The Bundle Begins To Crumble

The past week has been big for the TV business, and the once indivisible bundle of networks that come in pay-TV subscriptions has begun to unravel:

  • ESPN and the NBA hinted that they would launch a streaming service that viewers could subscribe to without a cable, satellite, or telco pay-TV subscription. 
  • HBO wasn't so subtle -- They flat out announced they will launch a standalone HBO Go subscription in 2015.
  • CBS announced a new All Access product, offering current season series not available on other streaming services, plus a library of past episodes and shows.
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New Streaming Service From ESPN And The NBA Rumored: No Cable Subscription Required

This morning, the NBA and ESPN are announcing terms of the renewal of their licensing contract. The numbers are huge, but that's not what caught my eye.

Early reports say that ESPN will launch a streaming service for live games — and viewers won't need a cable or satellite subscription to view them.

This is the first crack in the structure of the television business that has been in place for decades, in which the programmers and MVPDs (multichannel video programming distributors, aka cable, satellite, and telco companies) have a strong co-dependence and why today viewers must authenticate their cable/satellite/telco subscription in order to stream programming from the TV-everywhere app or network app.

Will other networks and programmers follow suit? Will more consumers cut the cord if they can now get their live sports content online?

Stay tuned for more details . . .

Update 11:45 eastern time. 

I just watched the video of the press conference. Adam Silver, commissioner of the NBA, and John Skipper, president of ESPN, both mentioned the new OTT service, but there are scant details and a promise for more later. Mr. Skipper down played the potential impact on pay TV, stating that "the preponderance of the deal is to invest in new products that go on pay TV . . . "and saying ". . . there is no contradiction in continuing to enhance and buttress the current system while building new businesses and new ways to reach fans. We think they are complementary."

Turner President David Levy emphasized that they retained TV-everywhere rights as well as NBA's digital properties, including NBATV, NBA.com, and League Pass, a service that streams games not broadcast.  

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How Software Ate The Advertising Industry

With the Wall Street Journal declaring Ad Week "Programmatic Advertising Week" and Advertising Age's September 29 issue titled "Advertising Age of Automation," it's clear that adtech is all the rage.

This might be a good time for you, gentle reader, to revisit my report from this past February, How Software Is Eating Video Ads And, Soon, TV. (I adapted this title with a tip of the hat to Marc Andreessen!)

Highlights, Day 1, ANA Media Leadership Conference

This year, the Association of National Advertisers is focusing on some really big issues facing the media business. ANA President Bob Liodice's keynote framed them:

  • Measurement: Better measurement can help marketers make better decisions, and it is time for the industry to convene a central body to guide the measurement discussion.
  • Piracy, fraud, and viewability: These issues have led to the erosion of the value of digital media. Marketers, agencies, and publishers must take notice and address these problems.
  • Media transparency: ANA members have told the organization of their concerns about agency trading desks, rebates from media companies to agencies, and programmatic buying. The question is: are agencies and media companies hiding information from marketers, or is this just representative of the new media environment we are living in?
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Who Is The Fairfax Cone Of 21st-Century Marketing?

Or the David Ogilvy . . . or the Bill Bernbach . . . or the Rosser Reeves . . . or even the Lester Wunderman? All of these Mad Men played outsized roles in laying down the rules of advertising and marketing that have dominated the craft for the past half century.

I've been wondering more and more about who among today's marketing leaders will join this pantheon as I see marketing diverging from the tenets I was schooled in during my early ad agency career.

Apparently, Interpublic has decided that Howard Draft isn't among them, since they have removed his name from the door, reverting from Draftfcb to FCB -- or even the original Foote, Cone, Belding name. Their rationale was to simplify the name, but then they go on to say they will still append the geography (FCB Chicago), the specialty (FCB Health), the name of acquired agencies (FCB Inferno), or even "a highly respected creative leader" (FCB Garfinkel). Yeah, that's a lot simpler. And I guess a leader who takes the agency in a new direction and shakes up an entire industry doesn't make the cut. Sorry, Howard.

