and extend traditional content in a manner that actually brings about active participation and also increases the marketability of that content.

3. A failure to consider the fallout of cancellations in a digital media age (this is the primary topic of this post).

Content which attracts a loyal viewing base is a key opportunity for engagement as well as for advertisement. I believe that the cancellation of this content not only evidences the divide that exists, it actually increases that distance. Rather than networks winning viewers back, they push them further away.

As viewers participate and interact within a story they become immersed into that reality, and they identify with it. The viewer personally identifies with the experience and they have a stake in how the story plays out.

The deeper a viewer is immersed into a show, the more invested they become. The more invested they become, the more they will react negatively to the cancellation of their experience. At that point, it isn't just a show that is being canceled, it is part of their life.

Take for instance someone who immerses themselves into a video game. They spend hours investing themselves into the game and come to have a stake in what happens. They talk about the game with their friends, blog about it, and even make a video remix. They post the remix on youtube and receive primarily positive affirmation for their work.

The gamer loads up the game and eagerly jumps back into the action. After finishing a major subplot they are rewarded with a nice cut scene. Multiple story lines converge together, the plot deepens, and their enthusiasm builds. At this point, the screen fades to black and a message pops up. It reads,

“Sorry, due to factors related to underperformance, your game has been canceled.”

A second message takes its place,

“On the positive side, do you want to try this new game we just developed, but may not finish?”

A third message appears,

“Oh, and by the way, we really want to win you back. We know that there are other game companies who finish the games they start, but really, try out this new game that we might not finish.”

It becomes evident that cancellations have more fallout with active engagement.

This is a fundamental principle that I believe networks would do well to consider. Video game production companies finish and provide adequate closure for the games/stories they start. Cable networks also have a tendency to finish the stories they start. Broadcasting networks need to remember who they are now competing with and who they are competing for. The landscape has changed and they need to rethink cancellations.

On one end of the spectrum is cancellation fallout, at the other end is something I refer to as network loyalty ROI (Return on Investment).

Network loyalty ROI is the idea that active participation and network loyalty will create and foster commitment from viewers. If convergence leads to immersion and product identification and the viewer knows that the network is committed to finish the stories it starts, networks won't have to promote their shows, their viewers will do it for them (Oh, the irony). :)

Network loyalty and commitment to viewers will inevitably lead to profit loss for some shows, no doubt about it. I believe that the networks that will succeed, are those that can provide a long term approach to account for these short term losses and be absolutely committed to finish the stories they start.

This year's cancellations provide a great opportunity for a network to invest in network loyalty ROI. A network could bring back one of the shows they decided to cancel or a network could save one of the canceled shows. My picks are October Road and Moonlight.

Engage the viewers by expanding the media and perhaps even, take a loss in the short term. What you gain is reputation, commitment, loyalty, and fans. This would also draw viewers from other networks. Viewers who want to get behind a company that listens, is committed to its viewers, and is committed to finish out and provide adequate closure to the shows they start.

When networks engage viewers in active participation, loyalty and commitment go hand in hand. Brand/network loyalty will be key. Otherwise, viewers are left with an Ovaltine commercial!

Cancellation fallout and network loyalty ROI are polar opposites. One pushes people away, the other draws them in. Viewers now choose what, when, and where they watch content, will they choose your network or will they go somewhere else (Video game, books, youtube, myspace, Gemini Division, etc., etc., etc.)?

P.S.
Thank you all for the comments. This interaction adds an amount of depth that blog posts alone simply cannot bring about. Engaging in conversation involves us all in the process of bringing about change. As you share your opinions, your insight, and your feelings you are an active participant engaged in a larger community. Whether the reader is a network executive, a writer, a producer, a CEO of an ad company, or a viewer it is our hope that by engaging in this discussion together we can improve our media experience.

Looking Beyond The Box

First I would like to thank Tim for asking me to join in contributing to this blog; with that being said let’s quit dipping that toe in the water and jump in the darn pool.

Favorite TV shows are being canceled, negating the emotional bond built with beloved characters and leaving holes in weekday evenings. These gaping voids are then replaced with banal filler.  Fury over these cancellations has filled fan blog and forum alike and the plaintive cries of “Why!” echo through cyberspace for the good and bad of Prime Time.

Let’s be honest: who really understands the truth of cancellation?  Spend some time reading trade blogs and publications and you’ll find as many reasons as there are shows.  Basically it all relates to underperformance.   A lack of X where X equals advertising dollars or Nielsen stats.

