Anything Goes : Branded Content and Future of TV pondering... by Richard Kastelein

My thoughts from a recent discussion in Branded Content Group in Linkedin. _________ Brands are currently in a state of flux. And like everyone else are unsure how to move forward. Probably because many, like me, think the traditional value chain is gone within ten years, maybe five. For a number of reasons. Both print and music have been hit incredibly hard by the web and there’s no reason to think that TV is immune from rapid and enormous change to the current value chain. Direct to Fan, live and merchandising is what is now feeding the music industry. The reduction of scarcity in recorded music is what killed it. Bands from the last millenium are having to drag out their creaky old bodies on tour and play in front of grey hairs to pay the bills because royalties are sinking. With the internet and TV colliding, and consumers demanding what they want, when they want, where they want on whatever device they are carrying or watching at home - the old way of doing business is going to change. And change fast. Everywhere. While all current trends indicate that TV and advertising spend are still vital components of the media marketplace, TV viewership does face a huge number of challenges, including audience fragmentation (both more TV content and more entertainment alternatives - gaming, social media etc.), technology-enabled time shifting, and the disruption of media stacking or mobile/tablet multitasking. The rise of the second screen: • In the US, 77% use TV & internet simultaneously (Nielsen) • 50% do so every day (Google/Clustalabs) • 87% of US smartphone and 88% of tablet owners use it while watching TV (Nielsen) • 44% of total tablet usage is while watching TV (Nielsen) • 72% of under 25’s in the UK comment on programs via social networks (Digital Clarity) • 62% of TV viewers pick up the phone as soon as TV advertising break starts. (Nielsen) Developments in technology are impacting TV advertising effectiveness and the dramatic rise of connected mobile devices is leading to an increasingly distracted use of TV. Digital technology has also accelerated ad avoidance through time shifting and on-demand viewing, and has enabled a significant amount of fragmentation due to sheer volume of content and niche. All these developments work together to degrade the value of TV ads and are deeply affecting the TV industry as scarcity is removed due to IP delivered content. There's too many people in the chain that are happy with the status quo at the top. The walls are high. But building higher walls is not the answer. It’s not going to ‘save’ the TV industry. Innovation will. And face it. We are moving from a one to many to a many to many world. There are thousands of people making over 100k per year on Youtube today. Google owns the digital cricket rights in India. They or Apple or Microsoft or probably even Netflix (larger than any cable company now in the USA) could outbid any of the networks for content. Sure many deals, particularly in sports, are locked in for at least five to ten years by the likes of Sky/Fox/NBCU/CBS etc. I reckon brands are going to just be forced to change, soon, against the resistance of many who are quite happy with the way things are. Look at the newspaper business. Print media. So those of us that are trying to understand this emerging disruption, and working hard to lobby brands and agencies as content producers... to get them to look through a different lens and think out of the box - are the ones who will be part of the evolution, rather than extinction. I heard from a reliable source that one major player in the production world is now going to allocate 5 percent of all budget to second screen and social TV strategy alone. Not 'internet' or 'digital'. But real time engagement, contextual content, gamification and relevant 'second screen' Apps. It's a start. Brands have more options now. And it's not just consumer side hardware and software that are moving the goalposts. Hardware like 16mm cinema quality compact DV cameras for under 1000 dollars. http://www.blackmagicdesign.com/products/blackmagicpocketcinemacamera and the even more affordable Gopro Hero http://gopro.com/cameras/hd-hero3-black-edition Not to mention amazing software such as Final Cut Pro, Sony Vegas etc. that allow for brilliant editing. Kids are cutting in their basements. On a personal note, my youngest daughter, now six, has been editing her video on the iPad since she was five. All three of them use http://www.apple.com/ilife/imovie/ Not to mention what is going on in Machinima ( http://en.wikipedia.org/wiki/Machinima.com ) where people are creating, telling and recording stories in virtual world's like Second Life. http://vimeo.com/lainyvoom - anything by Lainy Voom is well worth watching. Particularly Push http://vimeo.com/5543976 The numbers for the Machinima empire are in a league of their own. http://www.youtube.com/user/machinima Network Channels: 7,472 Network Videos: 1,716,999 Network Video Views: 39,433,134,950 Network Subscribers: 205,483,577 One billion views will be likely be hit in 2014. Not bad. Mass reach via audiovisual is finding new homes. Need a teaser or sizzle reel? Shoot it yourself. Or even do it in Machinima... The entry barrier has come way, way down. Reminds me of Time's 2006 cover. http://farm2.staticflickr.com/1367/852706473_97a812c11f.jpg Basically. What I am trying to say... is that if you have strong Social TV, Second Screen, Transmedia Storytelling concepts and technology in your pitch, you have a better chance with all your formats, ideas, and concepts with anyone in the value chain from production companies, to broadcasters, agencies and brands. The numbers from Nielsen speak for themselves. My two cents... Cheers Richard Kastelein Netherlands/UK Founder http://www.appmarket.tv http://www.hackfest.tv/northamerica http://www.richardkastelein.com/services http://www.agoramedia.co.uk