Event: Kelsey Group Drilling Down on Local Search 2005
Session Title: Blurring the Picture: Cable TV, Video Search and Local Directional Media
Session Date: April 20, 2005
Session Time: 11:15 am – 12:00 pm
Blurring the Picture: Cable TV, Video Search and Local Directional Media Video on demand, digital video recorders and Internet TV: All these innovations give viewers more and more control over TV content and, potentially, TV advertising. Do these consumer-oriented developments fundamentally transform TV from the once-preeminent branding vehicle for national advertisers into a directional medium with localization potential? What are the implications for cable companies, telecom companies, online publishers, consumers and local advertisers? And what about the proliferation of online video search? Will the Internet become a de facto broadcast medium and search engines the new networks?
Steve Cook, VP, Programming & Ad Sales, TWC/Road Runner
Eitan Gelbaum, Marketing Director, Amdocs Advertising & Media Division
Bradley Horowitz, Director, Multimedia & Desktop Search, Yahoo!
Karen Howe, VP & General Manager, Singingfish.com
Warren Schlichting, VP, New Business Strategies, Comcast
Related Posts: buzzhit!’s Drilling Down on Local Search 2005 Index Page
Q: Provocative question… broadcast media advertising model will collapse… agree or disagree, and will the Internet take over?
Howe: Television advertising will decend by 20% over the next 5 years… that’s a large amount… that will put downward pressure on it, but it won’t collapse it. Online will soak up some, but not all. Product placement may be a factor
Q: Factor Tivo into all of this; 70% skip ads
Schlicting: $60B business, fast forwarding isn’t good. But consumers are in control; you can’t fight that. If they don’t like the model, where do you go. It’s not clear that CPM expectations have moved accordingly. Interactive TV is directional
Cook: Collapse is a strong word. I think you’re going to see dollars shift to where they’re most efficient, and that will happen in verticals (like automotive), due to consumers researching purchases online, etc. People will want to consume media when/where they want it. Test marketing a time-shifting model where commercials can’t be skipped [Ed: Wow, they really don’t get it…]
Gelbaum: Technology enables highly targeted advertising, at least the way Telecomm’s will deploy (IP-TV, Internet-TV). That requires a set-top box; each is uniquely identifiable. The interactive nature also allows people to conduct searches, using a very intuitive interface; 40% of households have 3 TVs. Enabling more interaction between the consumer and the medium
Horowitz: One thing that could drive the collapse is P-2-P file sharing like BitTorrent; getting a show that’s aired on the East coast before it’s aired on the West coast will drive change. There are some steep barriers with video than music, but if that were to start to happen, that would drive a point to point model vs broadcast.
Schlicting: The question is, can search support network television? And by the way, is network television relevant. One of the big questions is, will people search for video, to the decline of television video. They probably will. To what extent is the question. On the other hand, that’s a legacy business that people are trying to protect. What happens with video blogging
Howe: People who use audio/video search are 16-24, they use it every day, rate it more important than email or IM. They use it concurrently with other activities; fractured, distracted audience. Studied 3000 kids across 40 campuses, they’d lose the TV before the Internet; it’s that important to them. And there’s different types of content being created; it’s mostly short-form, 30 minutes or less… but that might shift. Content creators think about extending their market.
Horowitz: We see this trend; a shift from Head content to Tail content…. recently acquired Flickr, which is entirely user generated. Community that invests a lot of time, avid consumers, in building content. Will eventually apply to all forms of media. Jib-Jab ended up getting a deal with Yahoo for their content; moved from Tail to Head.
Howe: If you look at the production tools today, they’re coming down market, making it easier and cheaper to generate content [Ed: Exactly what I said on the panel yesterday!]
Q: Will the money be available to create high quality shows… impossible for an individual to duplicate. Will those shows be available if people abandon the traditional model supported if the national reach disappears
Howe: People will pay for great stuff…. 80% of people do not [Ed: Bogus… that’s a //service// number, e.g., dating sites, not content]
Q: What will be a hit show?
Schlicting: A hit is a profitable show; you don’t need a lot of people if it only cost $6k to create
Cook: Does user generated content devalue professional content
Howe: The opposite happens; we all got tools that educated us, improved content [desktop pub reference]
Q: So that ad model of the future is verticalization, contextual relevance, and targeting ala IP-TV. Reach is no longer possible?
Gelbaum: Yes. Again, you must consider the interactive nature of search. The cost to get them on IP-TV is low. The data is there. We need to consider the passive, laid-back exposure to advertising, vs. allowing users to ask for information.
Q: Warren, Steve… your rev is not directional advertising; it’s awareness and creative. How attractive is YP advertising, is it appealing?
Schlicting: Absolutely appealing… We bring the local nature of cable, we bring video… there are certain verticals where video is a bonus, upselling classifieds. We bring not only targeting and transaction, but also intent and awareness. You can’t forget about branding going forward; just looks different
Q: So you’ll be involved in the next 12 months
Cook: Cable is local by nature. Feet on the street in all of these markets. How do we get people to transition from buying YP to video. Targeted advertising is very interesting; a little easier to experiment online… some privacy issues on the video side.
Q: Can telecomm make the transition from delivering dial-tone to entertainment, and do they have the right to play in that space vs. MTV, etc.
Gelbaum: They will succeed because they have no choice. They are driven by the realities of the triple plays offered by the cable companies. No reps from telephone companies here. Hearing very aggressive talk; do or die.
Schlicting: Haven’t heard that the RBOCs just want to be a pipe… they want to acquire content, upcharge, etc. Where do they draw the line?
Gelbaum: I don’t see them going into programming. I see them trying to differentiate their offering. We can give you games, movie lsitings, order pizza, unified communications within the home?
Q: When does Yahoo announce Yahoo Studios
Horowitz: If planned, they haven’t told me. We have created a media group, but that’s focused on deals like the Apprentice deal… support and cross promotion of traditional broadcast; partnering with producers of content.
Q: Final remarks
Howe: We’re talking about future possibilities.. the reality is people will do audio search, not video search. 3% of the population is interested in commerce on TV; 11% are interested in games.
Cook: We have to make this as seamless and easy as possible in order to drive adoption. Will people really pay for it? People don’t really fast-forward through programs. [Ed: Huh?!]
Horowitz: I was surprised that the issue of IP didn’t come up more… rights issues, licensing issues, when content moves online needs to be discussed… it actually pushes us toward the Tail, as Tail producers aren’t worried about cannabilizing existing distribution
* These are raw, unproofed notes taken in real-time. Nothing attributed to any speaker should be assumed to be an exact quote. Rather, my goal was to capture and communicate the essence of what was said. If there is a significant mistake, please post a comment or email me; I will make a correction at my earliest opportunity.