Distribution without a Network? Be your OWN Network! Here’s the Secret.

Content.  Easy Access.  Promotion.  No burying the lede here. 

 

I wrote about “channels” before.  It’s a word that’s outlived its time, unless you’re trying to talk to your great, great grandmother.  Now let’s discuss “networks.”  It’s funny.  Everyone wants to be one.  No one wants to be part of one.  That sort of makes sense…what they’re really saying is that they want to control the distribution of their content and don’t want to relinquish control of it to others.

 

It’s consistent with the evolution of media distribution from bicycling 16mm film around to local stations to “ordering” of content directly from the producer over the web.  That early method worked but there really was no control over the airing except the trust built into the contract.  Even so, a show could get multiple runs, be copied, or get lost in the rotation.  Today anyone with uncensored Internet can watch just about anything when they want.  It’s truly “what you want when you want it” (WYWWYWI or WhyWhyWhy.)

 

Which begs the question, “Why?”  Why a network?  Well, the agencies and the existing networks will argue,

• Networks are the largest aggregator of eyeballs
• They are efficient
• They are easily measured (accurately? Well, that’s another story)
• They are cheap - goes with efficient
• People are used to networks (whatever that means)
• They’re easy to buy (they’ll never tell you that but think about it – about buying time in a few networks rather than tens of thousands of individual pieces of content.  What else would you expect from an agency!  Ask me how I know.  As an early proponent of cable, I got thrown out of my share of offices for suggesting taking positions in cable programming.)

I would counter that with

• People feel their own time is valuable.  Patience went west when the remote control came on the scene.
• It’s become a world of instant gratification.  The WYWWYWI mindset applies to entertainment as well as everything else.  People want it now.
• Viewers are fickle.  The era of someone tuning a specific network and spending their entire night there is gone.  If the show’s bad, they’re outta here.  (Remember hammocking?)  I see broadcast networks still having at it, hoping the lead-in will help sampling of a new show.  I usually see it in a promo as I’m on my way to the Roku.
• Measured?  You want measured?  I can find out who, when, how long…with at least as much reliability as network numbers
• Sure, largest aggregators…but really only on big, live events.  And (you heard it here) when the NFL gets a little more fortitude, they’ll put the Super Bowl on NFL Network as a $50 PPV.  BTW – that won’t be a network.  It’ll be a direct link to their servers.
• Repeating myself from a statement made years ago, No one cares what kind of car brings the pizza.  It’s the pizza – the content – they want.  And just like that pizza, they want it now.

 

By now, you’re screaming back at the screen, “OK, so what’s the secret?” Well, I told you right off.  The secret is you don’t need to be a network. There it is. You surely don’t want to yield control to one but you don’t need to be one, either.  There are 3 simple steps to distribution

 

1. Create content people want
2. Make it easy to access it
3. Tell people about it, including where it is

 

I’m wondering if you’re laughing, maybe shouting, “Duh!” or breaking your knuckles trying to stick your arm into the monitor to grab my neck (you can’t, I’m back about 3 feet from this thing) but, it’s that simple.

 

The devil is in the details, of course.  But he ain’t that mean.

 

First, as far as content people want, you don’t have to appeal to the whole world.  If you want to offer fishing videos, there are plenty of fisherpeople you can offer your wares to.  In fact there are plenty of folks in the “I just want to fish for bass” school (pun intended) to whom some of your content should appeal.

 

Second, make it easy to access.  Devil’s back and he/she thinks he/she’s tightening the screws.  Thing is he/she’s easily defeated here, too, though way too many locations make it so difficult that it isn’t worth it. It’s just that if you have the content, make sure that people can get to it.

