These days, the news is all abuzz about the proposed health care bill. Others say we should really be concerned about our huge budget deficits or our weak economy. The shrewd talk about the future or lack there of for the US dollar and, many kind people worry about the survival of the Social Security and Medicare systems.
All of them are serious challenges for our country and, to our industry. But to me, the biggest issue facing us over the next few years is not mentioned much these days. It is energy.
When gasoline briefly touched $4.00 per gallon at the pump last year it was THE headline news item in America. Then suddenly, oil fell from $147 a barrel back to $35 and people ignored it. You may not have noticed with all the collateral noise about, but a barrel of oil is now hovering at around $75 right now; more than double what it was some months ago.
Most analysts agree that the price of oil over the next several years is headed much, much higher. The most articulate proponents of this forecast are a group known as “Peak Oil” theorists. Their argument, in a nutshell, is that virtually every oil field in the world is now in irreversible decline. The PEAK means that the 85 million barrel that we produce each day now is close to the maximum that the world with current technologies can handle. Demand is a bit quieter now with the world wide economic struggles but, once we snap back into prosperity, hungry consumers across the world will satisfy their unquenchable thirst for oil at higher prices.
Critics of Peak Oil try to paint them as a motley bunch of wild eyed embarrassments who say that the world is running out of oil tomorrow. If you read them, you find that they really just say that we have reached the pinnacle of production. Over the next few years production will decline maybe by as little as 1-2 million barrels of oil per day each year. They never say that the world will run out of oil. I would say that it is a good bet that my grandchildren’s grandchildren will be using oil based products. It will, however, be hard to find and incredibly expensive compared to what we pay today.
And, remember, we do not control world demand anymore. In 1973, during the infamous gas lines in the US, most oil was consumed by the US, Canada, Japan, the then USSR, and Western Europe. Now, China and India, the Middle East, South America, even parts of Africa, are displaying a rapidly growing desire for oil. Can you blame them? They want to live as we have the past hundred years.
The western world’s economic growth and the 20th century was largely built on the back of cheap oil. That era is coming to a close. If it comes very gradually, we will be okay. Should it come quickly, with an oil shock like last year that then stays permanently high, we will be in for some serious dislocations.
What will happen if the spike is swift and semi-permanent? A few things that you do not see written up in the popular press including:
1) At $6 per gallon gasoline, your major legacy airlines (US Airways, Delta, and United) will go bankrupt. When gas prices were benign, fuel costs were 13% of an airline’s expenses. Now they are about 30%. If we go to $6 at the pump, it will be over 60% of an airline’s expense. They cannot do that and survive. How about a government bailout for the big airlines? It is possible, of course, but I don’t know how many more bailouts our country and taxpayers can stand. US Airways would appear to be toast fairly soon.
2) Many people drive SUV’s because they claim that they have to. They are transporting kids to sports programs or their own comfort level requires lots of room. Well, if you have a long commute, can you afford to triple your expenditure for gasoline? A few can but most of America cannot.
3) Cities will rebound as people will have to live nearer work than now. This, long term, is a big positive for America.
4) With major airlines down, trains should make a big comeback. If we build some of the high speed trains currently in place in Europe and Japan that go over 200 miles per hour, we can solve some of the transportation problems. And, it may be faster than some current trips. When you fly now, you have to arrive at the airport early, park your car, go through security, and then you may sit on the runway for a long time or suffer a significant delay. (As someone who logged 200,000+ miles per year for a long time, I know of what I write!). On the train, you arrive at the station, get on board, take off close to on time most often, and arrive in center city at your destination.
5) School buses currently get anywhere from 6-9 miles per gallon. Municipalities are financially strained right now. If gasoline soars, many more kids may walk to school. Some school systems may opt for a 4 day week or a shorter school year. Big mistake—we need a longer school year if our children are to be able to stay globally competitive.
6) I love to buy internationally. It is wonderful to eat some orange roughy that was caught and flash-frozen in the trawler off the coast of New Zealand and wash it down with a glass of an incomparable New Zealand Sauvignon Blanc. I do it now because, as the cost of transport rises, I may not be able to afford or willing to spend what it will cost to consume that way in a few years.
