Terrence Oprea, President and CEO of Mort Crim Communications, is a 30-year veteran of broadcast television and radio programming. He is also Managing Partner in the firm that he’s been with since it opened its doors in 1993. He’s responsible for daily direction and management of the company.
Terry’s career has included major positions with Post-Newsweek Television (executive producer, WDIV (NBC)); Time-Life Broadcasting (News Editor, WOTV (NBC)); PBS (V.P. for National Programming, WTVS); and NBC Elections (state supervisor, Indiana). During his tenure with public television, Terry served on the board of directors of Frontline, the international award-winning PBS documentary series.
At MCCI, Terry has authored more nearly 40 magazine cover stories during the course of his career. He’s also presided over significant New Media content initiatives, including online corporate communications ventures for major international automotive firms, retail organizations, and health care entities.
Terry has also presided over a number of national programming successes while leading MCCI, including Better Investing (13 parts; national public television syndication) Act Against Violence (PBS 2-hour national special); and Learning Theory and Classroom Practice (13 parts for Corporation for Public Broadcasting), and many others.
He is winner of numerous national awards for excellence, including the American Bar Association’s prestigious Silver Gavel award; the National Headliners award; UPI’s top national award for documentary programming; Two first place national Angel awards; the Crystal National Communicators award of excellence; six regional Emmy awards; and numerous other accolades.
Terry is active in the community, and serves on the board of directors of The Heat and Warmth Fund, the Detroit Regional Chamber of Commerce, Detroit Area Boy Scouts, Junior Achievement, and the Skyline Club.
Terry will be writing about the changes and challenges traditional media face as technology and the Internet rewrite many of the rules.
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In my previous blog I mentioned that Big Media in metropolitan regions tend to spend a lot of cash actually creating product. And advertisers even locally spend a significant amount of cash on spots and print ads. Which is the sixth reason Big Regional Media are freaking out:
6. The cost of production in print and broadcast media far outstrips the cost of production on the web
…which raises another big question: If digital content consumers demand lots and lots of it in short doses, how can Big Media create that kind of content volume – especially in rich video and audio media – at a dramatically lower price? To do so would require a sea-change in the way that video and audio content is produced.
The sad news is that most of the mainstream video producing organizations, Ad Agencies and TV stations have not adapted well to cost reduction necessities. Though newspapers have ironically been quicker on the uptake, they admit their video products still have a long way to go in many cases.
The smart organizations have gotten rid of the $50,000 to $250,000 field videocam packages and replaced them with smaller digital video cameras that cost as little as a few thousand dollars. These same smart organizations no longer staff video shoots with 4 or 5 or 6 people. They use one person, maybe two. Further, rapidly going away are the giant, impressive editing suites that cost several hundred thousand dollars – in favor of laptop or small desktop editing configurations that deliver the same basic result for pennies on the dollar.
So do consumers know the difference? They actually prefer lower production value in local media – while being suspicious of high-end video productions in a local environment. Why? Because they smell marketing when they see slick stuff.
Cost of video production has been overpriced and inflated for years – driven by Ad Agencies. Some of the post-production facilities that cater to the big Advertising gurus charge astounding per-hour fees, while getting the agency producers to give them the business through certain “environmental incentives”. For example:
If prolific video content is going to be evident, the cost to produce it has to be low. Giving away free booze just inflates costs further.
- Catering free, sumptuous meals at all times of the day.
- Providing unlimited free beer, wine, et al during the work day in their facilities
- One facility built a full service mahogany bar and lounge in their offices, with unlimited hard liquor and snacks – no extra charge, of course.
But why do I keep harping about video and audio content on the web? Is it really that important?
It’s far more important than Big Regional Media truly understands. For example, the number of seconds of video downloaded or streamed from the internet in the first 6 months of 2007 was 175% greater than the previous six months. And I’m willing to bet that when the data comes in for the last 6 months of 2007, the number will increase by another 250% to 300% over the first 6 months of 2007.