Some shows, like Jericho, Moonlight, and October Road have developed a significant fan base over their limited runs.  Others, like Canterbury’s Law, Chuck, Life, or Men in Trees, didn’t have a chance to really get off the ground before being scrapped for the 2007-2008 Season.  Jericho specifically speaks directly to non-cable networks being out of touch with viewers, especially after the peanuts incident.  At least Chuck and Life will be back for the 2008-2009 season…we hope.

Why are shows with dedicated fans numbering in the millions being removed from the air for pilots that drive as much enthusiasm as a root canal?

The American Auto Industry had a lesson pounded into them in the late 90s: Adapt or lose the market.  If you think I’m incorrect I’d invite you to run down to your local Oldsmobile dealer and check out their 2008 line.”  Broadcast television, or The Big Four [and the CW], are learning that lesson now, but slowly.  I disagree with Tim in this being a case of the Writer’s Strike killing off our favorite shows: it is convergence.  Let me quantify that I loathe buzz-speak so we're not going to path walk a root cause analysis illustrating the paradigm shift between traditional and new entertainment technologies driven by a lack of synergy....blech.

Tim is correct in his postulate that October Road would be well suited for webisode life; but that doesn’t speak directly to how distributors gain ROI [return on investment] for funding these shows.

Using the aforementioned Electric Farm Entertainment property Afterworld as discussed by creator and executive producer Brent V. Friedman, we can see that even the bleeding edge is not without potential profit loss.  All advances usually have limited return on investment at inception, no matter what industry example is used: “Swiffer” didn’t take off until almost a year after product release and that puppy is now one of Proctor and Gamble's major revenue drivers. 

Convergence speaks to a coalescence of tools used to bring entertainment to viewers which drives potential revenue gain.  Anyone who has spent some time talking to oldsters raised in the Golden Days of Radio or has seen A Christmas Story should understand the basic concept of convergence. 

For those who haven’t seen this classic film: Ralphie eagerly awaits Little Orphan Annie’s secret decoding ring message to arrive in his mailbox.  Once the ring has been received he can barely contain himself as he sits through the next Little Orphan Annie radio episode waiting for the “secret decoder message”.  As the announcer reads the encrypted message our protagonist is quivering in excitement only to learn it’s an Ovaltine commercial:  The message reads, “Be sure to drink your Ovaltine.”

First, disbelief, then dark anger cloud Ralphie’s face as he realizes that his secret decoder ring is nothing more than an advertising gimmick.  Having awaited similar items ordered from cereal boxes the disappointment shown in the film rang true to my childhood memories…one of many the things that makes this film a must see. You may be asking yourself, “where is the point?” 

Ralphie’s enthusiasm for that simple plastic decoder ring speaks volumes about the viewer’s emotional need to be a part of the story, no matter how small in part.  We have seen excellent illustrations of this as the internet made Alternate Reality Gaming [ARG] prevalent in the mid-nineties through today. Combined with ARG, viral marketing has become an invaluable tool when combined with television and film properties. So much so that it was a prevalent topic at the 2008 O’Reilly Conference.  Elan Lee’s (Fourth Wall Studios) presentation, “Designing Magnets: Connecting with Audiences in the Wired Age” illustrated this with his “Push, Pull, and Charge, magnet theory.  [Unfortunately no online transcript of that talk exists, so no link folks.]

Combined with viral marketing, ARG has successfully promoted everything from Halo 3 to Year Zero from Trent Reznor’s Nine Inch Nails.  Traditional broadcasting has been slow off the mark in leveraging this new toolset to drive viewer participation and increase the marketability of properties.

One example of the impact of non-utilization is the CBS show Moonlight.  With the prolific amount of vampire ARG games Moonlight had the potential to vault to the Buffy or Angel of this decade yet CBS dropped the ball.  With no additional viral or ARG Moonlight has been taken off the schedule. Not to compare Moonlight directly with anything by Joss Whedon.  Whedon’s television vehicles are usually fan drivers, with the exception of Firefly.  An excellent show with a very loyal fan-base Firefly experienced the same lack of programming care from Sci-Fi that Moonlight received from CBS.

With that being stated we need to quantify that ARG/Viral isn’t a magic bullet.  Most organizations don’t dedicate adequate resources to the online experience which leads to failure. An excellent example of this is the CBS Jericho ARG launched in January of 2008.  Poor design and limited scope left more than the most dedicated fans with too-little-too-late. Bad Robot productions, has done a better job with the combination of entertainment, alternate reality, and viral with Cloverfield and Lost.  NBC Universal’s Heroes series also has a fairly convergent web/reality combination.

Electric Farms blew them out of the water with the ARG for the Webbie-nominated property Afterworld, which combined both real world and ARG as supplements to the daily webisodes.  Clicking through an AW site could lead you to either an ARG information set…or a real world website that was a red herring complimenting the overall storyline of the series.  It was pure genius that drove fans crazy…in a good way.

