Aug 7, 2014

The Black Screen Of Death: Failure To Create A Workable TV Everywhere Advertising Model

If you’ve ever tried to watch live programming on your MVPDs TV Everywhere app, you’ve no doubt encountered the Black Screen Of Death: 180 or 240 seconds worth of black screen with the words “Ad Break” in a poorly designed supertitle. No music or other sound effects. Not even a network logo.

At which point I’d have to assume that somewhere upwards of 80% of viewers decide that the app must be broken and walk away from it, many never to return.

I was discussing this last night with my friend Hardie Tankersley, Vice President, Digital Platforms and Innovation at Fox, and we came to the conclusion that there are multiple factors at play, none of which are easily solvable at the current time.

Let’s take a look:

  1. The Networks want Advertisers to pay extra for TV Everywhere (TVE) views: the networks view in-home iPad views as an additional digital impression the advertiser has not paid for and they want extra money for those extra impressions.
  2. Advertisers don’t want to pay for those TVE views: Advertisers feel that TVE is still not easily or accurately measured (at least not by Nielsen) and so they don’t believe the networks or MVPDs can come up with a fair price.
  3. Even if the networks decided to run the ads for free on TVE, there are still myriad additional rights issues: At present, commercials viewed on an iPad, even via a TVE app that’s streaming the same live TV as the set top box, are considered to be “online” or digital views, at least in terms of rights issues. And if the advertiser did not originally buy online rights (and pay the actors, directors and production companies accordingly) they will have to renegotiate those contracts and pay up, a process that’s sure to cost them way more than the value of the ad buy.
  4. Even if the networks decided to sell the unclaimed TVE inventory as a digital-only buy, there just aren’t a whole lot of takers. Not many national advertisers are interested in buying spots on an MVPD TVE app and the networks don’t want to start selling to third-tier advertisers during their prime time programming as this would tarnish the value of their traditional TV advertising spots.  So what happens is the TV Everywhere apps wind up with a small handful of ads that run over and over and over again, as painfully demonstrated by BTIG analyst Rich Greenfield in this video.
  5. Even if the network decided to run a promo instead of a black screen, they just don’t have that many promos. Promos aren’t timeless— they’re usually made for upcoming episodes of specific shows. So the network doesn’t typically have the inventory to run a varied array of promos— the six spots they have available to them may fill up the first commercial block but then what? And then, of course, there are those pesky rights issues again: if they’re on the TVE app, those promos are now being run online and that may necessitate additional talent payments.

So what’s the solution?

Act like an 8 year old. Don’t distinguish between screens, at least not inside the home. So that a live TV view on an iPad or Xbox is treated the same as a live TV view on the family room TV both in terms of audience measurement and rights. This will, of course, require Nielsen, or someone similar to implement a measurement system that works seamlessly across all the various devices and for the legal teams of all the interested parties to agree that in-home TVE views are not online views, at least for rights purposes. Once that’s in place, it should be smooth sailing for TV Everywhere, only there’s no guarantee either of those developments will take place anytime soon.

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