• Yeah, your marketing and advertising person said you can put the program 3 clicks, 2 prerolls and an overlay away and people will still come to it.  Is that your guy?  If so, pop him/her with a 2x4.  Wanna cut your views in half, quarter or even by 90 percent?  Put up those barriers.  Go ahead try it.  Or try it with a restaurant – put some “Police Line” barricades in front of the door or do a chalk outline of a body on the sidewalk in front.  Make the door really hard to open.  Lemme know how it works out with customer traffic.
• Get the video playing in one click.  You can add overlays – heck, networks have pretty much abandoned the lower third of the screen anyway – or even some complete commercial interruptions but get viewers to the content NOW.
• Don’t make anyone wade through a bad search engine to find their content.  If you have a few pieces, put them right there on the home page.  Yep.  Thumbnail, description and direct link.  If you have a lot, consider using subdomains to divide your content.  Your prospects go directly to the subdomain and then to the content.  Special bonus:  On the landing page of the subdomain, you can promote all sorts of other content you have.
• Don’t choose some convoluted player.  HTML5 has its own and there are others which can be used easily without forcing the prospective visitor to download one.  A.) Given today’s malware, you’ll lose prospective viewers to the paranoia of a cryptolocker, and, B.) It’s that WYWWYWI thing.  If they have to go through the trouble of downloading a player, they’ll go on to another site.  And be careful with Flash.  How many times do you get angry because you get the, “You’re hosed.  Your version of FLASH cannot play this video.  Please click here for the nightmare of downloading and installing a new version, including having to close this very browser?”

 

So that’s the second point.  Now, number 3.  If you don’t tell the world where your great content is, nobody knows about it.  This is the only place where current networks have an edge.  They can cross promote including full promos and lower-third supers, the ones we love to hate.  But, today, even that isn’t enough.  Some of you may remember doing specials and getting a guarantee of 125 or 150 GRPs on air promotion for it.  But back then, that meant 10 to 20 promos (yeah some were voice over crawl but the promos were there).  Today, it would have to be, well, maybe a hundred or more.  And, as always with networks, you don’t know who you’re really getting.

 

But you can get around that with your own promotion.  Just stop and think how you can reach prospects.  This is Advertising 101, OK?

• You can buy time/space elsewhere.  If you do and you don’t link that directly back to your promoted content, you’re wasting a lot of money.  By “directly,” I mean they click and the content starts playing.
  • “Buying” can be in the form of cross promotion.  You promote other content on your site and those folks promote content on yours.
  • “Buying” can also mean trading.  You can put ads/promos on your advertisers’ sites.  They help drive people to your content where they see ads for the advertiser.
• Use public relations.  Get PR out there about your site, what you’re doing, what the content is, and, include the link.
• Do interviews, make calls.  “Oh yeah? Where?”  You’d be surprised how many people will take your calls/emails and follow up with you.  Putting it kindly, there are plenty of lazy reporters out there who will schedule you for an interview or will take your talking points and build a story.  Saves them work.
• Spend some money.  If you don’t have a promotion budget, set one up.  It’s all the rage.  If your content really is good, the expense will be small to get it found.  If you do it right, you can turn that promotional investment into a lot of visitors.  And if they return or tell others, well, you know that story.  I can’t go through determining where or how because it varies with content.  But if you don’t know who your target is, please, figure that out first.  From there, you can get to the right promotional places.

 

Finally, direct distribution means no intermediary.  Your viewer sees what you want them to see and when they want it.  It’s the ultimate cord cut.  No cable, no antenna needed.  A good web connection and viewers are off to the races – if that’s what they want to watch.  And if you have the content, make it easily accessible, and make sure to tell the world it’s there, you’re going to be part of their viewing mix.

FCC and Cable Set Top Boxes. Big Deal?

My exposure to cable began in college.  Yes, cable was around then.

 

When I moved off campus, we figured out that a Yagi or LP antenna pointed at the [what was then twinlead] cable trunk could get a decent signal. 

Cable was wide open – any subscriber (or Yagi owner) could watch all the channels on the line.  About that time, on the tech side, they switched to coaxial cable, forcing us to cough up our $1.25 a month and, on the program side, the FCC flew in the face of cable’s original raison d'être – providing over-the-air television to homes outside the reception area of any existing station.  This change in philosophy – more like a 180 degree flip – said that, at that point, cable operators were no longer barred from originating programming, they were encouraged (shortly to be required) to do so.

