Interviews with Digital Media Thought Leaders

Proverb of the Lions and Hyenas

Podcast Audio | Posted by Phil Leigh on October 16, 2012

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philblueheadshot Over three years ago Inside Digital Media predicted television advertisers would eventually insist they only be required to pay for ads that get watched. Thinking the Unthinkable About Video Ads reasoned that Google’s pay-per-click set a new paradigm that was ultimately going to encompass nearly all types of electronic advertising, including video. Yet television industry incumbents greeted our forecast as though it had all the credibility of an imminent second coming prophecy.

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Last week YouTube’s head of Global Content proclaimed the company does very well with skippable ads. Robert Kyncl added, “…our skippable ads in the U.S…are now making as much revenue per hour as ads on cable TV.” Advertisers don’t mind paying more when they know consumers have declined to skip the ad.

In our analysis, a proliferation of interactive smartphone-to-TV-Apps such as Into Now implies the TV industry simply will not be able to prevent the paradigm from spreading to their sector as well. Such Apps not only provide for “clickable” ads but can also evolve to enable viewers to click-through to an actual purchase of merchandise. It’s really a pretty obvious evolutionary path.

Similarly the Wall Street Journal reported last week that TV networks were disappointed TV viewing dropped significantly as they were launching new shows for the season. The Journal put the blame squarely on “intensifying competition from online video.” That was predicted at Inside Digital Media almost four years ago in Third Generation Television. Over two years ago Inside Digital Media not only predicted consumers would cut-the-cord to cable TV, but also described how the pattern would evolve. Simultaneously at least one prominent cable TV industry analyst dismissed cord-cutting as an Urban Myth.

Presently many industry experts are endorsing yesterday’s “ridiculous” predictions as though they never disagreed. As the African proverb explains, “Sometimes in the dust of the kill you can’t tell the lions from the hyenas.”

A case in point is the Long Tail Theory of Internet media and merchandising. The Theory holds that content programming on the Internet can be economically viable even among small audiences thereby drawing viewers away from content requiring mass markets to support the production costs. While Wired Editor Chris Anderson deserves credit for popularizing the concept, the less well-known Clay Shirky is the true originator. Thus, those of us concerned with the future of media may want to monitor Shirky’s commentary as much as Anderson’s.

In that context, ponder the more recent “Shirky Principle” – “Incumbent institutions will try to preserve the problem to which they are the solution.” Consider for example, the recent popularity of Op-Ed commentary from distinguished professors about the merits of traditional education over “Internet experimentation.” Yet, Coursera is approaching two million users.