The Future of TV

An Insider’s View: A Conversation with a Senior TV Executive about the Future

“Truth be told, there's enough in

it for all of us.”

The Story Telling Animal

Every story is over before it begins

The figures in a story are no more free than a painting. Their destiny is set but unrolls before us in time.

All narrative is synchronic

even though we watch diachronically

Our vantage point would seem ironically detached… but we find ourselves deeply engaged

The irony is precisely because they are fixed, we lend ourselves to their fate

A story makes it safe to empathizebecause someone already has decided

11

JACK WOLTZ ALWAYS slept alone. He had a bed big enough for ten people and a bedroom large enough for a movie ballroom scene, but he had slept alone since the death of his first wife ten years before…

On this Thursday morning, for some reason, he awoke early. The light of dawn made his huge bedroom as misty as a foggy meadowland. Far down at the foot of his bed was a familiar shape and Woltz struggled up on his elbows to get a clearer look. It had the shape of a horse’s head…

12

04/10/2023 Confidential 13

Today, Video is the largest medium and story telling is the biggest part of it

But not everything is happy in TV

Almost everything that ails us is about fragmentation

Audience & Data

Video Distributio

n & Devices

Content & Channels

Business Models

Linear, VOD, Broadband,DVRs, Network DVRs, iPads, Connected TVs, Phones, Glasses, Optic Implants

Online/Offline Behavioral,

Demo

STB Click-Stream

You TubeInformational Pornography

From 5 to 300+ Channels,

2000+ Worldwide

RTB, Programmatic, Auctions, Performance Based, Subscription vs. Advertising

Impact of audience fragmentationBut what we see most dramatically is the decline of ratings

But fragmentation has two faces

Some would have you believe it’s an easy transition from mass to targeted

In the US Market Today, targeting cannot replace reach

Target Reach

Resonance

Value of a Context

Value of a Mass Audience

Performance

Value of an Audience

May 7, 2012 Confidential 19

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So TV is fighting back, but with large implications to business models and behavior

Sports & Live Bundling the Linear and Non-linear Pieces & Measurement

Re-balancing Advertising and Subscription

And Maybe Unbundling?

Whose Ox Gets Gored When Content Costs Go Up?

• Sports -- 11% of viewing, 45% of the costs• Already channels being dropped and choices will

be moved to other distribution venues• Content Guys – three strategies emerge: unique

audiences, wolf packs (bigger and bigger) and hedges with direct to consumer

• A la carte charges already on two MVPDs• Massive competition for “SVOD” as reruns fade• What new models will emerge because of

technology?

Remember Fundamental Consumer Business Models Can Change

• As a piece in Scribner's Monthly explained in 1878, it is only the "second and third rate novelist who could not get published in a magazine and is obliged to publish in a volume…”

• With the rise of broadcast in the first half of the 20th century, printed periodical fiction began a slow decline as newspapers and magazines shifted their focus from entertainment to news and information

• Novels = Binging (We want to catch up so when everything is available we binge)

0 2 4 6 8 10 12 14 16 18 200%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

But, the nature of consumption of popular content hasn’t changed

Number of books sold from most to least popular US 1865-1960

Log 10

Sca

le

A minority of the content always supports a majority of the views

Percentage of VOD impressions against top twenty shows

Either by Time

“ …out of 590 Homer papyrus fragments recovered in Egypt at the last count, 454 preserve bits of the Iliad, the remaining the Odyssey”

Or by Distribution. Example P2P Video.

Rank of Popularity Statistics of Measured Downloads

Log10 Scale

A very few pieces of content (<100) out of 100K support over 90% of the views

Fragmentation, by adding more choices doesn’t change the curve, only flattens it across a linear increase in content

And really, is the total amount of additional work that difficult?

But the consistency of popularity doesn’t explain why buyers pay more per-person

May 7, 2012 Confidential 28

Super Bowl

Reach

Academy Awards

Golden Globes

Monday Night Football

Burn Notice

CPM

The Voice 2012-13

The 3 Degree Rule: We are influenced byour friends…

The 3 Degree Rule: We are influenced by our friends, our friends’ friends…

and our FFF’s.