Up to that point, cable was, in fact, an extension of broadcast television stations’ coverage areas.  But as the townies said where I first experienced it, “Not na-more.”  Local operations began originating programming.  Most of it was shows like “Furls and Twirls,” a half-hour weekly feature of the local girls’ pompon group, a painful-to-watch single camera production – and I mean single “edit-in-the” camera production where the titles were inserted by panning to signs held by one of the kids and swish pans got you from one angle to another. 

Down the road, though, Time-Life would try Home Box Office (1972) in Allentown – well, actually Wilkes-Barre, – PA.  Telstar had been up for 10 years but even with the succeeding communications satellites, prices for transponders were beyond reach of all but the biggest companies.  That meant HBO was local. 

Down the road a little farther came the satellite-delivered channels and by 1983, when a battalion of cable rules forced all sorts of changes, these channels were solidly entrenched and looking for local cable systems to carry them. 

All the while, those cable systems were looking for programming that would attract more subscribers…and some system of making sure only subscribers could avail themselves of cable’s products and services. 

Programming was growing.  Bill Rasmussen and Getty had launched ESPN so, if you were, at the time, interested in the local high school swimming championships from Bristol, CT, well, you had reason to subscribe.  Then again, if you liked old movies and reruns, WTBS out of Atlanta run by that Turner guy was perfect. 

 

As the programming grew, so did the price.  Along with that came the impulse to, well, “share” a cable connection where someone paid for it and, after Larry left, they immediately installed splitters and amps feeding neighbors and, in a couple of cases, more distant friends.

 

The cable folks took steps to protect their investment.  They didn’t/don’t want siphoning of their services.  They have to protect the copyright of their content providers. So they created encryption which protected the distributed signals.  They also created tiers of service – packages that particular demos of consumers might pay for.  You can imagine the discussion: 

 

“OK, here’s one we can sell.  Let’s link all the ESPNs, OLN, NFL, NBA and the other sports networks in a tier.”

 

“Sure.  But add in Baby Channel and OWN.”

 

“Why.”

 

“Why?  If you have to ask why, you’re fired.  Harrumph.  If we do that, we can generate more per-subscriber billing.  Good for us even with a fraction of it going back to the content provider.”

 

And that conversation basically brings us to today.  Sure, Michael Powell is in there with a la carte proposals.  And “must-carry” and associated retransmission rules have taken punches from all sides, but, as far as access, cable has evolved the way the cable industry pushed it.

 

About the only “innovation” that could allow for more consumer control of the set top is the commission’s ruling in August of 2011 which ordered cable companies to adapt to CableCARD encryption.  This would allow receiver manufacturers to produce products that – through an inserted CableCARD – could display all of the content provided by a cable company without an additional set top box. 

 

We’re free!  We’re free!  Well, not so fast.  The cable company still controls the CableCARD and your access to their system.  Oh, and receiver manufacturers haven’t adopted CableCARD universally.

 

So, cable users are, by and large, captive to their systems, including the set top boxes which decode and display the selected channels.  Even the DVR’s are integrated for the most part with add-ons like TIVO still depending on the cable subscription to operate and using the CableCARD decoding in order to operate.

 

It’s a bit ironic that a former cable guy, Tom Wheeler  is moving forward with the separation of cable and the set top box.  The intent this go-‘round, put forth on February 18, is not to give the consumer free run of a cable company’s product.  Instead, it is simply to break the stranglehold that the cable systems have on set top boxes and, hopefully, reduce set top box costs to consumers.

 

It’s a good thing, if not an easy one.  Not too many years ago, the cable topology was different.  All of the channels the system supplied appeared at your end of the cable.  The cable box was then programmed to allow reception of the package you paid for.  (Remember when you changed the channel and it was there?  When you changed it?  Not 5 seconds later?) ¹  They were addressable by the cable company and the package could be changed by them.  New systems are constructed so that only the channels you are watching are sent down the line to you.  What a bandwidth savings!  They’re encrypted, of course but you get them.  Nonetheless, it requires some really fancy integration to allow outside products to be employed as the go-between in the cable/receiver chain.