This wildly growing appetite for online video is fueled by several factors:
Soooo….its not just about the Internet – but also about video and audio on the Internet. If you’re weak in that area, you’ll struggle to grow loyal, unique visitors.
- Computer technology becoming a commodity. All computers and laptops – even the cheapest ones – now have video cards and huge amounts of RAM with a range of video software, media players, Flash, and what have you, to accommodate video and audio online.
- Bandwidth continues to grow exponentially year to year, allowing easy, seamless video playback, download, and streaming.
- Video compression technology continues to become more sophisticated and efficient, allowing more video content with larger pictures on your desktop or laptop.
There’s one final reason (#7) Regional Media are Freaking Out – and ironically, its something reserved for local TV stations – something that they have no control over:
#7. Local broadcast TV stations have been forced by law to invest in digital transmission technology that some argue will be outmoded before it even has time to take root.
All local TV stations have been required to convert their transmitters to digital technology. By the beginning of 2009 all television transmission must be solely digital. That mandatory conversion has cost local broadcasters hundreds of millions of dollars in operating and capital expenses in order to make that conversion.
Going to mandatory digital transmission originally seemed like a good thing to do at the time it was put into law years ago. It was supposed to enable TV stations to split into multiple sub-channels. It could enable them to serve specific smaller user groups in their respective regions with unique programming, rather than the “one size fits all” approach to each station’s programming schedule as they currently exist.
The problem is that fewer and fewer viewers get their TV from broadcast signals. Mostly it’s picked up off of cable. It’s true that cable operations are more or less required to carry local TV stations’ primary signals – but it remains to be seen what the arrangement will be when TV stations start trying to produce digital programming that goes beyond their normal signal.
Some futurists argue that the Internet’s appetite for video is growing at such a breakneck speed that it will eventually eclipse traditional broadcast programming. If that’s true, both local broadcasters and daily newspapers will be well-positioned with their Internet properties – but only if they solve all 7 of the challenges I’ve described over the past 5 days.
The Victors in all the Freakout chaos will go to those who look at content, production economics, and human behavior as one picture – one that is constantly changing. That means Big Regional Media need to be in a continual state of reinvention and experimentation in order to attract people, loyalty, advertisers, and ultimately, profitability and success.
And that, of course, means continual risk-taking with eyes wide open.
Everyone’s talking about content these days. Very few really understand that the one thing that is least valued in the advertising community is the most priceless commodity to the consumers who are moving to digital communication in droves.
So with that in mind, here are Unlucky Reasons for Media Freakout numbers 4 and 5:
#4. Traditional advertising creative messages don't pass the authenticity smell test because they consist of mostly made up content or redundant cloned messages - not "found" real-world content.
#5. Traditional media only "presents" a small menu of homogenized content because it’s structurally and economically impossible to do otherwise.
The word "content" has been severely bastardized because it has been put in a box and limited. If you have a 30 second commercial that an advertising writer made up out of the clear blue in order to be imaginative and unique, that would be called “rich content” by writers, producers and agency chiefs hawking their wares.
But that is far from the kind of content that attracts the new kinds of readers, watchers and users on an ongoing basis. Why? Because 30 seconds of one message or a singular ad becomes useless very, very quickly, and for a number of reasons. Let me list them:
1. Our capacity to absorb volumes of content in a multitask environment is much, much deeper and broader than it was 20years, ten years, five years, and even one year ago. Think about how it feels to be going 75 on the freeway and then being forced to go 5mph for even a small period of time. You get frustrated and even surly. Same deal with limited, uni-dimensional content.
2. Same holds true with print advertising. Though print advertising can still be very effective in some venues, the print venue has even more severe challenges. First, the so-called "read-through" rate in print publications has been a huge problem. In some daily publication there's a 30% to 40% drop in readership when you go from Page One to Page Three. And that's not even talking about advertising messages - that read-through drop-off even includes editorial content in most places.