If any of this sounds alarmist, remember I am not saying that it will happen overnight or next year. But, it seems inevitable when you look at the data carefully. When I talk with thoughtful people about this issue, they are largely in denial. Here are a few real life comments to me:
a) “Someone will do something.” Who? Dick Nixon talked about energy independence in his 1973 State of the Union Address! Not much has been done since and nations hostile to us control much of the world’s supply. Al Gore, Mr. Green himself, was Vice President of the US for eight years. Nothing much happened even in 1993-1994 when the Democrats controlled both houses of congress. Perhaps the fact that oil prices fell for most of the 1990’s is the reason.
b) “The Canadian oil sands will bail us out”. Canada does have vast amounts of bitumen, a thick, goopy tar like substance that, at great expense, can be converted into low quality crude oil. But, to generate a barrel of oil out of the Athabasca tar sands (their real name) requires a use of natural gas and water that is about the energy equivalent of 2/3 of a barrel of oil. And their best hope is to be producing 5 millions barrels a day by 2020. If the rest of the world is in decline, that will help but not come close to solving the problem.
c) “The Saudis will merely turn on the faucet.” Saudi Arabia is not a stable nation so there is a geo-political problem. Many observers note that they cannot ramp up production as they once did. Some say that they are injecting water into their wells daily which indicates that the well is starting to play out and the water helps them extract some hard to get crude.
d) “People will just get smaller cars.” A great idea but it takes about 10 years to turn over the US car fleet. If you buy a car soon, make sure you get one with good mileage. I drive a Prius and gasoline prices are something I do not fear because I get 50 Miles per Gallon and sometimes more.
e) A brilliant executive whom I have tremendous respect for agrees with me but said “Necessity is the mother of invention. When prices spike and stay there, the US will get mobilized.” I agree that windmills and solar panels will be sprouting up all over the place as people see energy as a threat to their lifestyles. But it will take many years to implement a conversion to other energy uses. In the meantime, things could get very uncomfortable. I was speaking to an old acquaintance that lives in a swanky home outside Phoenix. He is fairly well off and mentioned that his air-conditioning bill was $800 last month. What does he do if it goes to $2,400? Would anyone buy his white elephant of a house? Can he turn the thermostat to 92 degrees to save money?
f) “Drill, baby, drill. All we need to do is open up the Alaskan National Wildlife Reserve know as ANWAR” Well, there may be huge oil deposits there; maybe not. Environmentalists have a problem with opening up the ANWAR but set that aside for a moment. If we started drilling tomorrow, we might not see a single barrel from the ANWAR until 2016 or 2017. In the meantime, we should be in a real crunch by then. Hope is truly not a strategy.
g) “You worry too much. We can just plant all of the Midwest with corn and ethanol will come to the rescue as it did in Brazil.” This is a favorite of congressman and Senators in farm states. The truth is that most scientists say that to produce a barrel of oil from ethanol takes approximately a barrel of refined oil or natural gas equivalent. Many see ethanol as an agricultural subsidy. How did it work in Brazil? That is sugar cane based ethanol that only needs one third the energy that corn based ethanol does for production. Also, if we divert too much acreage to corn, the prices of other agricultural products will rise.
Our media world would be affected as well. TV would probably still be in decline as would newspapers who have not gone digital. Remember, if people are spending a lot more on energy they cannot spend as they do now on discretionary items. So there will be fewer advertisers to prop up TV stations. Small town papers would probably get an up tick as many more would work closer to home. Radio could be a sleeper. If the big conglomerates sell off properties to locals, stations could have a comeback especially if they feature more local artists or music. Magazines will struggle mightily and outdoor will get a lot more local and remain the last mass medium. Digital will continue to grow but more slowly than today.
Ad agencies and media sales organizations will have a problem. If airfares soar you cannot see clients nearly as often as you do now. Some agencies have built their service model on relying on cheap airfares (relax, Southwest will survive!). Video conferencing will finally hits its stride as a business tool but stubborn older clients may go with local agencies whose team they can see regularly in person. Sales reps will not be able to try to work their magic on media buyers and planners. The business will be a lot less fun, for sure.