 

It’s back to basics – ensuring that you pay for what you get and that copyrights are protected.  It’s just a little harder to do.  In reality, though, the chip, once developed is only a few cents.  That, and the competition among suppliers, should bring consumer costs for set top boxes way down.

 

Well, then, why would the cable guys want to stop that?  First, take a look at your cable bill.  Are you paying a monthly fee for DVR’s or other set top boxes?  There’s reason number one.  But number two is the big one.  Third-party set top boxes can integrate cable content with Internet and other locally-originated programming.  To cable, this is pulling on that snag in a Banlon® shirt…possibly unraveling the whole sleeve.

 

Here’s how:  The box puts cable product on the same plane as a Hulu, Sony, and other independent and “over-the-top” (OTT) content providers.  If manufacturers make access to any given channel, say Netflix, Amazon, USA Network and CBS equally easy, the wheels start turning in the heads of the cable content providers.  “Why?  Why am I providing content to cable companies?  I can deliver direct to home.”  If I’m CBS, I don’t need affiliates feeding cable systems.  If I’m PBS, I can self-fund.  Seriously, do the math on 5¢ per view of Sesame Street country-wide.

 

Schedules go out the window.  Mozart in the Jungle launched when it’s released and gets watched whenever.  It may be pay-per-view, an all-you-can-eat subscription or sponsored but you make the decision.  I’ll go with my line one more time – no one cares what kind of car brings the pizza.  They care about the pizza.  And people are pretty good at finding the best pizza.  (Ray’s Famous Pizza, 7th Avenue, NYC and Pizano’s Pizza, West Division St., Chicago.   LA?  Sorry. I don’t do sushi pizza.)

 

For cable the ruling’s a nightmare.  Being forced to help enable your competition.  Sorta like CBS and the NFL network.  How do they keep control?  Price cuts?  No- or low-charge set top boxes?  A la carte?

 

For the consumer, once we figure out the boxes, we can have a lot of choices, and the price will probably come down, or at least not rise so quickly.

 

Hey, for promotion departments, it’s a godsend.  Those who figure out how to grow tune-in will rise to the top and there’ll be a lot bigger promotion departments for content providers getting the word out.

 

A quick word about one other group who stands to lose:  Advertisers.  There should be a lot fewer ad units available inside programming.  Maybe that’s wishful thinking but millennials specifically and Internet users in general don’t like the intrusions of standard in-program advertising.  They will certainly not abide by a pay business model that also supports the current level of broadcast/cable of non-program material (16+ minutes per hour). 

 

So look for this:  Advertisers (or agencies) develop their own programming distribution systems.  Note to large packaged goods guy:  We told you to do this in 1985.  You didn’t listen.  Now it’s going to cost you by a factor of 100.  Some other guys were a little smarter and stuck their toes in.  You may have to go big time – free “channels” – with advertising.

 

The available third-party boxes haven’t sold well.  But that’s because they really haven’t been promoted heavily and the cable systems have made their installation unnecessarily complicated.  Combine those reasons with the level of Internet-provided content and it’s understandable that third-party boxes haven’t taken off.  But hang in.  This ruling may help.  Internet-distributed content is on the rise.  And I’m sure there’s at least one entrepreneur out there willing to design a box that meets consumer expectations.  With that and the cooperation of cable operators in attacking their own industry, this might just take off.  Did you read that last sentence?

 

 ¹ To be fair, this is a combination of the request/fulfill and the digitization process

A Look at the Big Game

I think the only reason I sat down to watch the Super Bowl® was so I could write this.  Turns out it was a doggoned good game.  I didn’t have a horse in the race so really didn’t care.

OK, maybe I was a little put off by Richard Sherman.  Hey, man.  When you’re talking to the media, you’re talking to your fans…you know…those folks that plunk down those green pieces of paper for tickets, broadcast packages, advertised products, merchandise and the like.  The green pieces that you stuff in your pocket to the tune of $56,000,000.  So to hell with whatever other issues you have.  Talk to your fans.

I won’t recount the game except for a couple of comments.  First, if New England hadn’t won, Brady would probably have been run out of town for throwing the first half interceptions.  Second, the fight following the second-last play undid all of the “PSAs” (quotes around the term because they weren’t public service announcements as much as the NFL trying to trowel over its problems) they ran the entire night.