3. The second print problem goes back to that pesky "filtering" issue. Many readers easily and seamlessly scan through newspapers, focusing only on the headlines that are most important to them. These days many are not only ignoring ads, but are not even consciously aware of their existence in many cases. That's how sophisticated the filtering instinct has become among readers.
4. The advertising world today thinks of itself as sort of a miniature Hollywood culture. Movies. Movie Stars. Celebrities. High-priced commercials. Or “creative” ideas pulled right out of someone’s…er….imagination.
The problem is that consumers know the difference between Hollywood made up stuff and commercial made up stuff. More and more consumers just aren’t buying it when you’re trying to sell them something.
That doesn’t mean that commercial messaging is dead. Far from it. It’s just that it will eventually be dead if advertisers don’t get on the content bandwagon. The problem is that most Ad Agencies are ill-equipped to find authentic content spontaneously, while having that authenticity regularly interact with their brands.
A number of firms have tried it with entertainment programming – and with few exceptions, they’ve failed miserably, while spending a ridiculous amount of money. Some of the automakers have done it. Go ahead and ask them how it all turned out.
The key is REAL, not contrived. Spontaneous reality, not manipulated like the mind-numbing reality shows that are pandemic today. Low production values – not Hollywood. Stuff that really IS the way it really is, while spontaneously reacting to and interacting with the retailer or product or what-have-you. It takes a journalistic sensibility to do that – not an Ad Agency sensibility.
You have to produce or create lots and lots of that kind of content, using primarily rich media (audio and video) in a digital distribution environment. Instead of a bunch of 30 minute episodes of reality, consumers like boatloads of 90 second to 2-minute episodes of serialized content.
So that brings me to a fundamental weakness traditional TV and Print publications have (Freakout Reason #5):
5. Traditional media only "presents" a small menu of homogenized content because it’s structurally and economically impossible to do otherwise.
Local TV only has 24 hours of programming, in real-time. Though you can easily Tivo any of the programs you want, the stations only acquire and produce enough programming to fill 24 hours. And most of that is off the shelf syndicated stuff, network material, and infomercials. News and special events occupy the rest. Never mind that today there is maybe 4 times the amount of news on a given local channel with a new reporting and producing staff that is generally 40% smaller than it was 20 years ago.
The fact is that the demands for increased profitability from TV’s mostly publicly held conglomerate owners as well as prohibitive labor agreements make it extremely difficult to meet the local demands for more and more and more content. Much of it on the air is simply repeated, which again fails the smell test for new information consumers.
Newspapers have even more obvious problems. It costs money to print papers. It costs money for ink. The bigger the paper, the more it costs to publish. Newspaper size is driven by ad revenue, period. No ads to fill those pages, and suddenly the amount of news content permitted in the paper shrinks dramatically. Limited content, again, smells bad.
But there is hope amid the challenges! Stay tuned for my last two Media Freakout Reasons in my next and last blog…
OK, so now you understand a little about filtering (see previous blog). But how does that translate into Unlucky Reasons for Mainstream Media Freakout #2 and #3? Just a reminder - here they are:
#2. Users are moving to digital quickly - but ad dollars aren't.
#3. Digital users are actively, aggressively looking for authentic content. They become dissatisfied when its not there.
First – why in the world are ad dollars not moving to the web fast enough to keep mainstream regional media happy? After all, they own the most popular local web sites in just about any region in the US. In Detroit, millions and millions of unique visitors each month, and millions of page views each day! What’s the problem here?
Don’t get me wrong – ad dollars on the internet continue to grow every year locally, regionally, and nationally, at a significant pace. But when you look closely at the kind of ad dollars involved in placing major marketing ad schedules on local TV stations and daily papers – and then compare what the going rate is for banner ads on their web sites, the profitability of web ads for the advertising industry is not significant enough to sustain the expected year to year growth the media properties have come to expect.
