This is great but let me be just a tiny bit negative for a moment-
But before I do that, let me just brag a bit that I said this would be happening 3and4 years ago when everyone told me DBS would NEVER solve the bandwidth problem by launching more satellites. Their reasoning... Outer space is already filled up!
OK back to forward thinking negativity-
I believe that marketing and technology are closely intertwined with sophistication of the viewer. Here's what I mean by all this: Today's Broadcaster is still running on 1950's business model and DBS is reacting to this business model with 21st century space age technology. The 1950's business model for broadcast TV is simply Programming paid for by sponsorships divided up by programs with the ubiquitous 30 second spot. Nearly all TV is done with this business model, even most "cable channel networks" And this is the sole basis for DirecTV spending billions to perpetuate the unnecessary redundancy of network locals into each market. The programming is basically the same but the 30 second spot breaks are what varies from market to market. Now we have D* retransmitting hundreds of channels, soon to be HDTV channels that have identical programming but different spot breaks for the majority of the broadcast day. Also would be some minimal local produced programming as well such as NEWS. BUT, even News is mostly national redundant subject matter done with a local face, only local news is really unique to local TV. That represents an extremely small portion of the broadcast day that requires the local TV station.
With me so far? OK, now consider the sophisticated TV viewer who is rapidly becoming a 21st century TV viewer, not tied to the 1950's Broadcast TV business model. This viewer, today has broken from a habit and restriction to watching live TV of just a few channels to hundreds of cable networks, DVD's and Computer Internet news sources. Plus, a growing portion of the viewing public has discovered the TIVO mindset of 30 second commercial skipping and time shifting viewing. This completely eradicates the 1950's Broadcast TV business model. Soon a totally new addition to viewer options will be added to compete even with our present evolving DVRs. This is VOD. VOD, we are discovering, is THE most exciting new evolution to the 1950's style TV broadcast business model. Unfortunately, it leaves 1950's vintage broadcast TV station in the dust. They have no way to accommodate this technology and will become a relic of the industry unless they find a new purpose and a new revenue stream to pay for it. First blow is being done with the TIVO mindset viewing and the second blow will be with the advertiser base moving to VOD.
OK let me define this further for anyone who is getting lost here. Why, you might be asking, or how, would VOD work for advertising? Why would I want to watch TV commercials on VOD? In order to keep up you have to broaden your scope of all this technology and try to think like a businessman who's former advertising market strategy has been the 30 second spot on local or even network TV. These businessmen are well aware that their ad cost per impression is growing due to the information explosion and their increasing cost per Impression on local broadcast TV due to a lower viewership. These businessmen are in search of ways to get their message out to the viewer in a more EFFICIENT way. VOD offers this in that the new 21st century TV broadcast business model uses a new concept- Advertise your products and services directly to those people who actually want to BUY your product. Oh how novel this is. The old way was to annoy a viewer with a 30 second commercial whether he was a potential buyer or not. The net result was, in the old days, to get up and go to the bathroom or go get another beer. The newer viewer just clicks his TIVO and skips ahead to the show as he is watching on time delay TIVO anyway. Either way the only time a business's 30 second spot is viewed, is by a potential buyer anyway, so why not just pay to target that ad to the people who actually WANT to watch your spot; and, buy your product? But here's the problem- How do the people know where that spot is? Is there enough information contained in a 30 second spot for the interested buyer? Fortunately we don't need to lay the groundwork on this question. The answer is simple. The 30 second spot is best replaced by the half hour or less infomercial. We know these work because they can be made engaging to hold a buyer/ viewer's attention, but only a viewer who may consider buying the product will be watching anyway. Enter the company web site. This has shown that people actually do strive for advertising and they are people who are actually potential customers for your product or service. All that is missing is VOD. Today, my company offers this VOD and we are seeing a huge desire to get on board with this concept. We haven't abandoned the 30 second spot, nor the half hour direct response infomercial but we have added the VOD product for as much as our current technology will permit. What we see is VOD on the internet and for certain types of programming, VOD for higher resolution satellite(a thing of the future).