Halftime?  Interesting.  Katy Perry?  OK.  Execution?  Good but no Chinese Olympics Opening Ceremonies.  Let’s call it superficial and leave it at that.

As for the commercials, well, anyone remember Charlie Harper’s line in Two and a Half Men when he’s trying to explain why the commercial music business is in the dumper.  It was something along the lines of, “Hey, why should someone hire me to do music for a new tampon commercial when they can just go buy ‘Stuck in the Middle with You?’”  The game’s commercials helped prove his theory.  Seemed like I was listening to an oldies station during the breaks as one spot after another relied upon the nostalgia of ‘60s music to create some sort of favorable emotion.

In support of some of my earlier blogs, anyone else notice the number of times the NFL Network was mentioned, promoted, or credited?  Like I say, in a couple of years, who’s gonna need a “channel”?

Beyond that, nothing blew my socks off.  Not as many “reveal” spots trying to hide their actual sponsorship till the last two or three seconds so someone must have read my blog from a past Super Bowl.  Maybe the Doritos Flying Pig moved the needle a bit if you forgive the mediocre effects but the promos for The Blacklist scored higher in my mind than any of the spots.  I’m just sayin’.

And all you newcomers, hoping to stake your company’s claim to fame by blowing 2 to 4 million dollars, you didn’t.  None of you.  But they may have some parting gifts for you.  Maybe a ballpoint pen or Super Bowl XLIX mug or something.

How's that Cable / Satellite Bill Doin'?

When my bill for receiving WCPO, WCHS and WSAZ went from $2.00 to $2.25, I was ready to throw in the towel.  Where would it stop.  Fact is there really wasn’t another way to get a signal in that hollow.

So, today, does it bother me that folks paying between $100 and $200 a month are about to get a 5+ percent kick in their backside?  Well, yes.  Of course.  I’m one of them. 

First, full disclosure:  When someone says it’s not about the money, it’s about the money.  So with that out of the way, I’ll go on to say that it really isn’t about the money (see immediately above) but the fact that these guys’ timing is pretty poor.

A look at the landscape:  We still have over-the-air (OTA) television.  We have access to cable, to satellite and to copper-delivered entertainment.  Beyond that, we have IPTV and OTT.  When I talk about IPTV, I mean any system that delivers content using Internet Protocol.  This could be via an infrastructure provider, e.g., a cable provider using Internet Protocol to deliver select content…VOD and live events. 

It also could be via the Internet though that has come to be called “OTT” or Over-the-Top, a term that has become synonymous with Internet delivery.  But it gets narrowed a bit in that it’s usually meant to mean content that doesn’t pass over cable or satellite or copper based services.

Confusing?  You bet.  After all, content comes over cable.  Some people have Internet delivered via cable.  But the nuance is that OTT is delivered via the Internet, itself.  If your cable company provides your Internet, the OTT content comes directly to you via Internet without the cable company “handling” it.¹

Let’s throw another acronym into the mix:  MVPD.  Multichannel Video Programming Distributor.  These are the guys who distribute more than one program source at a time – the cable companies, satellite organizations and telcos who deliver the 30 to 3000 programs to your home

They’re different from the OTT guys like NetFlix and Hulu.  Both of these deliver content to you via the web directly.  Many others are getting into OTT.  As anyone who enjoys multiple types of entertainment knows, all of these acronyms have the nerve to charge something for their service.  Like their employees have to eat or something.

I’ve written a couple of times in the past about distribution and channels (see the blog just below).  Every time I do it is with attention to ever-expanding sources.  And now, the sources are starting to step on one another. 

While it may not have been the first such situation, but arguably the most famous is Sony and the BetaMax.  Sony hardware got a great product to market.  Sony software started yelping.  Now we see cable owning broadcast, broadcast owning cable, most of them providing some type of Internet, satellite, and the Internet, itself, where entrepreneurs are desperately trying to distribute all the other guys’ stuff and make a buck at it.  And it’s like a car keys party of the ‘70’s (so I’ve heard).  Who knows who’s pairing up with whom next. 

