The Rumored“Death of TV” Is Really About Transforming Brand Identity and Advertising
It’s not news to say that the Internet is cluttered with fake information. Everybody knows the web is stuffed full of pernicious nonsense.
Consider just one example: the death of TV. This trope been repeated in the blogosphere for more than a decade. It is admirably tenacious and somewhat harmful, but it’s not true. Not even close. TV is booming.
What’s actually happening in the TV industry today is much more interesting than the phony narrative about the death of the medium. And the truth has significant implications for the future of brand-building, mass marketing and product identity. Let’s dive in.
In my previous post in this series, I wrote about how brand advertising funded the worldwide expansion of television channels and the proliferation of commercial media.
In this piece, I will describe how that process, pushed to the utmost extreme, has now reversed itself. The ad-supported commercial media sphere is imploding. Too much of a good thing eventually becomes a bad thing.
Let’s begin by setting the record straight: the TV industry is not dying. It is in rude health. TV Production is booming like never before. Distribution channels are proliferating. Record amounts of money are being made. Competition from Netflix is fostering genuine innovation. And 4K TV sets are affordable (finally). Improvements in hardware, distribution, programming and profits. Plenty of signs of life!
Exhibit A of TV’s current prosperity is the sustained increase in the number of scripted TV shows. The most expensive TV format — by far — is the scripted series (that is, comedies and dramas with real actors, unlike reality TV, which features amateurs and wannabes engaged in weird competitions and dysfunctional relationships).
Hollywood studios are currently cranking out significantly more scripted fare than ever before in history. Today there are more than 500 scripted TV series in production in the US: that surpasses last year’s record of 495 shows in production, which beat the previous record of 487 in 2017 and so on.
The budgets are higher, too. A single episode of reigning champion Game of Thrones clocks in at a whopping $15 million. That’s a movie-sized budget for an hour of TV. Similarly, Netflix is paying comedians $20 million for two hours of standup comedy. Budgets are not going up for every show, but on the high end, they are breaking records.
Clearly, TV is not dying. But TV is most certainly evolving. Given the proliferation of digital devices and the millions of apps and games and VR and other digital novelties that compete for our attention, it should come as no surprise that television requires a total makeover just to keep us entranced.
This is not just a matter of shoveling more money at more shows. There are significant structural changes underway that will reconfigure the business model of television. These changes have created chaos for the brand marketers whose copious ad dollars funded the buildout of thousands of commercial TV networks worldwide.
Consider, for instance, the changes now underway in scheduling. For sixty years, the TV industry controlled when and where we could watch shows, and when and where we were exposed to advertising.
During the past two decades, however, schedule control has shifted towards consumers, weakening the programmers’ vice-like grip on our attention. If the programmer cannot control when we see the show, then the programmer also loses control over when (and whether) we see the adverts, too.
FROM EMPOWERED TO ENTITLED
Smartphones have conditioned audiences everywhere to instant response and instant gratification. A world ruled by mobile phones is an on-demand world, in which everything you desire is available at just one touch of the screen.
Smartphone users have evolved from empowered to entitled. They now expect to watch whatever they want whenever they want on the device of their choosing. Viewers can also decide whether to watch ads or to skip them, and they can time-shift shows by a week or a whole season or years. The new TV is timeless, schedule-free and placeless.
This breaks the fundamental economic model of aggregating audience attention and selling it as a block to advertisers. That durable monetization tactic is over and done now, but that doesn’t necessarily spell death for TV as an industry.
From the consumer viewpoint, these changes represent such a massive improvement over the past that nobody will ever voluntarily choose to return to tuning in to primetime TV to watch a show in a linear broadcast schedule.
In a few years, I imagine it will be quite difficult to explain to our children what it was like when the whole nation had to sit down at the same time to watch a primetime episode or the news. Do you remember when the whole country stopped everything to tune into Dallas or Twin Peaks? It wasn’t so long ago, but today in 2019 this notion of “appointment viewing” seems quaint . It is an artifact of a bygone era. We now routinely time-shift live events like the Academy Awards and the Superbowl, just to skip over the ads and the boring bits.
Our smartphones have trained us to expect everything on demand at the touch of a glowing icon, and TV has no choice but to bend the knee.