And often influence takes multiple exposures so

those larger shows make sense.

The 3 Degree Rule: We are influenced by our friends, our friends’ friends,

MASS TV AUDIENCES AREN’T LINEAR – They are connected

So the same audience of N viewers distributed across two equal sized programs of N/2 viewers has significantly fewer connections

1 2 3 4 5 6 7 8 9 10 11

N/2 Viewers * 2N Viewers of a Show

And the pricing reflects that

Price Per Ounce

=

Price Per Person

>>

One More Question

The N*ture of Content: How much of what we like is influenced?

Nature• Homophily – We Associate

with people who resemble us (Genetics) and who like the same things

• And we probably like the same things whether or not we communicate with people about them

• But knowing our friends like them makes us like them more

Nurture• We need to discover what

we like… and more and more with all the choices we need help discovering it

• We are influenced by our connections, those we trust

• There are videos where the sharing transcends the content – Gangnam Style

Summary

• Just Aggregating Audiences will not Replace those large mass programs and the connections they generate – 2+2 in this case does not equal 4

• We will require Smarter Targeting that moves along the lines of our Connections

• Distinguishing by Content and not by Distribution will align you more with your users and make you less focused on the vicissitudes of technology

• Probably Two Types of Content – – Things that are valuable if we can share them Gangnam Style– Content that has some social value (we like it more if our friends

like but here our “taste” (nature) rules.

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ViewersExponential (Viewers)Rating

Advanced Advertising in Television: Whose Ox Gets Gored?

Presentation to ABC

Visible WorldApril 4th, 2011

Does the Introduction of Targeting and Advanced

Advertising Technologies Alter the TV Landscape?

04/10/2023 42Visibile World

Today, Converging or Diverging?

Internet TV

04/10/2023 43Visibile World

Round up the Usual Suspects

Targeting

DataInteractive

04/10/2023 44Visibile World

Can all these guys be happy?

Inventory Owners

(Pay More, Give Less)

Media AgenciesPay Less, Get More)

InfrastructurePlayers – MSO…

(Piece of the Action)

TechnologyData

(Piece of Anyone’s Action)

Advertisers (More Efficiency,

Effectiveness

04/10/2023 45Visibile World

Why buy the Whole cow when you can just buy the Brisket…

04/10/2023 46Visibile World

Supply and Demand Remain the Most Important Consideration

Supply <Demand

Demand ~ Supply

Supply > Demand

04/10/2023 47Visibile World

Supply > DemandMultiple Advertisers Sharing Inventory

• Develop Infrastructure to Monetize the Inventory

• Buyers Choose How to Buy –Buy Audiences

• Dollars go to those who take risk, provide liquidity

• Tech to Make Media Buying More Efficient

04/10/2023 48Visibile World

Garbage Barges

outline• We are a story telling animal

– We are wired for narrative – what does it mean– When they say we are wired for Narrative what does it mean

• Our vantage point would seem ironically detached ..but we find our selves deeply engaged (brad pitt)

• All Narrative is Synchronic (at a specific point in time the French Revolution) even though we watch diachronically (over time now or five hundred years from now) (french ws picture)

• The figures in a story are no freerer than a painting. Their destiny is set but unrolls before us in time (rembrandt)– In movie the image is surrounded by an edge like a painting that gives us context– In life we think we are free of context and free of will – but the story reminds of our fear that we are

not.• Our Revels are now ended..Foretol• c• Live Sympathy..Fix Empathy (brians song)• There is an old legend that when a soul is about to be reborn it remembers life’s past suffering

and begs not to go forward. An Angel touches it so it forgets. So it is with our stories.•

In movie the image is surrounded by an edge like a painting that gives us context

• Prof Michael Roemer - What enhances the narrative survives, what detracts from it fails• Differences in interactions

• In daily life our actions seem to constitute freedom and a potential mastery of events. But the story tells us otherwise. For the figures are trapped an enchantment of causes and consequences of how they came to be. And that trap, that aspect that it’s over, predetermined is what engages. Its’ why intrusion disrupts.