There will be positives. If people drive less and the driving they do is in far more efficient vehicles, our air will get cleaner. The cost of transport will force us to eat a lot more locally grown produce which will be fresher and far more nutricious. Neighborhoods may thrive as people will see each other more often and connect as their grandparents once did. And here is a shocker. The American industrial base may have something of a comeback as the cost of transporting something from the Philippines may negate the labor cost saving by producing off shore. So, some factories may re-open here at home!
If we walk more and drive less, we will look and feel better and maybe even drop a few pounds. That will lower the cost of health care.
All I ask is that you think about this issue for the long term and maybe position your life accordingly. If you live in a McMansion, 20-40 miles from a major city, you might want to consider selling it as soon housing snaps back. Make sure your next car is a gas miser. Install energy saving devices at home. Consider moving closer to work (I know this is not easy as schools may be poor there).
Finally, fulfill a dream or two now. Like many of my generation, I have a “bucket list” of places that I want to visit across the world. Until last year, I always thought that I would methodically knock one off each year. Now, my list has more urgency. If I want to go to let us say, Singapore, I should do it soon. If I wait 5-6 years, the airfare might be $4,000 and the US dollar might not buy much by then relative to the Singapore dollar.
Will all of this happen? I think that it could and the longer policymakers do not act, the worse it will be. It will not occur all at once and prices will not go straight up, but we are facing a problem bigger than all others out there.
Our life is about to change. But, if we handle it right, perhaps our satisfactions might actually increase.
If you would like to contact Don Cole directly, you may reach him at dcolemedia@gmail.com
Tuesday, August 25, 2009
Tuesday, August 18, 2009
Walter Cronkite and The Death of News?
On July 17th I was traveling far from home in a remote area. I saw a newspaper headline that said that Walter Cronkite had died at age 92. It was over a week before I was home and had internet access and could read the tributes and summaries of his long and illustrious life. In recent weeks, I have thought about him a great deal. He represented something in the media world which is long gone and will never return. In one sense, Cronkite’s death is almost synonymous with the death of news as we have known it.
Walter Cronkite was the predominant news voice in America for more than a generation. He anchored the then mighty CBS Evening News from 1962-1981. (I remember being so proud to place network TV spots in the evening news one month prior to Cronkite’s retirement). A poll in the mid-1960’s found that he was the most trusted man in America. When in February, 1968 Cronkite gave an editorial questioning President Johnson’s handling of the Vietnam War; Johnson said in the Oval Office, “if I have lost Cronkite, I have lost Middle America.” Several weeks later Senator Gene McCarthy won more delegates than Johnson in the New Hampshire Democratic primary and Johnson stunningly withdrew from the 1968 race.
In his heyday, Cronkite packed a serious Nielsen wallop. He garnered a 13-15 household rating (hard to believe in 2009) for his 6:30 pm broadcast. Some of his specials in primetime delivered double that. He was authoritative and people in large numbers were informed. His main competition, Chet Huntley and David Brinkley at NBC were also first rate and between the two networks covered a large cross section of the American public each evening.
Today, we find that all journalism and broadcast journalism entities are either dying or struggling. News as we knew it still exists but it only reaches small numbers of the population due to fragmentation and people seemingly interested in far lighter fare. What passes for news is many programs that are almost salacious in content and the focus is on celebrities or macabre crimes.
People say that the digital world will bail us out. Yet, as of now, no clear business model has emerged that makes online reporting financially viable. And, we all know that there is no substitute for field reporting. Bloggers, and I love being one and appreciate your readership, cannot totally bail us out. As I wrote back in February about newspapers, there is no publisher left in the US who can afford to allow a 21st century Woodward & Bernstein to investigate a Watergate style scandal.