The process of time-shifting started in the 1980s with VCRs, but tape was cumbersome and most people were too lazy to deal with the blinking twelve on the front of the VCR. Time-shifting caught on in earnest with the widespread adoption of DVRs in the 1990s, when the price of hard drives plummeted and replaced videotape as the storage medium of choice. This process accelerated in the early 2000s as cable and satellite companies upgraded their set top boxes to include DVR functionality. Suddenly everybody got the habit of skipping ads and fast-forwarding through shows. But that was just the beginning of a major shift in consumer behavior.
The advent of streaming video-on-demand services like Netflix and YouTube in the late 2000s placed full control over the schedule in the hands of consumers. Once you go fully on-demand, it’s nearly impossible to go back. After you’ve spent a weekend binge-watching Stranger Things, it’s excruciating to sit through an hour of primetime TV riddled with commercial breaks every four or five minutes. The experience is maddening.
HOW TV COMMERCIALS RUINED STORYTELLING
Not just for audiences: screenwriters also hate the frequent commercial breaks because these interruptions force them to degrade the narrative. Screenwriters are obliged to shoehorn a cheesy cliffhanger every three minutes into the script of a primetime broadcast drama. And sometimes they need to insert a mini-recap, just to reorient the audience after the commercial break. That’s why shows designed for broadcast TV seem so contrived, so forced, so unnaturally breathless. Ad breaks have degraded storytelling on primetime broadcast television. Narratives are compressed, dialog is cut, and time to develop rounded characters is removed. What’s left is glitzy, quick-cutting and utterly superficial.
In their quest to jam ever-more commercials into an hour, TV networks discovered other ways to degrade the experience, including surreptitiously speeding up episodes and running commercials on top of the closing credits for the show.
These changes to ad-supported television explain, in part, why ad-free programming on HBO, Showtime and Netflix strikes audiences as so compelling and so satisfying. It’s not just that there are no annoying commercial breaks: the program itself is qualitatively better, too. If the director is not obliged to stop the narrative every three or four minutes for a commercial break, and that means she can linger longer on a scene, thereby allowing the interplay of dialog, reaction and expression between characters to build slowly and credibly. The result: much richer characters with more nuanced relationships and subtler plot development. There’s no pressure to drive relentlessly towards another cliff-hanger every five minutes, so the plot feels less contrived.
The lack of commercial breaks is the main reason why series like Game of Thrones feel more like a 12 hour movie than a mere TV show. It’s not uncommon for a single scene in GoT to last for minutes: on broadcast TV, scenes rarely last more than a minute. Most viewers don’t dwell on that fact consciously: they just know that GoT “feels” better because the scenes are not rushed, and each episode is more engrossing because the spell is not broken every five minutes with a noisy commercial or six.
LET’S GO BACK TO THE BEGINNING.
We made a bad bargain. Well, not us, exactly. We did not make the bargain ourselves. We inherited it.
Blame grandpa. Our grandparents (or their parents, depending upon your age) made a deal with commercial broadcasters in the early days of national networks.
The broadcasters said: give us your undivided attention and we’ll give you free entertainment that comes with a sponsor message. Fair enough, said grandpa, and he plunked down a few hundred bucks for a television set.
And so began a succession of single-sponsor programs with name-in-title airing throughout the 1950s: the Colgate Comedy Hour, the Schlitz Playhouse of Stars, Goodyear Television Playhouse, The Pat Boone Chevy Showroom, The Pepsi-Cola Playhouse, and the Bell Telephone Hour.
But that deal did not hold. The broadcasters kept tweaking the terms of their deal with the audience. (This may remind some readers of the way Facebook keeps changing their coercive Terms of Service and never in your favor).
By the 1960s, the single-sponsor logo gave way to blocks of multiple commercials from different brands. That gave the network more control over the program and less dependence upon a single advertiser. Good for them, but not for you. From that point onward, the number of commercial breaks, and the number of commercials within each pod, increased until we arrived at the currently unwatchable status quo on broadcast television.
During our lifetime, the terms of that deal got worse and worse because broadcasters got greedier and greedier, adding ever more commercial breaks and thereby degrading the programming.
