Picture if you will a dimension not only of sight and sound but of mind, a place where content meets advertising through a door which may be locked by time-shifting and unlocked with the key of multiple platforms. There’s a signpost up ahead, your next stop: the Beverly Hilton.
On September 10, 2013 a packed house gathered for the inaugural event of the 2013-14 HRTS Newsmaker Luncheon series, the State of the Industry.
Ted Harbert
It’s an oft-repeated truth that the television business is in the midst of rapid and accelerating change, where both opportunities and dangers abound. As Charles Darwin said, it is not the strongest of the species that survive but rather those most responsive to change.
Helping us navigate the way forward are five panelists representing a cross-section of our industry:
Ted Harbert, Chairman, NBC Broadcasting; John Landgraf, CEO, FX Networks and FX Productions; Michael Lombardo, President, HBO Programming; Tim Spengler, Worldwide CEO, MAGNA GLOBAL; and Andy Forssell, Acting CEO and SVP of Content, HULU.
Michael Schneider
Moderating this panel of industry heavyweights was TV Guide’s Michael Schneider, who noted that binge viewing is becoming increasingly common, going on to ask the panelists if they indulge in the practice. Landgraf said that he binges on THE WIRE and that “I watched GAME OF THRONES before that, I’m a binge viewer of Michael’s programming”. Harbert admitted that he binges on HOUSE OF CARDS and ORANGE IS THE NEW BLACK and that “I have several things still on queue ready to go”.
So what do binge viewing and time-shifting mean in terms of changing viewer habits? Harbert said that “we are training them to [binge view] but we don’t know if it’s a good idea or not, because at least in broadcast we still get paid for those first three days”. He added that in general “we are entering an age of disruption, where all of the practices, the traditions we’ve had for the last fifty years are now just flying out windows”. Lombardo said that the trend toward time-shifting is overstated, that “there is still going to be a place for what I’ll call the real-time television experience, for the right shows. When you have a show like SONS OF ANARCHY that premieres, you can look at the social networks the next morning and there’s a phenomenon that happens, there’s a shared experience”. Landgraf agreed, saying “I don’t see us going away from a linear, live, day-and-date marketing strategy anytime soon”.
Tim Spengler
Given all of the time-shifting occurring, Schneider asked Spengler if delayed viewers are as valuable to his advertising clients, and especially after the third day. Spengler replied that “there’s a combination of ad-attentiveness and ad-avoidance, the younger you are the more likely you are to avoid the ad, and so we’re going to place bets with big experiences like sports events”.
Schneider pointed out that Hulu’s owners have recently invested $750 million and that a lot of it is going to programming, going on to ask Forssell about his strategy. Forssell said that “in the end, there’s an amount of screen time that users have and it’s getting larger. Our mission is figuring out how we help traditional storytelling, 22- and 44-minute, win out in that battle for screen time”. A lot of that battle comes down to the fact that “if you make it easier for people to watch, they’ll watch more”. Forssell added that their overall strategy is to “try and build a world where we don’t care if people watch on Day 1 or on Day 365, let’s help them find something they love” and that “with a great user experience, I don’t think these are problems, I think they’re opportunities”.
Michael Lombardo
With so many more buyers in the game, Schneider wondered about competition, if everyone is now pitching to everyone then how does that affect the deals being made? Lombardo said that “it started with Netflix’s two season buy into HOUSE OF CARDS”, drawing a big laugh as he added “it’s the bane of my existence” since “a pitch will come in, literally with no script, a pitch on something that needs a lot of work, and people are looking for and getting series commitments”. The real problem with this is that less development is happening and so “good shows are prevented from becoming great shows”. Harbert concurred, adding that experienced buyers play a critical role since “it’s the writer’s job, it’s the agent’s job to come in and say ‘I want to go right on the air’ and it’s our job to say ‘okay, this one deserves it and this one doesn’t’”.
Andy Forssell
When it comes to ratings, neither Netflix nor Hulu report them and so Schneider asked Forssell if they should. Forssell said “we don’t, and I don’t think they should either. It’s a natural question that we should get asked every week for the next five years but I hope the answer is the same” since “we greatly value the patience that we can have, to look at a year or two years and judge success over that period”. Sensing a golden opportunity, Lombardo drew a huge laugh when he quipped “I didn’t know there was an option of not reporting ratings”.
As to Nielsen, Schneider asked Spengler how he feels about the current ratings system and how it might change going forward. Spengler said “I think the currency is going to change if you’re talking about where the ad spend is going”, adding that in future they’ll be less interested in traditional viewer demographics than in “what was your online behavior, and what television shows are you watching”. As for this new wave of behavior-targeted advertising, Spengler joked that “if you’re on the toilet, I want to serve you a Charmin ad immediately”. In terms of how the overall system may change, Spengler used a financial analogy in saying that “it’s like the New York Stock Exchange, it sat on a legacy model for all those years and NASDAQ came in and said ‘through data and technology we can change the whole way you buy and sell’”, adding that the same thing is currently happening in digital media and will inevitably happen in traditional media. Harbert agreed, saying that “the key is that we have to get Nielsen to measure the tablet, the VOD, the phone” and “they say they’re on it but everyone in this room knows that they’re a monopoly and they’ll get to it when they get to it”.
John Landgraf
In closing, Schneider asked the panelists for their guilty pleasures, the show that is on their DVR that they’re embarrassed to admit. Forssell said “I’ve been a fan of THE BACHELORETTE, it’s a well-done show”. Spengler said that he doesn’t have a show he’s embarrassed about but that he loves MAD MEN since “my parents met at Y&R in 1962, so that’s a part of my life”. Lombardo said “the title’s the worst part of it: NAKED AND AFRAID”. Landgraf said “I feel embarrassed for not having a guilty pleasure” and Harbert admitted that “I love NIKITA on The CW, I’ve watched every single episode”.
Charles Darwin said that it is not the strongest of the species that survive but rather those most responsive to change. It’s clear that the business is changing, evolving, into what is not yet clear but with buyers proliferating and viewership increasing it is clear that the business will continue to survive and even thrive. No matter the platform or business model or measurement metric, there will always be a strong appetite for content and so the future is bright.
Photos by Chyna Photography
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