Recently, VideoNuze(Analysis) wrote an interesting piece on the growth of cable and broadband audiences:
Revisiting The Long Tail and Broadband Video
...The Long Tail was an important contribution in understanding how the world of digital economics works. Anderson cited multiple examples where the Long Tail was evident (e.g. Amazon, Rhapsody, etc.). In my March '05 piece ["Cable Bests Broadcast - Basic Networks Steamroll Into Summer with Lion's Share of Audience." ] I explained that the Long Tail concept was familiar to anyone in the cable TV business: the traditional "head" content was the broadcasters, the long tail was the constellation of niche-oriented cable TV channels.
When I wrote the piece, as a group, basic cable TV's total audience had just nudged past the collective audience of the broadcasters for the first time (i.e. The Long Tail effect was becoming evident). While each cable channel's audience was small relative to each broadcaster's, cable's total audience was now greater. It had taken 30+ years for cable audience to reach this point.
Flash forward 3+ years to the Multichannel article revealing that in May sweeps period, cable's audience share had surged to 60%, compared with 40% for the broadcasters. And it's interesting to note that a key part of cable's May win is due to cable co-opting traditional broadcast programming: in May TNT's airing of NBA playoff games accounted for 12 of the month's top 20 most-watched programs.
What does all this have to do with broadband video? As I explained back in '05, in reality, broadband distribution is essentially extending the long tail of programming. Broadband allows startups and established players (including cable and broadcast networks!) to utilize newly available broadband infrastructure to reach their audiences. The result is a massive proliferation of new programming and new viewer behaviors, further fragmenting audiences to ever-smaller niches.
Today's cable channels will eventually be seen as the "mid-tail" with broadband as the hyper-niche long tail. Given their own first-hand experience of the last 30 years, cable operators, cable networks and broadcast networks should all have a pretty clear view of the challenges and opportunities that broadband creates. How well they respond will determine who will be the winners and losers of the next 30 years.
At first, I was tripped up by the terms broadcast and cable, until I realized that (s)he wasn't referring to the delivery mechanisms (e.g. OTA, Cox, Comcast) but rather the brands that dominate those delivery mechanisms (e.g. NBC, MTV, Discovery, etc). The reason for this distinction is that all the TV content creators will ultimately be on broadband, whether they started in broadcast or cable. Broadband won't replace those two, but it will reach dramatically farther.
Of course, there's a third class of content owners that is newly empowered by broadband video: Print Media. Magazines and newspapers are flocking to video because the costs are so incremental to their core competencies yet the yield on CPMs is dramatically higher. I like to call this group New Media because they aren't encumbered with the same historial limitations and perspectives as the traditional TV players, and so can move with much more agility into this space.
And, even though broadband can support so-called users generating video content, there are really two classes of users online: pro-am users who strive to create periodic or episodic content (typically using podcast technology), and individuals who share individual pieces of video content (typically using social sites).
With those definitions, then, here is my mapping of content creators to the long tail graph:
As an industry, we're struggling with how to monetize content down the tail. Traditional TV brand advertisers will always favor content towards the head. The middle of the tail will never have the reach, on an individual show basis, that the head enjoys today, yet there are still millions of people watching those shows. This is where contextual and behavioral targeting will take hold.
I'm not familiar with radio advertising at all, but it seems to me there is some parallel emerging... on radio, an advertiser doesn't know what songs play before or after their commercial, but they do know the general demographic profile of the listeners of that station, and they do know that the songs are "radio-friendly". On the internet, those demographic profiles can become more and more focused until it becomes fully optimized for a single listener.
As more and more of TV content moves to an Internet TV, on-demand delivery experience, advertising will become less and less focused on the content before and after the break, but rather on the increasingly optimized relevancy of the viewer during that break.
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