The bane of TV networks, large and small, is the Digital Video Recorder (DVR – sometimes also called a Personal Video Recorder, or PVR). DVRs allow people to digitally record TV shows and then play them back in the same fashion as was once done with Beta and VHS (does anyone still even own a VCR?). This is actually a big problem for TV networks- if consumers are fast forwarding through commercials, the value of advertising space diminishes (at least in theory), as do revenues.
Let’s be clear- I’m not a big fan of TV advertising for this, and many other reasons; and I usually advise my clients to avoid this type of ad buy like the plague. Unless they have the budget to buy the ‘Midas’ slot- or the ad slot at the very end of the commercial break; everyone sees this ad, or at least the endplate/call to action part of it- which is why buying this spot on practically any show with decent ratings costs a small fortune. This is why you typically only see large companies with national brands in this spot (think the Fords, Coca-Colas, and Nikes of the world). Often, if a network can’t unload the Midas slot on an advertiser, they’ll use it to plug their own shows.
Research done by Socialnomics/HULT indicates that only around 18% of traditional TV ad campaigns generate a positive ROI. I’d love to know how the folks at the HULT International Business School came up with that number- one of the problems I have with TV advertising is that you can’t track the ROI of a TV ad via any sort of reliable metric, whereas with social media or other forms of internet-based advertising, it’s very easy to track detailed ROI in a variety of forms.
But, I digress.
Problem: DVR avoidance.
There’s a trend emerging in the TV entertainment world: live tweeting by cast, crew, and contestants. It’s much more successful with reality TV shows than scripted ones thus far, but the interest is there. Shows like The Apprentice, Dragon’s Den, and Shark Tank on the reality side of it are quite sophisticated- adding in content and personal viewpoints which enhance the show for viewers that are plugged into the Twitterverse. And here’s the good news for the networks: if you love to watch and Tweet, you’ve gotta catch the show live (at least until Marty McFly commercializes his time machine- and perhaps makes it smaller than a DeLorean).
Will Twitter save the networks’ butts?
No. But, there’s a big opportunity for networks to capitalize on the trend by incorporating a Tweet strategy into show scripts. With a good writer and production team on board, Tweeting could become a part of the storylines- thus enticing viewers to catch the show live. It’s also another channel for high-value product placement opportunities (imagine a frazzled Meredith Gray picking up her BlackBerry and tweeting out “Damnit, I need a Starbucks” after a lengthy surgery on the show).
For the uninitiated, I’m sure you’re thinking ‘I don’t like the ads! I want less of them, not more!’
As a TV enthusiast, I feel your pain. The commercialization of the medium can really take away from the enjoyment of the art form. But here’s the dirty little secret that no one outside of the business world talks about: the advertising pays for the production of the TV shows we love so dearly. No three minute commercial breaks, no Big Bang Theory or The Bachelor or Fringe, or whatever your flavour happens to be. If the big advertisers drop TV ad buys, the networks lose their primary revenue source… and stop ordering production. And then our only recourse would be to pay for HBO (kudos to them for coming up with a subscription-based business model that works; others have tried and failed).
My big gripe about network TV right now? Fox cancelled The Chicago Code. That was some good police drama, let me tell you. But I suspect that this decision is mostly attributable to the North American ‘ratings’ system that the industry has the audacity to call a marketing metric, and not the quality of the show itself. But, that’s a rant for another day.
Disclosure: at time of writing, I did not own an equity position in any of the companies mentioned in this article.