And now the deal that our grandparents made has broken down completely, because, thanks to technology, we can opt out. We have other alternatives. Just as the advent of MP3s and file-sharing broke the recording industry’s ability to extract billions of dollars from consumers for collections of music inscribed on overpriced CDs, new technology has also broken the grip of TV broadcasters, too.
Collectively, audiences have rejected the bad bargain made by our grandparents. We’ve each arrived at the conclusion that our time, and our attention, is worth more than the free programming. We’d rather pay for programming that’s available on demand via Netflix or another OTT streaming service, or we’ll pay for a timeshifting device. Anything rather than submit to the ad-lousy broadcast TV schedule.
OVEREXPOSURE AS A STRATEGY.
In the TV business, any idea that works reasonably well is doomed to overexposure. Every promising novelty will inevitably be beaten to death by repetition, ripoffs, copycats and spinoffs. This represents a kind of evolution, too, but it might be more accurate to describe it as devolution because the spinoffs are rarely an improvement on the original.
TV is awash in lookalike shows that sprang from once-fresh innovations. These shows exist merely to fill hours in a linear broadcast schedule. We just lived through two decades of real housewives scheming in various cities, hundreds of sitcoms that feature a wiseass kid punking clueless parents, an endless procession of dysfunctional chefs and labile decorators and volatile designers, dozens of shopworn vampire romances, multiple ice road truckers and plenty of pregnant teenagers.
Reality TV, which accounts for roughly half of the hours on television, suffers from a chronic illness, a kind of dramatic Pygmalion complex: it keeps turning unknown people with personality disorders into world famous celebrities. This never ends well.
And so it comes as no surprise that the TV industry also beat brand advertising to death. Over-monetization was inevitable. When commercial TV debuted in mid-1940s, there were no commercial breaks, just a brief mention of the sponsor. Then commercial breaks were introduced, and soon enough, two commercial breaks an hour weren’t nearly enough to satisfy the bloated networks. How about four? Five? Six?
Today on Viacom channels, one of every four minutes is an advertisement. On most channels, it’s one minute of ads for every five minutes of programming.
The number of commercials is increasing even as the audience is declining. It is almost as if the broadcasters are deliberately trying to drive viewers away.
Even broadcasters agree there are too many commercials.
The proliferation of commercials on TV is a byproduct of an even bigger trend, which is that for decades, television programming has been moving from one-size-fits-all mass programming to ever-narrower niche programming.
The first cable channels in the 1970s pioneered a path towards the explosion of cable TV channels in the 1980s. Satellite TV launches in the late 80s and 1990s offered even greater capacity and more channels, then cable converted to digital. The channel bundle morphed from a dozen to thirty five to 500 channels in a twenty year span.
This gave advertisers a way to target offers to ever narrower audience segments. Cable TV was a means to support the proliferation of SKUs in the ever-expanding retail superstores and big box stores that was underway across the country. One fed the other: an ever-increasing number of TV channels was fed by an ever-increasing number of new products aiming at an ever-narrower definition of a target audience. More channels meant more places to show more products.
NARROWCASTING AND PRECISION ADVERTISING
The introduction of the commercial World Wide Web around 1996 gave advertisers even more ways to reach narrow audiences with even better precision. Online marketing tools track audience behavior in real time. Empirically accurate digital media metrics are far superior to the fuzzy estimates and overnight ratings that broadcast TV can provide.
The fact that the internet runs on a two-way telecommunication network instead of one-way broadcasting system meant that advertisers could collect precise data about audience behavior in real time, and respond by making immediate changes to their campaign strategy.
The leading video-on-demand services like Amazon Prime and Netflix conform to this longterm trend of offering greater choice to suit narrower preference. But they don’t show advertising. The next wave of VOD services probably will. As every broadcaster and cable channel mimics Netflix by launching their own version of an on-demand streaming video service, they’ll find that consumers have already committed their budget for paid programming.
There are already 200 OTT video services available in the US, and hundreds more around the world. But this proliferation is about to crash into a hard barrier. There’s a finite limit to the amount of money that any single household can afford to spend on streaming video. Inevitably the latecomers to OTT will have no choice but to offer much lower subscription fees than Netflix. And some OTT services will be completely free of charge to end users. These services will rely on advertising.