So much is left unexplored. Some people tell me that Americans want the celebrity news and their football as well and are oblivious about what is happening these days. College students watch the entertaining satire of Jon Stewart and Stephen Colbert in lieu of news. Most Americans, I am told, just do not care about what is really going on. I am not so sure. If Cronkite at his zenith reported about last year’s financial crisis and our ongoing struggles today, a lot more Americans would realize that they are paying for the big mistakes of commercial and investment bankers in recent years. And, if Cronkite mentioned the seven figure bonuses that some of these individuals still get, while we taxpayers pick up the tab for their transgressions, people would be marching in the streets.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Walter Cronkite was the predominant news voice in America for more than a generation. He anchored the then mighty CBS Evening News from 1962-1981. (I remember being so proud to place network TV spots in the evening news one month prior to Cronkite’s retirement). A poll in the mid-1960’s found that he was the most trusted man in America. When in February, 1968 Cronkite gave an editorial questioning President Johnson’s handling of the Vietnam War; Johnson said in the Oval Office, “if I have lost Cronkite, I have lost Middle America.” Several weeks later Senator Gene McCarthy won more delegates than Johnson in the New Hampshire Democratic primary and Johnson stunningly withdrew from the 1968 race.
In his heyday, Cronkite packed a serious Nielsen wallop. He garnered a 13-15 household rating (hard to believe in 2009) for his 6:30 pm broadcast. Some of his specials in primetime delivered double that. He was authoritative and people in large numbers were informed. His main competition, Chet Huntley and David Brinkley at NBC were also first rate and between the two networks covered a large cross section of the American public each evening.
Today, we find that all journalism and broadcast journalism entities are either dying or struggling. News as we knew it still exists but it only reaches small numbers of the population due to fragmentation and people seemingly interested in far lighter fare. What passes for news is many programs that are almost salacious in content and the focus is on celebrities or macabre crimes.
People say that the digital world will bail us out. Yet, as of now, no clear business model has emerged that makes online reporting financially viable. And, we all know that there is no substitute for field reporting. Bloggers, and I love being one and appreciate your readership, cannot totally bail us out. As I wrote back in February about newspapers, there is no publisher left in the US who can afford to allow a 21st century Woodward & Bernstein to investigate a Watergate style scandal.
So much is left unexplored. Some people tell me that Americans want the celebrity news and their football as well and are oblivious about what is happening these days. College students watch the entertaining satire of Jon Stewart and Stephen Colbert in lieu of news. Most Americans, I am told, just do not care about what is really going on. I am not so sure. If Cronkite at his zenith reported about last year’s financial crisis and our ongoing struggles today, a lot more Americans would realize that they are paying for the big mistakes of commercial and investment bankers in recent years. And, if Cronkite mentioned the seven figure bonuses that some of these individuals still get, while we taxpayers pick up the tab for their transgressions, people would be marching in the streets.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Tuesday, August 11, 2009
Hooked on Hulu
About 18 months ago, HULU emerged as an advertising medium. I was a very early adapter as a user and sung its praises to anyone who would listen. Some friends and colleagues accused me of having Hulu on the brain. I was stunned because it was easier to navigate than any other on-line site and gave me a defacto DVD player wherever I had a laptop. It has all but eliminated my TV viewing other than a very occasional live sporting event.
What is Hulu.com? It is a very rare marriage of Fox, NBC, ABC, and private investor Providence Capital which put up $100 million as seed money. Hulu.com runs current TV shows on the above networks, many vintage TV series and a few hundred full run movies. There is advertising but it is about one fourth of what you see on network TV or cable. You can watch what you want when you want. And, it is currently free to users.
Interestingly, Hulu is making money where other groups such as You Tube, Joost, and Veoh appear to be hemorrhaging cash. Why have they succeeded? Well, as mentioned above the ease of use is extraordinary. Also, their content, largely network TV and films, is in the sweet spot of interest for most people. And, the advertising, while there, is not much of a bother as all breaks are very brief (no more than 30 seconds).
A very interesting phenomenon is taking place with Hulu.com ad rates. It has been reported that Hulu.com CPM’s are actually higher than that of what the networks get for the same shows on air. Traditionally, you paid high rates for top rated shows because they were said to be huge reach builders. “You pay more to get more” was the creed we all lived by. But now, while some branding power exists with Hulu.com, the reach is simply not there. The rationale for the premium for Hulu.com commercials is driven by supply and demand (far less supply for Hulu.com than on air) and also a better chance of your spot being seen. People are saying that Hulu.com is a captive audience. As a noted media researcher recently said about Hulu.com, “you know you have eyes on the screen.” Well, young people often keep several screens open when viewing video and could shift to another when a spot comes up. But most of us will probably watch the brief break.