We believe that VOD along with the internet will soon bankrupt local TV business model. It won't be the viewers lack of interest alone that will kill it but it will be the advertising base these stations rely on that will be dwindling as they too discover targeting their ad $$ directly to people who actually want to buy their product.
If I lost you on this- follow this example- You need to buy a new hard drive, what do you do? Learn about what's the latest by just happening to see a TV ad from Maxtor on TV? Fat chance you will actually see that when you need to make a decision on what and where to buy. No, today you'd probably do a google search for it and read advertising on the internet. Maybe the Maxtor website has a few VOD videos on that website to watch to convince you their product is better than Western digital or other competitor. You make a choice and can place an order directly while there. How about another product- Mastercard from Bank of America- You are looking for a creditcard with certain features. Consider the idea of a VOD on DBS where as part of that system you go to the menu and see an index of VOD content that reads-
infomercials
Banking
Credit Cards
Mastercard
BOA
Wachovia
MBNA
So you select BOA and watch the ad and respond with a direct link to their website and order up a new credit card for yourself.
I think you see what our future will be all about soon as it pertains to TV and how we view it. All this is that DBS's will have this new capacity for the future but local redundant broadcast TV can not and should not be what they nor you should be banking on. VOD is the way that all TV can survive when the viewer is in control. My TV broadcast consulting business has been pushing this idea now for several years. It is being received by small business with great success. The hardest part is making the businessman who has been brainwashed into the "there is no other way" mindset in seeing the future and what works. A 54 year old business model is not easy to change but it will be the people who will force it's change. It will be people like me in the business who will respond to this desire for change. We do not fear the demise of the 30 second spot or local TV station revenue stream, we embrace it as a new opportunity to create new ways to advertise more effectively for the small and general business that makes our country great. The DBS and D* response to adding these new channel capacities is a big step toward VOD possibilities. Putting up redundant programming from Local broadcast and TV networks is just a short sighted stepping stone to the real future of TV and how we watch it and how it is paid for.
But before I do that, let me just brag a bit that I said this would be happening 3and4 years ago when everyone told me DBS would NEVER solve the bandwidth problem by launching more satellites. Their reasoning... Outer space is already filled up!
OK back to forward thinking negativity-
I believe that marketing and technology are closely intertwined with sophistication of the viewer. Here's what I mean by all this: Today's Broadcaster is still running on 1950's business model and DBS is reacting to this business model with 21st century space age technology. The 1950's business model for broadcast TV is simply Programming paid for by sponsorships divided up by programs with the ubiquitous 30 second spot. Nearly all TV is done with this business model, even most "cable channel networks" And this is the sole basis for DirecTV spending billions to perpetuate the unnecessary redundancy of network locals into each market. The programming is basically the same but the 30 second spot breaks are what varies from market to market. Now we have D* retransmitting hundreds of channels, soon to be HDTV channels that have identical programming but different spot breaks for the majority of the broadcast day. Also would be some minimal local produced programming as well such as NEWS. BUT, even News is mostly national redundant subject matter done with a local face, only local news is really unique to local TV. That represents an extremely small portion of the broadcast day that requires the local TV station.
With me so far? OK, now consider the sophisticated TV viewer who is rapidly becoming a 21st century TV viewer, not tied to the 1950's Broadcast TV business model. This viewer, today has broken from a habit and restriction to watching live TV of just a few channels to hundreds of cable networks, DVD's and Computer Internet news sources. Plus, a growing portion of the viewing public has discovered the TIVO mindset of 30 second commercial skipping and time shifting viewing. This completely eradicates the 1950's Broadcast TV business model. Soon a totally new addition to viewer options will be added to compete even with our present evolving DVRs. This is VOD. VOD, we are discovering, is THE most exciting new evolution to the 1950's style TV broadcast business model. Unfortunately, it leaves 1950's vintage broadcast TV station in the dust. They have no way to accommodate this technology and will become a relic of the industry unless they find a new purpose and a new revenue stream to pay for it. First blow is being done with the TIVO mindset viewing and the second blow will be with the advertiser base moving to VOD.