But these won’t be your grandmother’s TV commercials. The newest OTT video services deliver precision advertising aimed at a narrow segment. The commercials you see on ad-supported VOD could be very different from the commercials that other people see.
Ultimately it is this ability to cater to advertisers’ demands for ever greater precision targeting that has enabled digital media to surpass broadcast media and print media in advertising dollars, a seminal event in media history that happened earlier this year. One-way broadcasting simply could not compete with the superior targeting and data on the two-way digital network.
Audiences, however, seem to be attempting to flee from intrusive advertising, retreating to subscription services that don’t show any ads and don’t share user data with marketers. Today, advertising supported VOD services like Pluto TV are nowhere near as popular as subscription-only advertising-free OTT services. Audiences have woken up to the fact that their attention and time is valuable, and they are willing to pay money to preserve them.
To hammer home the point, television is not dying. Moreover, advertising is not dying. But the venerable interruption advertising model that defined the TV experience for more than half a century is definitely going through a wrenching change. And this process far from over.
The current situation is similar to an arms race after a truce has failed. Everyone is racing to take up new weapons. Audiences are installing ad blockers and retreating into ad-free subscription content zones; meanwhile advertisers have escalated to ever-more precise marketing tools to track audiences as they migrate from screen to screen. Personalized ads, dynamically inserted into video streams, are just the latest advance in this arms race.
THE PRODUCT IS THE NEW CHANNEL
For brand marketers, who have traditionally depended upon broad exposure to massive numbers of people to establish product identity and build awareness, the decline of free-to-air commercial-supported television presents an existential crisis.
As broadcast TV continues to fall, the classic process of building consumer brands will decline, too.
What strategies can a brand use to mitigate the decline of mass media?
This challenge presents a terrific opportunity for innovation and the creative application of new technology.
One solution will involve a radical transformation of product identity systems. Recent advances in product identity — particularly the venerable barcode — offer an alternative the downward spiral of proliferating ads, declining viewership and shrinking reach. The new GS1 Digital Link standard is designed to provide manufacturers with a way to link product information uniformly and consistently with the package. Literally, the product itself is the new channel: a smartphone-equipped consumer can simply scan the package to gain access to rich metadata including marketing material, instructions for use, information about sourcing and ingredients, and more. Digital Link connects the physical product with an invisible cloud of metadata.
Another solution might entail a drastic evolution to the concept of brand personality. I’ll be sharing some thoughts about that tomorrow with the executive leadership at a major telco, and I hope to post a summary of my remarks here in a future blog post.
The previous article in this series was titled “Is Television The Most Ambitious Public Art Project in History?” As absurd as that question might seem on first glance, by sheer volume and scale, it seems evident to me that ad-supported media, particularly TV, has made a more profound and lasting impact on society than any other public art program. Love it or hate it, read all about it here.
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Digital identity is a complex and sometimes bewildering topic. I’m writing this series of articles to help clarify my own understanding, and I welcome your comments, corrections and contributions. If the topics in this series of articles interest you, then why not join me for a discussion in person? I will be the host and master-of-ceremonies for the Innovation Track of GS1 Connect, the biggest gathering of supply chain experts in the world. I will interview the leading experts on digital identity in a roundtable discussion at GS1 Connect on June 19.
If you are interested in digital identity, product identity, blockchain for supply chain, business process automation, the application of artificial intelligence to manufacturing and retail, then this is a conversation you don’t want to miss. This year, GS1 Connect takes place in Denver Colorado on June 19 to 21. You can get early-bird pricing if you apply before April 15.
For 30 years, I’ve been focused on designing and launching new digital services. In the process, I’ve grown fascinated with the way we are constructing a digital version of the real world. During my career, I’ve supervised the launch of the world’s first mobile video services, some of the earliest PC games, online games and mobile games, and the biggest live online learning programs in the world. I’m also the author of the award-winning book Vaporized: Solid Strategies for Success in a Dematerialized World which you can read in entirety here on Medium (or if you are feeling generous, you can buy the book on Amazon . Thanks, I love you for that!). Today I serve as the Special Advisor for Digital Identity to GS1 US. GS1 is the global standards body for product identity.