Modern entertainment requires active participation.  With 500 channels, 100 HD channels, a DVR, and the Web, formulaic sit-and-watch shows aren’t cutting it.  To truly drive return on investment shows have to be supplemented by additional content, be it ARG or real world, and be liquid in scalability.

Non-traditional forms of distribution allow for direct partnering with advertisers and more integrated communication with viewers.  Why just watch when you can participate.  Electric Farm Entertainment’s Afterworld demonstrated a uniqueness in that fan interactions were combined in to the story and ARG lines; something that causes all shows to thrive.  If networks are unable to adapt to the technology and synergy of multi-platform and scalable properties they will continue to lose market share.  In addition, if the Big Four [and the CW] continue to ignore viewers wishes, those viewers will migrate to media outlets that provide both entertainment and active participation instead of the customary couch-potato viewing Prime Time television drives today.

Recently I attended a conference where the Keynote Speaker illustrated the disconnect between ‘corporate think’ and the consumer that applies perfectly to the current environment.  Paraphrasing an excellent lesson, “We thought we knew what the consumer wanted so we stopped listening… [as a result] our market share plummeted in areas we had led the industry in for over twenty years.  Truly a case of believing we knew what was best for the consumer instead of using active listening”.



Networks have to look beyond the box, literally.  Television is now more than something that sits in your living room and it’s a prime time for change.

A New Road

The latest writers’ strike has led many viewers to become further disillusioned with primetime networks and with network programming in general. Then came the cancellations. Many popular shows were cut short. Moonlight, October Road, Men in Trees, Jericho, Blood Ties. The list goes on. There are only so many primetime slots and only so many types of shows that draw the immense viewer base that networks desire. This limiting structure results in cancellations that are not good for the networks, for viewers, or for ad agencies...

Consequently, viewers are turning away from primetime networks and moving toward alternate media sources like Netflix, youtube, and other web based distribution methods. Ratings are down and fewer commercials are being watched on primetime television due to the influence of DVRs. Viewers are looking for original, quality content and are tiring of reality shows. More than ever they are looking for loyalty and desire that networks finish out the shows they start.

While this is a negative picture, I believe that networks can become more competitive, increase viewer satisfaction, and optimize ad effectiveness by adapting new practices in line with the digital media age that we live in. Networks can achieve this by expanding existing media and creating new content for web and mobile distribution. These shows could be produced in such a way that their distribution could be expanded from web/mobile to primetime distribution or vice versa based on popularity.

Pilots for new series could be produced for web/mobile distribution and then ported to primetime television if they proved popular enough. If these shows did not fare well by primetime standards they could then be switched back to web/mobile distribution.

October Road would make a good test case for extending the distribution of an existing content. This is a show that encourages social community and has a loyal fan base. It has brought people to the internet that otherwise wouldn’t be there. It draws a certain audience and keeps them. It is authentic, immersive, moving, and has attracted millions of viewers despite poor marketing and inconsistent product placement.

A third season of October Road could be developed and released on the web and to mobile devices in daily “minisodes.” These minisodes would be limited to about four minutes in length. Brent Friedman of Electric Farm Entertainment (EFE is pioneering the production of media content for web/mobile delivery) estimates that this is the approximate maximum based on current bandwidth technology and availability. Brent further mentions that as bandwidth technology and availability expand, this number would increase (Interview with Brent Friedman - Part III).

October Road is particularly well suited for this process because its episodes break down extremely well into 4 minute segments. These segments could be watched in daily doses or altogether at the end of the week.

This delivery method would allow for more precise and effective ad placement. It would help ad companies target specific people groups and help them to know more precisely who is watching their commercials. It further would allow them to craft commercials in such a way that they do not interrupt the viewer’s experience.

October Road was co-produced by one of the big advertisers (GroupM) and their interests appear to align nicely with web/mobile based distribution. For more information on this, see the article from cnn, "Walk softly and carry a big checkbook".

All of these factors make October Road an ideal candidate for this type of expansion.

Shows expanded or created in this manner would become residual advertising properties, lending themselves toward repeat viewing. These shows could then later be syndicated to other territories or to other networks.

Getting back to the larger picture, network programming currently emphasizes popularity. As a result, original content often ends up being stymied, creativity is often squelched, and tv ends up becoming saturated with “reality” shows and unoriginal remakes.

Web/mobile based delivery and scaling of media has the potential to account for those limitations in a new and very exciting manner. It allows the creation of unprecedented original media content. This would not do away with primetime programming, but instead promises to enhance and complement it. Networks should be accountable to deliver the goods to their viewers and should have a mechanism in place for doing so. Everyone wins. New stories can be told...in their totality!