Now, if you think this post is all about Hulu.com, you will miss my point. Hulu is one example, maybe the best, of what is eroding advertiser supported TV right now. It is something of a hybrid as it offers traditional TV and cable fare but still has a foot in advertising as well. But, because it seems to be holding its audience during commercials, it is getting a premium price for what presently are small audiences.
Stepping back a bit from Hulu, clearly, something is happening out there. Here are a few anecdotal examples:
An advertiser from the mountain states told me that he subscribed to a satellite service that threw in a time shifting device as part of the package. “My wife and I have not seen a commercial in four months.” He is a millionaire several times over and would be a wonderful prospect for a wide variety of products and services. How do you reach him now?
A very nice lady pushing 70 tells me that she now gets entire seasons of TV series from Blockbuster. She watches two episodes a night and sometimes more on weekends. Over the last year, she has worked her way through several series and often does not turn her television on for weeks on end. For someone in traditionally the heaviest viewing demographic, she is now virtually impossible to reach.
Book sales are down in this recession but library usage is up over the last 12 months by 18%. Think about that for a moment. Is your salary up 18%? Has your business billing increased 18% in the same time frame? More damning, is the value of your home up 18% year to year?
Libraries are now carrying a wide range of videos. You can get TV series in most locales for free. Some give you classic movies for free as well and a few provide first run films for a rate about half that of Blockbuster. Still others have no charge for films if returned on time. More people are using libraries to obtain free or inexpensive videos. It hurts ad supported TV.
Personally, I was stuck this past January at home during a snowstorm. I went on Netflix and watched Casablanca, one of my all time favorites, instantly. Normally, a snowstorm would be a good time to catch a light viewer like me spending some time in front of the television. Not in the media world of 2009.
This is heady, almost radical stuff. In the heart of hometown America, many mature people have decided to secede from much of advertiser supported television. These are not the young trendsetters or early adapters to new offerings. They are the people the networks always assumed would watch anything. But choice, easy to use technologies and maybe some education from their children is changing the game and rapidly.
With every passing day, thousands of people of all ages in the US join the “leakage” and escape from behind the once Iron Curtain of advertiser supported television.
You may not be hooked on Hulu yet and maybe you never will be. Many millions are and millions more are finding alternative ways to see video. The tidal wave cannot be stopped.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
What is Hulu.com? It is a very rare marriage of Fox, NBC, ABC, and private investor Providence Capital which put up $100 million as seed money. Hulu.com runs current TV shows on the above networks, many vintage TV series and a few hundred full run movies. There is advertising but it is about one fourth of what you see on network TV or cable. You can watch what you want when you want. And, it is currently free to users.
Interestingly, Hulu is making money where other groups such as You Tube, Joost, and Veoh appear to be hemorrhaging cash. Why have they succeeded? Well, as mentioned above the ease of use is extraordinary. Also, their content, largely network TV and films, is in the sweet spot of interest for most people. And, the advertising, while there, is not much of a bother as all breaks are very brief (no more than 30 seconds).
A very interesting phenomenon is taking place with Hulu.com ad rates. It has been reported that Hulu.com CPM’s are actually higher than that of what the networks get for the same shows on air. Traditionally, you paid high rates for top rated shows because they were said to be huge reach builders. “You pay more to get more” was the creed we all lived by. But now, while some branding power exists with Hulu.com, the reach is simply not there. The rationale for the premium for Hulu.com commercials is driven by supply and demand (far less supply for Hulu.com than on air) and also a better chance of your spot being seen. People are saying that Hulu.com is a captive audience. As a noted media researcher recently said about Hulu.com, “you know you have eyes on the screen.” Well, young people often keep several screens open when viewing video and could shift to another when a spot comes up. But most of us will probably watch the brief break.
Now, if you think this post is all about Hulu.com, you will miss my point. Hulu is one example, maybe the best, of what is eroding advertiser supported TV right now. It is something of a hybrid as it offers traditional TV and cable fare but still has a foot in advertising as well. But, because it seems to be holding its audience during commercials, it is getting a premium price for what presently are small audiences.
