Online Video Is Not Broadcast TV

MySpace

MySpace
MySpace
MySpace recently announced a deal with Marshall Herskovitz and Edward Zwick, the team behind Thirtysomething and My So-Called Life to create Quarterlife, an online show about post-college twenty-somethings. Unless it was a very slow news day, this would not be on most people’s radar — at least not until the show was a hit. However, what makes this particular press release interesting is that the producers have announced that the hour long show (which will be broken up in to segments for online viewing) will have “TV-level production values” and “TV-level production costs.”

Yes, Quarterlife is being touted as the first “TV quality” show made for the Internet.

What?

First of all, quality is in the eyes of the beholder. There are hugely popular television shows that I would not watch with a gun to my head. And, I promise you, there are plenty of shows that I love, that you personally hate.

Assuming you could get a dozen television professionals to agree on what “TV-level production values” might be, applying the term in 2007 is just silly. Production techniques and equipment are fully democratized. Anybody who knows what they want to see on the screen can get it done for less money than it cost to produce yesterday and more money than it will cost to produce tomorrow.

To be fair, Herskovitz and Zwick may simply be talking about producing a show that will be aesthetically pleasing to the establishment in Hollywood. And, to that end, it will probably look like a show you might expect to see on a broadcast network. Considering who one would hire to work on such a show, you’d better believe that it’s going to cost a fortune to produce.

As for looking like TV — if you watch the trailer on MySpace you will notice that the colorspace for online video is quite different from its broadcast counterpart. To say nothing about contrast, brightness, and all of the other image tweaks that video geeks like to talk about. Online video in 2007-2009 cannot look like TV for 99.99% of the viewers.

Now that we have covered “quality” and “cost” in Quarterlife terms, let’s get to the fun part. Could you imagine an MTV exec in 1980 telling the creative and production teams to use tripods, leave shot up longer, make smoother transitions (you know more like a theatrical motion picture), make the graphics more readable, etc. With the new medium of Music Television came the creativity of a new generation — what we consider “old school” today, was anti-conventional wisdom, anti-accepted aesthetic and downright ugly to grown-ups back then.

Short-form online video is just coming into its own. It is nascent and raw and its beauty is truly in the eyes of the digital natives who consume it. Strategically, trying to make an online video look more like a network television show sounds like a really bad idea. One look at the Quarterlife trailer and you instantly know that it is manufactured to look like something is quite obviously isn’t. That being said, subjective criticism is not the today’s focus.

I’m interested in exploring the economic model for the show. The plan is to break the show up into six segments. They will premiere on MySpace and then be syndicated around the Internet. Most expensive, “TV network quality” shows are deficit financed by someone. The ROI comes from foreign and domestic broadcast rights, home video and syndication windows. The content is repurposed, repackaged and distributed in different physical form factors as many times as the market will bear. Content that starts its life as a digital file distributed over the public Internet probably can’t use the same methodology. It’s hard to charge someone for something they can already get for free. And, online video has no geographic or temporal restrictions.

Since this is an online property designed to mimic broadcast television, let’s look at that model. A network television hour show is approximately 42-44 minutes long. The rest of the time is taken up by promos for other shows and paid advertising. The standard unit for paid advertising is 30 seconds on the networks and they charge for the airtime based upon how many people are watching and, in most cases, what kind of people are watching. All of these viewership numbers are estimated, but the system is highly evolved and self-regulated. Last year the commercial television business charged their sponsors about $66 Billion.

Most of us think that there are too many commercials on TV. 16-18 minutes per hour of promos and commercial messaging is a lot. But if they cut the number of ads by 10%, you’d still think there were too many, and their business would be off by 10%. So, in practice, you will never see fewer ads on TV.

How many ads will you be willing to watch attached to a six-minute segment of “TV quality” online video? The answer is a five second pre-roll and a post-roll of any length than might keep your attention. Will you tolerate a :15 or :30 second commercial in the middle of a six minute segment? I wouldn’t, and you probably won’t either. Is that enough commercial advertising space to pay for “TV Quality” production and make a profit? Not unless 10 million people watch each segment. Which simply won’t happen.

Broadcast television comes with a 25-30% advertising/promo load. Using that formula, you should be happy to watch :90 seconds of ads per six minute segment. Will you? And, even if you do, how much will a sponsor pay for each video viewed. Wait — they won’t know that number either. You’ll only know how many people have downloaded it or, if they choose to stream it, watched the streams. And, no, you still won’t know who is in the room watching with them.

If the segments are truly wonderful, it will take a heartbeat after the first video is posted to find the segment re-edited and commercial free on the P2P networks. Or worse, with someone else’s parody ad or counterfeit ad in place. If you’re expecting an ad, how will you (the viewer) know which one you were supposed to see. Even though this show is supposed to be the first “TV Quality” online video — an average 12 year old with average digital native skills and a semi-current-vintage computer can reedit and repost it with no perceptible loss of quality as casually as you use email. Remember, production technology is fully democratized. Just as a proof of concept, you can view the same trailer on media30.com with a short post-roll that we added.

There are several good ways for advertisers to use online video that yield respectable ROAS and ROI. But, there is absolutely nothing about the financial reality of broadcast television that translates to online video. So, it may be fun to think of a multi-million dollar online video project as groundbreaking — but I think it’s more realistic to think of is as bank-breaking. Shelly Palmer

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About Shelly Palmer

Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications, co-founder of Metacademy, and the CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named LinkedIn’s “Top Voice in Technology,” he covers tech and business for Good Day New York, is a regular commentator on CNN and CNBC and writes a popular daily business blog. He’s the Co-Host of the award-winning podcast Techstream with Shelly Palmer & Seth Everett and his latest book, Blockchain - Cryptocurrency, NFTs & Smart Contracts: An executive guide to the world of decentralized finance, is an Amazon #1 Bestseller. Follow @shellypalmer or visit shellypalmer.com.

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