OK let me define this further for anyone who is getting lost here. Why, you might be asking, or how, would VOD work for advertising? Why would I want to watch TV commercials on VOD? In order to keep up you have to broaden your scope of all this technology and try to think like a businessman who's former advertising market strategy has been the 30 second spot on local or even network TV. These businessmen are well aware that their ad cost per impression is growing due to the information explosion and their increasing cost per Impression on local broadcast TV due to a lower viewership. These businessmen are in search of ways to get their message out to the viewer in a more EFFICIENT way. VOD offers this in that the new 21st century TV broadcast business model uses a new concept- Advertise your products and services directly to those people who actually want to BUY your product. Oh how novel this is. The old way was to annoy a viewer with a 30 second commercial whether he was a potential buyer or not. The net result was, in the old days, to get up and go to the bathroom or go get another beer. The newer viewer just clicks his TIVO and skips ahead to the show as he is watching on time delay TIVO anyway. Either way the only time a business's 30 second spot is viewed, is by a potential buyer anyway, so why not just pay to target that ad to the people who actually WANT to watch your spot; and, buy your product? But here's the problem- How do the people know where that spot is? Is there enough information contained in a 30 second spot for the interested buyer? Fortunately we don't need to lay the groundwork on this question. The answer is simple. The 30 second spot is best replaced by the half hour or less infomercial. We know these work because they can be made engaging to hold a buyer/ viewer's attention, but only a viewer who may consider buying the product will be watching anyway. Enter the company web site. This has shown that people actually do strive for advertising and they are people who are actually potential customers for your product or service. All that is missing is VOD. Today, my company offers this VOD and we are seeing a huge desire to get on board with this concept. We haven't abandoned the 30 second spot, nor the half hour direct response infomercial but we have added the VOD product for as much as our current technology will permit. What we see is VOD on the internet and for certain types of programming, VOD for higher resolution satellite(a thing of the future).
We believe that VOD along with the internet will soon bankrupt local TV business model. It won't be the viewers lack of interest alone that will kill it but it will be the advertising base these stations rely on that will be dwindling as they too discover targeting their ad $$ directly to people who actually want to buy their product.
If I lost you on this- follow this example- You need to buy a new hard drive, what do you do? Learn about what's the latest by just happening to see a TV ad from Maxtor on TV? Fat chance you will actually see that when you need to make a decision on what and where to buy. No, today you'd probably do a google search for it and read advertising on the internet. Maybe the Maxtor website has a few VOD videos on that website to watch to convince you their product is better than Western digital or other competitor. You make a choice and can place an order directly while there. How about another product- Mastercard from Bank of America- You are looking for a creditcard with certain features. Consider the idea of a VOD on DBS where as part of that system you go to the menu and see an index of VOD content that reads-
infomercials
Banking
Credit Cards
Mastercard
BOA
Wachovia
MBNA
So you select BOA and watch the ad and respond with a direct link to their website and order up a new credit card for yourself.
I think you see what our future will be all about soon as it pertains to TV and how we view it. All this is that DBS's will have this new capacity for the future but local redundant broadcast TV can not and should not be what they nor you should be banking on. VOD is the way that all TV can survive when the viewer is in control. My TV broadcast consulting business has been pushing this idea now for several years. It is being received by small business with great success. The hardest part is making the businessman who has been brainwashed into the "there is no other way" mindset in seeing the future and what works. A 54 year old business model is not easy to change but it will be the people who will force it's change. It will be people like me in the business who will respond to this desire for change. We do not fear the demise of the 30 second spot or local TV station revenue stream, we embrace it as a new opportunity to create new ways to advertise more effectively for the small and general business that makes our country great. The DBS and D* response to adding these new channel capacities is a big step toward VOD possibilities. Putting up redundant programming from Local broadcast and TV networks is just a short sighted stepping stone to the real future of TV and how we watch it and how it is paid for.