You can look at this any of three ways. Either 1) the cost of web ads have been an absolute bargain and should really be much higher to be aligned with the marketplace; 2) television and daily newspaper ads have been ridiculously overpriced compared to the value they offer; or 3) web ad prices are about right because the cost of production and distribution of web content is much, much less than for the broadcast and newspaper counterparts.
I happen to lean toward the third option. But that’s probably of little comfort to terrestrial regional broadcasters and daily newspapers who are trying to transition to web-based economic models while holding on to their still profitable traditional TV stations and pulp paper machines.
The problem is that those Big Media have shareholders. Most are publicly held. They’re expected to reach gross profit and revenue goals year to year. And generally those profits and revenue goals are expected to rise or get greater in each succeeding fiscal year.
So there’s the conundrum. There’s the cash squeeze. Audience and readership is trending to their web sites. The ad dollars going to their web sites is dwarfed by what they charge for ads in their flagship high-overhead traditional media operations.
But that's just a piece of the problem - which leads to Unlucky Freakout Reason #3:
3. Digital users are actively, aggressively looking for authentic content. They become dissatisfied when its not there.
The operative word, as I said in an earlier blog, is “looking” for authentic content. Remember the song 100 Channels and Nothing On? Back in the day, everyone laughed knowingly at the song’s premise. We laughed because we had days where that was true. But we also laughed because it seemed like lunacy at some level – just a ridiculously unlikely yet inexplicably common circumstance.
Flash forward to today. It’s unlikely that a laughably credible song like Ten Billion Channels and Nothing On would be a hit, because there's no truth to it.
There’s a big difference between watching and looking. On traditional live TV, we watch. Sure, we browse through a few (hundred) channels at times – but ultimately we usually make a decision to watch something. And then what do we do? We wait for whatever it is to come to us (including ads).
But the DNA of a web or Video on Demand user is different – way different. They’re actively, voraciously looking for content. They’ll make sometimes scores of content and site choices in a relatively short period of time. Because they’re not passive users, they don’t look for things that don’t appeal to their aggressive appetite for content discovery. And since they know they have a truly unlimited range of content options, they never settle for less than that which satisfied in the short term.
And guess what generally doesn’t appeal to that appetite for content on the web? Advertising that does not meet their interesting and aggressive content criteria.
Sure, there are notable successes online. Mortgages. Insurance. Certain kinds of retail. Remember the question isn’t “Do I hate advertising”. The question is, “Does advertising involve authentic, constantly changing, provocative content?” If the answer is “no”, the advertiser loses in an active medium like the internet.
More on my 7 Unlucky Reasons for Mainstream Media Freakout next time….
So.....why, why, why are traditional regional media (like in Metro Detroit) freaking out? Let me count the ways. First, I'll list my Unlucky 7 Reasons - then I'll explain them in this and other subsequent blogs.
Here they are:
1. All audiences and users have become experts at "filtering" ad content, where the operating cash comes from.
2. Users are moving to digital quickly - but ad dollars aren't.
3. Digital users are actively, aggressively looking for authentic content. They become dissatisfied when its not there.
4. Traditional advertising creative messages don't pass the authenticity smell test because they consist of mostly made up content - not "found" real-world content.
5. Traditional media only "presents" a small menu of homogenized content because its structurally and economically impossible to do otherwise.
6. The cost of production in print and broadcast media far outstrips the cost of production on the web
7. Local broadcast TV stations have been forced by law to invest in digital technology that some argue will be outmoded before it even has time to take root.
OK, lets start with Unlucky Reason #1: All audiences and users have become experts at "filtering" ad content, where the operating cash comes from. That's one reason why advertising is becoming less and less effective. That's why Ad Agencies' business and retail clients have become more and more demanding for results. They've tightened business terms. Forced business outcomes to be tied to revenue for the Ad Agencies. Required more aggressive Agency cancellation clauses.
Quite simply, big firms and small are generally unsettled and unhappy because they're spending more and more money in traditional media while generally getting a lower return on investment in results. My firm, MCCI, is not an ad agency - but we develop lots of content in broadcast, print and internet forms. The most common client complaint is this about their Ad Agencies: Why oh why do we have to spend more and more money to get more frequency of messaging reaching fewer and fewer people?
