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The Media Crisis, Part 4: Consumers (will people buy their eyeballs back?)

We’re spinning in part because people would universally rather rent their time out to marketers than pay for content. Look no further than the backlash against Murdoch’s call for micropayments to see how sure we are that content should be free … or, by free, I mean, bought by someone else.

Content is cheaper than you think.

Here's some surprising news: it’s not that expensive to pay for your own content. Maybe I should tally your bill.

Ok, let’s borrow from the average prime time, broadcast ad placement (the Cadillac of media buys) and some Pew research about the shocking amount of TV we all consume … ok, divide that, carry the one. Here’s what I’ve got:

And that’s assuming that all the programming we watch is in prime time (the most expensive space). Add in a few repeats of the The Wonder Years and the occasional Sunday morning tour of homes show and I’m betting we can get that number down near $60. And, that’s if we want to buy our content outright vs. share some of our buying power with well-intentioned marketers (like me.)

The trends point to paid content

I think we will pay for it.

And, advertising will have to change.

Five converging trends point the way:

• Failure of the old monetization model: We’ve agreed on that by part 4, right?


• The democratization of access: Less expensive computers, free public WiFi, cheaper home connectivity.  We’re saving where we used to spend big, potentially freeing up resources to pay for the content instead of the connectivity.


• Contracting news space: Consolidation of our news sources has created fewer voices (and oft-repeated content). The number of authors is actually much smaller than the number of venues (fewer owners of ideas = fewer people who have to agree on the cost of content)


• Distrust of traditional media: Pew recently reported that 63% of us don’t trust the mainstream media – a number that has doubled in a decade. That trend is all tied up in our distrust of advertiser influence, corporate ownership models, etc.


• Boredom with reality programming: Where once we were satisfied with strangers sharing a hot tub, now we demand acrobatics and morbid obesity to attract our bored attention. Eventually, the cheapest programming will run out of new tricks.

The Media Crisis, Part 3: Advertisers (looking for their lost sheep)

Advertisers are looking for ways to connect with consumers in an increasingly fragmented and frankly expensive marketplace

The wild west of content

You’ve heard it called the democratization of content. We’re moving from a consumer society to a producer society. Anyone can build a soapbox. And, some of us, can build an entertainment empire.

That’s the second problem. Not enough critical mass.

Or more simply: Too much choice

We all want different content. The web brings us a seemingly limitless supply. Up against pretty flat demand. Not only does the old advertising model not translate to new consumer behaviors, it doesn’t translate for advertisers' bottom lines either.  They can’t routinely get enough of us watching any one thing to deliver a compelling audience share.

According to Nielsen Media Research, in the last reporting period, CBS's prime-time audience was down 2.9%. ABC was down 9.7%, Fox was down 17.5% and NBC was down 14.3%.

We’ve abandoned appointment-TV for downloaded movies; broadcast for cable; the box in the living room for the computer on our lap. We get what we want when we want it – don’t expect us to show up based on the TV guide’s demands. Wait, do they even print that anymore?

Diminishing returns, dwindling investment

If you think publishers are frustrated, you should talk to these advertisers. How do they connect with their consumers when we’re all off in our worlds and fast-forwarding / page flipping / and out-right avoiding even when their ads do come on.

What the law of diminishing returns could not influence, the deep recession has. Now the advertiser exodus, too, is under way. As of mid-February, 71% reported having slashed their 2009 budgets, and 6% more said the cuts were on their way.

How does American enterprise thrive if it can’t connect with consumers?

It’s the under-addressed question in this snowballing crisis. When we talk about consumers paying for content, we skip over how brands get into the conversation. Can we really rely on WOM networks to do the work of mass advertising? Do we all want to turn into blathering mouthpieces for our favorite brands?

The Media Crisis, Part 2: Publishers and Creators (working for scratch)

The fundamental challenge for publishers is actually twofold: Perceived value of content and the age-old story of supply far outstripping demand.

Give us your product for free.

People increasingly prefer their content on demand and on the web. We want to watch TV online. Read news online. Learn how online.

And, we’re used to getting it for free.

For free.

Compare that price to the price of creating content. An episode of CSI costs $2 million to create. Heck, even John & Kate Plus 8 cost in excess of $600,000 per show.

We’ve gotten away with this lasting disconnect by relying on advertisers to foot the bill. By renting out our eyeballs in exchange for our media fix.

We hoped that traditional advertising model would continue to pay for it. Websites charging by how many people might see your banner or video or, oh wouldn’t we like to forget, popup. Traffic would again be kind. Sheer mass would pay the bills.

Problem is: the traditional 30-second spot / full-page print ad model doesn’t translate to our online world:

1. We’re never going to click those darn banners. We are “evolving avoiders.” Wherever the ads are, over time, our eyes learn to skip over. By consistently displaying their texty little ads on the right rail, Google actually changed how we view web pages.  No longer do our eyes travel in that easy backwards C. Now we dart across web pages in a quick F shape, using an evolved blind spot to skip the right rail.


2. There aren’t enough of us to watch in-stream ads. The one bright spot in online advertising has been integrating video advertising into programming. The recall is higher; the brand interaction better. So much so that advertisers will pay more for every set of eyes (vs. television). But, they can’t get enough critical mass online around any one show to meet the production budgets of America’s prime time favorites: CSI, House, Gossip Girl. (Oh, how I love Gossip Girl)

Where does the money come from now?

How do producers fund programming as the Internet shifts from being media’s value add to its prime outlet? We haven’t figured out how to price it or even who to charge.

They call it a problem of monetization. Bob Garfield gets a little pluckier and simply decries that” we are, most of us, exquisitely, irretrievably fucked.”

Here-here.

The Media Crisis: Part 1, Overview of an Implosion

While I’ve been busy typing away about the promise of micro marketing and social media, mass media – the ideas and entertainment at the center of our culture and economy – has been in a tailspin of irrevocable change.

The crumbling empire

In the last year, we’ve seen a number of incredible publications shuttered. Watched online video tools evolve to the point that any savvy teenager can create her own television network on her desktop. Seen ad budgets cut by 30% across the board and experienced our personal ad avoidance strategies boom.

Layoffs in the tens of thousands. News bureaus closing around the world. Entire publications – from Domino to the Rocky Mountain News – shut down. Others – like the Seattle Post-Intelligencer and the Christian Science Monitor – giving up the printed page and going web-only. Meaty prime time programming replaced by cheap reality shows. Even the Once-Evil-Empire Clear Channel has been hobbled by a commercial paper rating that’s just north of “junk.”

Defining the post-advertising era

This isn’t the future. It’s the media crisis that’s happening right now. Things are changing. And there’s no consensus about what the next era will look like.

To me, this is the start of the post-advertising era. The dot-bomb of the 21st century. The time when content creators, advertisers and even consumers will struggle to find a new model for how we create, fund and find quality entertainment content and trusted sources of news and information. It's a massive realignment. And, one that we cannot see the end of today.

In the next three posts, I’ll take a look at the crisis from the point of view of each of the key players:

• The publishers and creators
• The advertisers
• The consumers