Stepping back a bit from Hulu, clearly, something is happening out there. Here are a few anecdotal examples:
An advertiser from the mountain states told me that he subscribed to a satellite service that threw in a time shifting device as part of the package. “My wife and I have not seen a commercial in four months.” He is a millionaire several times over and would be a wonderful prospect for a wide variety of products and services. How do you reach him now?
A very nice lady pushing 70 tells me that she now gets entire seasons of TV series from Blockbuster. She watches two episodes a night and sometimes more on weekends. Over the last year, she has worked her way through several series and often does not turn her television on for weeks on end. For someone in traditionally the heaviest viewing demographic, she is now virtually impossible to reach.
Book sales are down in this recession but library usage is up over the last 12 months by 18%. Think about that for a moment. Is your salary up 18%? Has your business billing increased 18% in the same time frame? More damning, is the value of your home up 18% year to year?
Libraries are now carrying a wide range of videos. You can get TV series in most locales for free. Some give you classic movies for free as well and a few provide first run films for a rate about half that of Blockbuster. Still others have no charge for films if returned on time. More people are using libraries to obtain free or inexpensive videos. It hurts ad supported TV.
Personally, I was stuck this past January at home during a snowstorm. I went on Netflix and watched Casablanca, one of my all time favorites, instantly. Normally, a snowstorm would be a good time to catch a light viewer like me spending some time in front of the television. Not in the media world of 2009.
This is heady, almost radical stuff. In the heart of hometown America, many mature people have decided to secede from much of advertiser supported television. These are not the young trendsetters or early adapters to new offerings. They are the people the networks always assumed would watch anything. But choice, easy to use technologies and maybe some education from their children is changing the game and rapidly.
With every passing day, thousands of people of all ages in the US join the “leakage” and escape from behind the once Iron Curtain of advertiser supported television.
You may not be hooked on Hulu yet and maybe you never will be. Many millions are and millions more are finding alternative ways to see video. The tidal wave cannot be stopped.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, August 5, 2009
The Great Interregnum
In European history, there were a number of instances where a country was said to be going through an Interregnum. It is basically a fancy word for two Latin terms meaning “between kings.” Sometimes a king died without children and other times there was a civil war or a young child was not ready to succeed his or her father. The longest period happened in the German Empire from 1254-1273 and was known as The Great Interregnum.
This 19 year period was one of disorder and civil war. No single claimant could rally enough support to secure the endorsement of the nobility. Finally, they settled on Rudolph of Hapsburg, a minor noble who was something of a compromise candidate whom the many princes in the far flung empire thought would not make waves.
Rudolph was not a scholar and little was expected of him. But, he turned out to be shrewd. By marrying off four of his daughters to key princes across the region he consolidated his power. From a shaky start in 1273 a Hapsburg reigned in either Germany or Austria right through 1918. Quite a run for a family of minor nobles!
I believe that we will soon face a form of interregnum in the US media world. King TV is old and will soon die having been an almost autocratic advertising medium. What will happen to our world when TV as we know it ceases to work for our clients?
Talk to any experienced media professional in confidence. All of them will tell you that TV does not work as well as it did even five years ago. Most will admit that it will continue to get worse; others will say it will just be different. For the record and to clients or top management they may keep to the party line about TV’s effectiveness, but most know in their hearts that the game as we have experienced it is rapidly coming to an end.
Now, I stress that TV is not going to dry up and blow away. The decline will be continual and gradual. It will be similar to the fragmentation in viewing that has taken place over the last few decades. But one day, not that far away, advertisers are going to wake up and discover that TV no longer pays out for them.
It will come down to an issue that we have mentioned a great deal in this blog in recent months—many people will no longer be seeing the commercials. TiVo and other time shifting devices will continue to grow. Hulu, You Tube and a dozen other video options will continue to grow and take time away from traditionally commercially supported television. Make no mistake. Viewing of video may actually increase over the next few years. But viewing of commercials, as we know them, will definitely decline perhaps by 25-35%. That will put a great stress on whether an investment in conventional broadcast TV can pay out profitably for an advertiser.
Some players, local cable in particular, have some interesting new products which can help them blunt these inevitable changes. And, alternative means of viewing TV such as Hulu and some emerging Hulu clones may likely prosper in this new environment (we will discuss Hulu.com at length in an upcoming post).
