Change That Makes Sense - Evan Shapiro

For such a modern industry the Television Business is rife with anachronisms Despite the addition of new technologies new viewing patterns new story telling techniques and new voices many aspects of television are holdovers from the Kennedy AdministrationThe Television Season was invented to coincide with the school year which in turn was originally designed to complement the agricultural economy of two generations ago In 1950s HUT Homes Using Television levels dropped 28 in the Summer months Now there is no measurable drop TV no longer has seasonality therefore a TV season that begins in September and ends in May is as relevant as a buggy whip Since 2004 Nielsen has been able to provide Local Nightly Ratings making the idea of Sweeps just about as useless Yet both of these outdated relics of the medium remainMy 39favorite39 TV anachronism is the quotcost per thousandquot system employed by agencies and networks as the currency of our advertising economy Don39t get me wrong I see nothing wrong with the CPM unit of sale itself Rather my issue lies with the outdated way in which certain 39Cs39 are determined for specific 39Ms39In almost any other business when you pay for 1000 39units39 the cost is determined by the individual value of each unit then multiplied by the total number sold x M CPM The more in demand any one unit or 39thing39 is the higher its cost Additionally the more specific a buyer is about the 39things39 they want the higher the cost of those things they need or want This is how capitalism works Except in TVFor some reason in the TV business the units of TV impressions on Cable amp8211 the most watched programming and the most highly targeted audiences in the medium amp8211 are valued less than those on Broadcast amp8211 whose programming is lesswatched on any given night and whose audiences are appreciably less targetedAs background look at these two chartsAs demonstrated Cable has replaced Broadcast as the dominant force in the medium and offers a much higher delivery of every single audience demographic Granted the audience of any single show on cable is usually smaller than those on broadcast though even that is beginning to change Walking Dead Jersey Shore and Pawn Stars regularly beating lowerrated Broadcasters But as an industry we have to realize that the very definition of a quotlarge audiencequot has changed TV Viewership is asymmetrical amp8211 fragmented by channel choice time shift and demographic tasteThis fragmentation has caused headaches for programmers and advertisers alike yes But it has also allowed television to enter a golden age where content no longer must cater to the least common denominator Artists and channels can now tailor programming to very specific audiences allowing for better storytelling and much more engaged and passionate viewers TV has never been better And nowhere is that more evident than on Cable That is why 37 more people watch those channels every nightAnd while these fragmented timeshifted asymmetrical impressions may be harder for an advertiser to buy amp8211 it takes more time a more granular level of research greater effort to build the right number of GRPs Gross Ratings Points amp8211 it also is far more efficient Audiences are significantly more concentrated than ever before Wannamaker39s old trope quothalf the money I spend on advertising is wasted the trouble is I don39t know which halfquot no longer has to be true Fragmentation is also segmentation and segmentation eliminates the enemy of any media planner amp8211 waste It39s obvious to many amp8211 audiences critics Emmy voters amp8211 that Cable has made the quality of TV better It has made the impressions we sell better as wellYet the way our industry values those impressions and audiences has not changed with the times Broadcasters CPMs average around 35 whereas Cable averages CPMs in the low to mid teens WhyWhy are two thousand eyeballs in A Gifted Man or Blue Bloods estimated CPMs of 35 more valuable than two thousand eyes watching Real Housewives or Pawn Stars estimated at 1517 Tom Selleck39s moustache While Real Housewives does not have as many viewers as A Gifted Man its audience is more targeted more desirable to advertisers and way more engaged the Housewives actually see a 127 increase in C3 versus Live viewing Pawn Stars may not attract more total viewers than Blue Bloods but Pawn regularly attracts more Adults 1849 and a much higher concentration of the most desirable demos Yes without question more people watch Last Man Standing and Rob than see Louie or Portlandia ah America But do we really believe that their audiences are more valuable per person ReallyThere are many ways to spin the answers to this question and the Broadcast networks have been doing a great job of that for years Most often the rationale for pricing disparity focuses on the demographics amp8211 that Broadcast audiences are more upscale and educated than cable According to a Credit Suisse report quotviewers with higher education and incomes watch disproportionately more primetime broadcast as a percentage of total viewing hours than the average TV consumerquotThat is a strong point if you can prove it Trouble is I can find no current data to support that argument The Credit Suisse report is now three years old and offers only anecdotal support for the claim Yes there are many shows on Broadcast with sterling demos ironically those series with the highest income and education indices are also usually the lower rated behaving more like cable shows But with Cable shows like Mad Men American Horror Story The Daily Show Top Chef Beyond Scared Straight Robot Chicken Covert Affairs Leverage and even Portlandia second shameless plug it39s hard to see how that generalization holds waterBut just for one more second look at those charts again As we prepare to enter another upfront one more dear old TV chestnut ask yourself this are you going to believe conventional wisdom or your eyesPlease note I39m not arguing that Cable should be valued more than Broadcast I simply propose amp8211 in a world where the engagement and quality of an audience is ever and ever more important amp8211 that we value each one thousand viewers in a similar way This is about more than what39s right or fair it39s about what39s good for our business Industries must properly adjust to market demands or they will break down If you fail to selfcorrect the market will correct for you In other media hypertargeting and engagement are the most valued metrics It is time for TV to catch up The order is fading and the times they are a changing In order for TV to win in the new order we need to change with themAs president of IFC Evan Shapiro oversees the strategic and creative direction of the network a distinct cable destination known for its indie perspective on what39s worth watching and doing in alternative culture Named to the position in June 2008 he has had a tremendous impact in strategically evolving the IFC brand in response to the rapidly changing programming delivery technologies and industry trends Evan can be reached at EsshapiroifcsuncomRead all Evan39s MediaBizBloggers commentaries at Long Live TVCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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