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Justice Department To Aereo: Drop Dead

Mediapost quotes the Justice Department's filing siding with the broadcasters' argument that Aereo is infringing on their copyright by saying:

“Because [Aereo's] system transmits the same underlying performances to numerous subscribers, the system is clearly infringing.... Although each transmission is ultimately sent only to a single individual, those transmissions are available to any member of the public who is willing to pay the monthly fee.”

“A consumer’s playback of her own lawfully acquired copy of a copyrighted work to herself will ordinarily be a non-infringing private performance, and it may be protected by fair-use principles as well.”

As I've said before, I'm no lawyer, but I'm having trouble following this line of reasoning. This core issue is whether the Aereo stream is a "lawfully acquired copy of a copyrighted work," but if I put an antenna on my house, I lawfully acquire the content in question. This doesn't explain why a single-subscriber antenna in a data center doesn't lawfully acquire the content.

If it hinges on multiple people paying to view the same underlying performance, why didn't Sony lose the Betamax case, since the VCR made the same underlying performances available to anyone who paid the amount to buy the device? What if Aereo changed its model from a monthly fee to purchasing an antenna, and maybe a tiered monthly fee for different amounts of storage?

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Comcast And FreeWheel: Cementing An Addressable Future For TV Ads

In case there was any doubt that TV advertising is going through its biggest evolution since the ascent of the 30-second ad in the 1960s, Comcast's acquisition of video ad platform FreeWheel should lay those doubts to rest.
 
While this $320 million acquisition of a behind-the-scenes ad tech company seemingly pales next to Comcast's splashy $45 billion bid for Time-Warner, it is a more important transaction for the evolution of television advertising. FreeWheel provides essential functionality for the networks to maximize revenue as their advertising inventory splinters across computer, tablet, and smartphone devices as well as cable, Internet, and mobile delivery systems.
 
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Broadcasters To Supreme Court: Save Our Business Model

This article in MediaPost summarizes the broadcasters' case against Aereo this way:

Calling Aereo a “direct assault” on the broadcast industry's business model, a coalition of TV companies indicated in court papers that Aereo's continued existence could mean the end of free over-the-air television.

In my reading of the Constitution, I see neither a right to free TV nor protections for an existing business model (snark over). 

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Digital Is Selling More Soap Than It Gets Credit For: Nielsen Study

This headline comes from Ad Age today.

I'm glad to see more quantification of online ads' impact for branding. But I lament that this kind of story is still headline-worthy. Why is it still so surprising that online advertising is effective and helps sell products?

After all, I wrote about the first Cross Media Optimization Study (XMOS) that documented the brand impact of the lowly banner ad for Dove Nutrium . . . when was that . . . must have been about 2001. And scores more of these studies have come out since. In my research with marketing mix modeling vendors, I hear that digital is readily quantified and has an important role in the mix.

So can we get beyond nonsensical biases about "banner blindness" and acknowledge the reality that ads don't have to be a Cannes-winning video extravaganza to get the message across?

End of rant. I feel better now . . .

Is Aereo About TV Or The Cloud?

Julianne Pepitone's review of the upcoming US Supreme Court case American Broadcasting Companies, Inc. versus Aereo nicely covers the case's implications on two big industries, old and new: television and cloud computing. (P.S. Thanks for the shout-out to me, Julianne!) The potential impact on the TV industry is pretty clear, but the cloud? I'm not a lawyer, but the issue is likely to turn on the difference between the copy being in the cloud or in your home.

In 1984, the Supreme Court upheld the right of individuals to make a recording of a television program for their private viewing in what has become known as the Betamax case. So far, lower courts have used this precedent, in combination with Aereo's clever technical design, to say Aereo is legal. For the Supreme Court to rule against Aereo, it will have to find that some aspect of their model is different from a VCR. 

And there it is: The VCR sits in your living room, while Aereo is in the cloud. No doubt ABC and the broadcast industry will make the case that this is a crucial difference and since Aereo is the entity sitting on these copies of their programming, Aereo is infringing on their copyright. It will be fascinating to see the arguments in detail and see how the Court views them.

Julianne notes in her article:

If the court rules against Aereo, the startup and its supporters warn the ramifications could put other services that use remote, or cloud-based, storage -- Google Drive, Dropbox, remote DVRs and many more -- at risk. Any of those outcomes depend on the scope of the Supreme Court’s decision.

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