All this adds up to a growing sense of urgency. Advertisers and their agencies must start to branch out and test multiple forms of new video opportunities. Experiment with copy lengths and use new turbo charged targeting techniques to reach prospects with video. Many people are using the current severe economic downturn as an excuse not to broaden their horizons. But if they wait much longer they may find themselves in two years time jumping on to a moving train which is an unpleasant and often dangerous experience.
When will the great media interregnum come? Many say when the upfront network marketplace dissolves. My opinion is that it will be like a stealth bomber and sneak up on us. It could be as soon as three years and as long as seven. But it is surely coming. Make your plans now.
Finally, some who agree with me say that they are afraid what will happen to them both professionally and financially when TV no longer is the silver advertising bullet. True, the commercial persuasion industry that we have all known, loved, and been rewarded by is soon to go out of business. But, please, my friends remember this. You may lose your job during this upheaval and some of your savings. But one thing I know for sure--true financial wealth is completely portable and rests on your shoulders. You have knowledge and experience and can thrive no matter how our world evolves.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
This 19 year period was one of disorder and civil war. No single claimant could rally enough support to secure the endorsement of the nobility. Finally, they settled on Rudolph of Hapsburg, a minor noble who was something of a compromise candidate whom the many princes in the far flung empire thought would not make waves.
Rudolph was not a scholar and little was expected of him. But, he turned out to be shrewd. By marrying off four of his daughters to key princes across the region he consolidated his power. From a shaky start in 1273 a Hapsburg reigned in either Germany or Austria right through 1918. Quite a run for a family of minor nobles!
I believe that we will soon face a form of interregnum in the US media world. King TV is old and will soon die having been an almost autocratic advertising medium. What will happen to our world when TV as we know it ceases to work for our clients?
Talk to any experienced media professional in confidence. All of them will tell you that TV does not work as well as it did even five years ago. Most will admit that it will continue to get worse; others will say it will just be different. For the record and to clients or top management they may keep to the party line about TV’s effectiveness, but most know in their hearts that the game as we have experienced it is rapidly coming to an end.
Now, I stress that TV is not going to dry up and blow away. The decline will be continual and gradual. It will be similar to the fragmentation in viewing that has taken place over the last few decades. But one day, not that far away, advertisers are going to wake up and discover that TV no longer pays out for them.
It will come down to an issue that we have mentioned a great deal in this blog in recent months—many people will no longer be seeing the commercials. TiVo and other time shifting devices will continue to grow. Hulu, You Tube and a dozen other video options will continue to grow and take time away from traditionally commercially supported television. Make no mistake. Viewing of video may actually increase over the next few years. But viewing of commercials, as we know them, will definitely decline perhaps by 25-35%. That will put a great stress on whether an investment in conventional broadcast TV can pay out profitably for an advertiser.
Some players, local cable in particular, have some interesting new products which can help them blunt these inevitable changes. And, alternative means of viewing TV such as Hulu and some emerging Hulu clones may likely prosper in this new environment (we will discuss Hulu.com at length in an upcoming post).
All this adds up to a growing sense of urgency. Advertisers and their agencies must start to branch out and test multiple forms of new video opportunities. Experiment with copy lengths and use new turbo charged targeting techniques to reach prospects with video. Many people are using the current severe economic downturn as an excuse not to broaden their horizons. But if they wait much longer they may find themselves in two years time jumping on to a moving train which is an unpleasant and often dangerous experience.
When will the great media interregnum come? Many say when the upfront network marketplace dissolves. My opinion is that it will be like a stealth bomber and sneak up on us. It could be as soon as three years and as long as seven. But it is surely coming. Make your plans now.
Finally, some who agree with me say that they are afraid what will happen to them both professionally and financially when TV no longer is the silver advertising bullet. True, the commercial persuasion industry that we have all known, loved, and been rewarded by is soon to go out of business. But, please, my friends remember this. You may lose your job during this upheaval and some of your savings. But one thing I know for sure--true financial wealth is completely portable and rests on your shoulders. You have knowledge and experience and can thrive no matter how our world evolves.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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