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Within the television industry there is still a lot of confusion of what the new online world content will look like, but among panelists at the Digital Entertainment World expo Tuesday there was a fair amount of agreement.
The panel experts, which included Chief Content Officer of OMD/The Content Collective Claudia Cahill, CEO of Guggenheim Digital Media Ross Levinsohn and CEO and president of CBS Interactive Jim Lanzone, agreed that high quality digital content will always win over no matter the platform.
“The brands that stick out are the ones that deliver an outstanding user experience,” Levinsohn said. “You really have to do something phenomenal.”
“Abundance is challenging all media right now," Lanzone said. "There is just so many options, there is so much content."
Getting lost amongst the noise is still a huge problem for content creators, Levinsohn said: “What’s awesome about the internet as a consumer sucks about the Internet as a business. If you don’t do something unholy and awesome you’re just not going to stick out; you’re not going to differentiate; you’re not going to be able to get big market share and ad dollars; you’re not going to be able to get big subscription revenue."
So premium content is where the top dollars go. This is not news to anyone in advertising - YouTube’s advertising rates have been trailing television dollars for years. As Jeff Zucker, the former head of NBC Universal and now CEO of CNN, once said, putting content online too often means “trading analog dollars for digital pennies.”
Lanzone said he doesn’t see it that way. Early on, television producers splashed out their content across multiple platforms including Hulu, YouTube and Netflix - they made their content part of the "abundance," a commodity.
CBS focuses on “the strategy of not competing against yourself: when someone wants to watch free television online, they’re going to come to CBS online,” Lanzone said. CBS carefully distributes its content, so it does not dilute its value.
And stronger control of distribution is yielding results: “at this time we are monetizing online at equivalent points to television,” Lanzone said.
However, great content in any category is still no guarantee of profits.
“It’s really organizing it in a way that makes sense for a client” that makes profits, said Cahill. Increasingly that means sponsored content or social media campaigns customized to fit alongside the programming.
“It’s being contextual to that program and being entertaining,” Cahill said.
For a big sporting event, like the 2014 Super Bowl, that meant more in-commercial Twitter references than ever before: "What is it that drives that live viewing? It’s being part of that social media conversation,” Cahill said.
Lanzone also notes, the past three Grammys are part of the top five social media events of all time. The other two are a presidential election and the Super Bowl.
Coincidentally, “these past three [Grammys] are the three highest rated in 20 years,” Lanzone said. “So it’s interesting the social conversation has led to higher ratings, it’s led to more interesting programming.” It’s also led to more profit opportunities.
“We’ve discovered there’s this whole level of fan beyond just your average fan,” Lanzone said. “What we can do online is offer them additional products, additional features, additional content, that they would otherwise [not] have gotten and we work with advertisers around this.”
For example CBS offers an app that allows fans of the Big Brother reality show to watch contestants 24 hours per day, live for $8 per month.
Lanzone admits such apps aren’t for everyone, but creatively engaging fans in deeper ways may give entertainment companies new potential revenue streams.
However, when content isn’t live, but is still of high production value sponsored content is becoming a favorite approach to making profits. One great example of this is Jerry Seinfield’s online show “Comedians in Cars Getting Coffee.” The show starts and ends with a commercial from Acura. Acura also not-so-subtly makes appearances throughout the show, which Seinfield is happy to comment on and Acura is more than happy to be the butt of the joke.
A car commercial on a show partly about cars works. And “it has to work. You can’t just throw any piece of branded entertainment together,” Lanzone said.
That sort of customization means that “it is hard to scale.” Contextual advertising by definition cannot be scaled to the variety of videos on YouTube. So not surprisingly, “people who don’t have premium content will promote programmatic,” Lanzone said.
“Ultimately to build a big business you have to have a business plan that can scale,” Levinsohn said. For premium content providers that means contextual advertising (sponsored content and custom social media campaigns) and for user generated and lower value content that means programmatic advertising.
Ultimately, the panel sees television in transition. They have no doubt that the future is online, but are cautious in embracing online distribution without some serious thought on making profits.
The Digital Entertainment World expo continues February 20 at the Hyatt Regency Century Plaza, in Los Angeles.