The diversity and mix makes it a regulatory free-for-all and it’s dangerous to jump in with laws and rules without realizing that the arena is one big Pillsbury Dough Boy.  You push in over here; something’s going pop out over there.  Unintended consequences hiding in the weeds everywhere and if there’s one thing the government isn’t good at, it’s planning for unintended consequences.  Yeah, oxymoronic, but you get the point.

Speaking of point, let me get to mine, finally.  Rates are going up again.  The primary driver is sports programming.  ESPN is the biggest culprit.  Here’s The Wall Street Journal’s chart developed from SNL Kagan’s numbers.

Secondary Source:  http://blogs.wsj.com/numbers/how-much-cable-subscribers-pay-per-channel-1626/

That’s 2014.  The producers are back seeking another bump.  It’s that 5+ percent I mentioned at the top.  Now, according to Kagan, program costs were up 9.1 percent in 2013 and 8.1 percent in 2014.  I’m saying 5+ percent in 2015 because it’s safe and it’s what some in the industry think will be close to accurate.  Kagan says 8.8 percent but that’s just one source. 

That begs the big question.  How much longer will people pay for things they don’t use?  I know that when I order Buffalo wings I get both ranch and bleu cheese dips.  The bleu cheese gets dumped.  Should I be able to buy the wings for 20¢ less by telling them to keep the bleu?  I don’t use the rear power outlet in the car.  Should I be able to buy it without?

You know where I’m going.  I’m paying for hundreds of channels and watching only a few.  Stop charging me for the bleu cheese and the power outlet. 

I’m not the only one.  Here’s Nielsen’s evaluation:

http://www.nielsen.com/us/en/insights/news/2014/changing-channels-americans-view-just-17-channels-despite-record-number-to-choose-from.html    (2014 not yet available)

Looks like we’re all paying for a lot more than we’re using. 

When does that stop?  A number of factors come into play.  First:  Channels (wrote about it last time).  When folks go to a provider directly, voila.  They’ll pay.  But they’ll be the only ones paying.  You think content providers aren’t scared of this?  No?  Think again.  Second, when subscribers start demanding a la carte from operators.  Some folks equate tiers with a la carte.  Not the case. 

The tiers are stacked to pack in channels you don’t necessarily want with those you do – amortizing the per-sub costs for the operator.  A la carte will mean you choose – not from column A or B but from the entire list.  It’ll have the about the same effect as going directly to the provider.  Maybe better since Disney may well try to package all the Disney/ABC/ESPN/History/A&E/so on networks for one price.  And it’ll be up to the consumer to decide. 

The third factor is third party OTT where a Hulu manages separate streams for content providers.  Oh, wait.  Who owns about a third of Hulu?  Right.  That would be Disney.

The important thing is that some sort of a la carte is heading our way.  Most of the financial guys on the supplier side don’t see it.  They don’t want to.  Think of the dominoes that will fall.  With sports, if non-sports folks aren’t subsidizing the sports lovers with their cable/satellite bills, what happens to rights fees?  And, if rights fees fall, what happens to pro sports leagues?  And if the leagues have their revenues cut, where do those poor players turn?

Does it matter?

As an example, Thursday Night Football moves from CBS to The NFL Network after a few games.  CBS continues to produce – and to weaken its Thursday night lineup with non-sports fans – the games for the NFL.  And how long does that go on?  When does the NFL really start producing their own games, on their own budget and distribute directly at a profit.  Are there enough Thursday Night Football fans around willing to make it profitable for the NFL?

Does that matter?

If, tomorrow, the Lorre Channel launches as the only outlet for all of Chuck Lorre Productions’ fare, are CBS and all those rerunning the series in trouble?²  

Tomorrow?  No.  Next Tuesday?  Keep driving those prices up and maybe.  At a buck a show, I can watch 140 programs a month that I want and come out better than I am now.

¹ Watch out here!  That pesky “net neutrality” provision could change this completely.

² Yeah, yeah, I know, existing contracts, blah, blah.  It’s an example.