Monday, April 5, 2010

TV’s Missed Opportunity

video game night, invasion from space #2

Right now people are watching more premium content than ever, take Net Flix, Hulu, iTunes/ Amazon and then pile on illegal downloading and you have more eyes than ever before. This is an opportunity for premium content producers, e.g. TV networks, movie studios, but unfortunately it's not being framed that way. The business problem is how to monetize those eyeballs. And, while ad rates remain low on sites like Hulu it seems that pay walls are the only answer.

I'd argue that there is a better way.

First, I think sites like Hulu need to get more research on how their ads are watched. I've found that most people I know settle in to watch shows on Hulu, and the very same people that fast-forward on their DVRs are watching the two minute ads on Hulu. Further, most audiences accept that watching ads with your TV show is part of the deal, and most viewers are down with watching them.

Second, premium content needs a business model that's a little more creative. And, as content becomes increasingly detached from specific channels, there should be a greater focus on attaching ads and building revenue on the content itself.

For example, allowing for free downloads with commercial breaks built in, perhaps they could even update periodically? Or give users an interactive experience that unlocks programming via engaging with brands. We could create a whole new type of ad format/ interactive experience for online viewing--like movie trailers (very much enjoyed) make online ads part of the whole viewing experience. Lastly, could we reach out to people who have already downloaded illegally, asking them to register their copies if they enjoy the shows, or to watch ads to help support them?

Finally, people care a great deal about their shows. They feel a sense of personal ownership with the programs they love, and beyond just wanting free programming would also seek to preserve it if given a chance or a way to show their support.

My point is this. Consumption is up, way up. Along with these new habits people also have greater emotional investments in the programs and movies they watch. But, the more the industry denies access the more eyeballs they lose to illegal consumption. Instead, they need to harness the new passion for premium content people have and get creative about making money with all those eyeballs, whatever screen they are on.

Update: A great piece by Carol Phillips on Millennial Marketing cites my article on this topic recently published by TNGG.