How well do you know the viewers who watch your channels?
Channel, rather than station. Not all broadcasters work for a local station — you might work for a network, or a broadcast competitor — a channel that is not available to the antenna-impaired.
For local broadcasters, the channel number on each of the cable systems carrying their content is probably more important to their viewers than the one they were assigned by the FCC.
Chances are pretty good that you know a fair amount about your viewers — their age groups and gender, and approximately how many in each group watch the programs broadcast. You might even have some detailed demographic information about the homes in each of the neighborhoods you serve, but probably not how this correlates with ratings data.
But how much do you know about the family that lives at 2006 Main Street? The gender and age of each member of the family? Their annual income? Where they shop and what they buy? Most importantly, how much they watch your channel, and which shows they watch?
Your digital competitors do, and they are getting ready to change the face of TV advertising … one commercial at a time.
Some might say that I have been “going negative” on broadcasters for years. I prefer to think of it as an effort to enable a brighter future for our industry. I recognize, however, that many broadcasters are uncomfortable with my vision.
Recently, someone pointed out that perhaps I should be more politically correct, and come down on both sides of an issue for a change.
Talk about a challenge!
But, believe it or not, broadcasters have plenty to be optimistic about!
The U.S. population has doubled during the time since TV broadcasting came into America's homes. And local broadcasters still play an important role in a growing $40 billion business.
They still enjoy some of the highest profit margins among U.S. businesses. And thanks to the democratization of the tools for content creation, the cost of creating content that may be of interest to today's fragmented audiences has plummeted.
The big media conglomerates are on the defensive, and the politicians are beginning to listen to the complaints from affiliates about the indecent way they are being treated by their networks.
Speaking of politicians, broadcasters are trying to figure out how they can find space for a bumper crop of ads, as the politicians once again spend more money than in the previous election cycle. This time the haul for television and radio advertising is expected to be about $2 billion.
Things are looking even brighter for digital broadcasting. As reported here last month, U.S. Digital Television (USDTV) is launching an affordable multichannel alternative to cable and DBS. The service already has about 800 subscribers in Salt Lake City. For a $99 investment in an HD-capable set-top box, and a one-year $19.95/month commitment, viewers get all local DTV channels and 12 of the most popular cable channels. Service will begin soon in Albuquerque, NM, and Las Vegas, and may reach more than 20 markets within the next year.
Whether the service succeeds or not, it is working to enable many changes to the current broadcast model. It is creating important infrastructures that broadcasters will need to remain competitive in the emerging multichannel digital world. Broadcasters are going to learn a great deal about what will be needed to create a compelling and competitive multichannel service.
USDTV provides the subscriber with support and billing infrastructures that broadcasters lack. It is testing reception in the markets it is preparing to serve and pre-qualifying the neighborhoods where it should be easy to establish reliable service (see the link “USDTV Availability — Reception Maps,” in the “Web Links” sidebar).
Similar to other multichannel services, USDTV subsidizes the cost of HD-capable receivers and installs the receiver(s)/antenna needed to receive DTV broadcasts.
In February 2004, the service provider announced a strategic partnership with Dotcast and Winegard to develop a compact indoor/outdoor antenna, which they expect will significantly improve digital and high-definition over-the-air reception. Based on Dotcast's low-noise amplifier system technology, the companies claim that the antenna will provide omnidirectional reception for markets with geographically separated transmitter sites, yet provide automated directional capability for difficult coverage areas. The new antenna will be manufactured by Winegard; it will be available to service subscribers as a compact, 22-inch tube that can be unobtrusively mounted on a TV set or placed along a windowsill, balcony railing or edge of a roof.
USDTV provides the integration necessary to transform stations that once were competing with each other into a service that competes with cable and DBS. It's converting anonymous viewers into subscribers.
Is video the next print?
Recently the On-Demand and AIIM Conferences and Exposition was held in New York, March 8-10 for members of the digital printing business. These folks have been on the endangered species list for almost 20 years. But this year's conference offered interesting new visions for the future of television advertising.
On-Demand addresses the needs of companies that provide tools for on-demand printing — the subject of those TV advertisements talking about how anyone can be published today. The technology is now being used for massive localization and personalization of direct mail advertising: “Craig, you may already have won …”
AIIM provides tools to many companies for document management and production within corporations, including on-demand printing of manuals and other product collateral. These tools are among those that were supposed to have resulted in a paperless world by now…
The amount of printed paper consumed in the United States actually declined for the first time last year. Traditional printing will never go away, but it is fair to say that this is no longer a growth market. Product packaging continues to be one of the biggest uses of printed paper. This article might reach readers as an HTML or PDF file, rather than the printed version. In a few years, the printed version may be delivered to a flexible display screen that readers can fold up and take with them. And the newspaper boy may be a local TV station.
The Digital Marketing Symposium was created to expose people in the on-demand print business to new opportunities to improve the way the world communicates with digital media. My panel sessions at the conference explored the changes that are taking place with TV advertising as the industry moves from viewers to subscribers, and the possibility that new forms of digital media — including DTV broadcasts — may soon begin to replace traditional printed media.
At the last minute, I added a presentation from Visible World that explored changes to TV advertising.
The presentation and demonstration about Visible World's IntelliSpot products opened many eyes in the audience. IntelliSpot offers a migration strategy from the old analog — every viewer sees the same ad — mind-set, to on-the-fly customization of ads for targeted sub-markets and even individual subscribers. (See Figure 1 on page 18.) The company has integrated the tools used to produce linear television ads with the tools needed to create and manage multiple versions of an ad driven by metadata about the target audiences. The technology is working with both analog and digital cable channels today, and is ready for use in true broadcast applications.
Imagine broadcasting a single MPEG-2 transport stream with multiple PIDs that contain elements of an ad, and the metadata needed to put together different versions of the ad with customized text and graphics. Now imagine a set-top box that can put the right version of an ad together in real time based on the demographics of the viewer. It's all working today.
For the past few years I've been keeping a low profile, watching and waiting for broadcasters to start thinking about the future. I just stuck my neck out and discovered that things look a lot brighter than they have for years. It's time for broadcasters to do the same.
Craig Birkmaier is a technology consultant at Pcube Labs, and hosts and moderates the Open DTV Forum.
U.S. Digital Television
USDTV Availability - Reception Maps
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