Netflix, Cable Companies, and the Evolution of Video

Last week, Wired ran a piece entitled "Netflix Everywhere: Sorry Cable, You're History." It makes a salient point about the contrast between cable's current content-delivery system and the general internet-age trend towards personalization and individualization:

It is odd, in an era when the Internet seems able to worm its way into every part of life, that nearly all of us still watch television the old-fashioned way, piped over cable or beamed in by satellite and available only in bloated packages of channels programmed by network executives.

The point is well-taken. However, I don't buy the underlying premise of the article - that Netflix is in direct competition with cable companies. Netflix is, first and foremost, an internet-based service for renting or watching movies - hence the name Netflix. Yes, Netflix also lets you watch plenty of TV shows, but only after they have been released on DVD. This is fundamentally different from what cable companies offer, which is access to a wide variety of live programming or "new" content.

Rather than framing this as a fight between Netflix and cable, it might be better to think of how cable companies can learn from Netflix's success. And indeed, it seems that they are learning most of the right lessons - several cable companies and Verizon are all launching pilot IPTV programs which will eventually offer much of the same functionality as Netflix, but for new television programming. These services, it seems to me, are likely to peacefully co-exist, and what little overlap there is seems unproblematic.

My hope is that the cable companies really push this effort to its logical conclusion. I recently canceled my cable TV subscription because I found I was wasting too much time watching things I didn't really care about - there were lots of channels, but not much on at any given time that held my interest. However, add a robust recommendation engine and the ability to choose when to watch - an interactive "Dan channel" that would likely consist of the Daily Show, the Colbert Report, the Wire, and sports - and I'd certainly reconsider my decision.

Thursday New Tools Feature: Increasingly Capable Cable

The New York Times reports this week that the cable TV provider Cablevision is introducing a new technology that allows for targeted marketing customized for individual households:

Beginning with 500,000 homes in Brooklyn, the Bronx and some New Jersey areas, Cablevision will use its targeting technology to route ads to specific households based on data about income, ethnicity, gender or whether the homeowner has children or pets.

The technology requires no hardware or installation in a subscriber’s home, so viewers may not realize they are seeing ads different from a neighbor’s. But during the same show, a 50-something male may see an ad for, say, high-end speakers from Best Buy, while his neighbors with children may see one for a Best Buy video game.

While at the moment this only applies for 500,000 Cablevision subscribers in the tri-state area, it seems likely that it will quickly spread. Cablevision intends to expand the service to all of its 3.1 million customers assuming the trial goes well. And initial results suggest that it will:

Cablevision tested the technology by promoting its own services with targeted and untargeted ads. In the eight-month test, the targeted ads brought in new subscriptions at a significantly higher rate than untargeted ads.

Companies, aware that their advertising dollars are threatened by the rise of DVRs, the hyper-saturation of today's media environment, and the drop in impulsive buys due to the recession, are looking for creative and effective ways to market their products more precisely. Those in the political sphere would be wise to take notice as well.

Targeted television marketing is not just limited to cable, either; streaming internet-based TV services, like the upcoming ZillionTV set-top box, allow for similar levels of precision targeting:

The pitch to advertisers is precise targeting: To get high ad prices to pay for all this, ZillionTV will watch your viewing habits, merge them with data about you it buys elsewhere, and use all that information to aim ads at certain groups of viewers. Users will also be asked to select categories of products they would like to see ads about. The ad-supported content will have half the number of commercials as broadcast television, which is still more than online services, like Hulu, have now. And you can’t skip past the commercials.

NDN and the New Politics Institute have long written about the benefits of cable and targeted marketing. Staying on top of television's evolution, as it becomes increasingly personalized and intertwined with Web video, will be critical for any candidate or organization that wants to advertise effectively in a 21st century media environment. 

To learn more about how to target your TV advertising, see our papers "Buy Cable Smart" and "An Introduction to Microtargeting in Politics," and watch this excellent and incredibly enlightening video of Amy Gershkoff of Changing Targets Media from our recent NDN/NPI event, "New Tools for a New Era."



“this business isn’t about G.R.P.’s anymore"

This quote comes from yet another Times piece taking a look at the how the important tool of modern advocacy, television, is being reinvented.

In our work at NPI we've written a great deal about how the hegemony of broadcast television is being challenged by the rise of cable and satellite, digitial video recording devices and other new powerful tools like mobile phones, google search ads and youtube. This article takes a look at how the very economic model of what we have known as "TV" is changing.

Learning about how this very important advocacy tool - TV - is changing needs to be high priority for all of us in the progressive movement, for TV has been the primary tool of political advocacy for the last 40 plus years. The big picture here is that video itself is in the process of being liberated from the monopoly distribution of broadcast, and is increasingly being distributed through satellite, cable, mobile phones and the internet, and thus is becoming much more ubiquitous, accessable and commonplace. There is perhaps no more important and more radical change in modern advocacy than what is happening to what we know as "TV" - and there is much more to come.

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