There are two big reasons for this. The first is that even though some commercials and Ads hit the big-time and become part of our cultural DNA, a dramatically growing number of people want to avoid commercials at all costs. Actually, I believe all media consumers have become, by necessity, extremely sophisticated in their behavior. Basically, if there's no authentic, regularly changing ad content involving a brand, there's a very reduced consumer desire to see/read/hear those ads and commercials.
The old way of thinking was/is this: create a message or two or three, and repeat that same message zillions of times so that a percentage of the passive users seeing the message will retain it (hopefully) after seeing it endless times, and then act on it. That approach still works, but for a constantly declining percentage of the population. Why is it declining? One reason is that a growing number of us hate redundant message cloning. Its gone beyond boredom - with some, like my 20-something kids, it becomes a matter of intellectual principal - almost an insult to allow that kind of redundancy when you clearly have the option not to let it happen. So where do they go? To places where they control the agenda and aren't passively exposed to messages that aren't interesting - AKA the web.
The second reason, of course, is simple: Media are now irreversably, severely splintered. Up to 400 or so channels on digital cable. Billions of choices on the Internet. Video and Audio online, with reasonable quality and fast streaming. 100 channels on XM Radio - not to mention Cirius. To reach all those people in all those places is getting more and more difficult. In fact, a case could be made that users are looking for anonymous places to find content.
No, I don't mean porn.
I mean places where popups, spammers, invasive ads and data tracking aren't common. As soon as YouTube went mainstream, my firm discovered, for example, that video downloads of our clients' cvideo content on a per video basis were much higher on smaller, relatively undiscovered video portals. Why? Because young people - those who are continually looking for unique, original places to find content, looked for fresher ground when YouTube reached 40,000 new videos posted per week! (So there's something to be said for reaching younger people in contunually "low-stream", not mainstream ways.)
More on my Unlucky 7 Reasons for Mainstream Media Freakout in my next mini-opus...
Most people just don't understand traditional "big" regional media. By that I mean daily newspapers, weekly print publications, and broadcast TV and radio stations. First, they're all making money- always have. Making money is a fundamental reason why media properties exist. And of course, if you don't make money, you can't have content and programming that serves the local population. No money, no mission, eh?
The good news is that broadcasters and print publishers are in no monetary danger that threatens their respective missions. Yet despite that success, every one of them at some level is freaking out.
Because publishing is all about audience, readership and advertising. The primary growth media not only in the Detroit Region, but in regions all over the USA are digital. Internet, Satellite Radio, Digital cable TV with Video On Demand. Tivo. DVR's. ITunes.
Did I mention daily newspapers, TV News, and your local radio stations? No, I didn't, and for good reason. Though tradtiional media may occasionally have growth in a single brand, the fact is that the total number of users taking advantage of print and traditional terrestrial broadcast properties is at best flat - and in some cases is in a state of continuing a decline that has gone on for more than a decade.
This is not good news.
So what's a traditional media property to do? Well, they've already done it - created their own web sites. Really powerful web sites. In fact, local media web sites get millions of visitors a month. That's because all of the traditional media properties have invested in web versions of their respective brands. Many of them simply clone their traditional media content, and put it on their web sites. But some of them have wisely invested in infrastrucuture, designated editorial staff, and produced robust amounts of "rich media" (video and audio online). Ironically, the print guys have been generally more aggressive (with some exceptions) in web investment than their broadcast counterparts.
And they promote the daylights out of their media web sites in print and broadcast, in order to grow the number of unique visitors to those sites. It costs them very little to promote using print space and broadcast time they already own. That strategy has had some significant success. One of the Detroit Region's TV stations' web sites gets over 14 million unique visitors each month. One of the daily newspapers gets a million page views each day.
So why, why, why, are the traditional media properties here and everywhere across the US freaking out?
I'll start to tell you why next time....