Convergence is back, but it is not what it used to be. Following its release after about five years in the halfway house for overblown business ideas, it has been swiftly rehabilitated in the form of various online-offline business ventures.
This time around, though, some fairly radical wrinkles on the theme are in the works. One notable example is Google’s deal last week to acquire dMarc Broadcasting for up to $1.24 billion.
DMarc uses software to help place ads on radio, and it could conceivably do the same for Google’s armada of Web ads. The deal, along with other experiments by Google to reproduce its advertisers’ notices in newspapers and other print outlets, suggests that Convergence 2.0 is moving in interesting and previously undeveloped directions.
What would it mean if TV shows viewed or downloaded over the Internet could be watched only by people in certain geographic areas, mimicking the network affiliate model of over-the-air television? And what if it were as easy and inexpensive for local pizza parlors to buy cable television spots as it is for them to put ads on the Internet through portals like Google and Yahoo? The ideas are being developed by small, under-the-radar outfits – the first by a company called Decisionmark and the second by a brand-new business, Spot Runner.
Note to anyone, including Google, Microsoft and Yahoo intending to encode and deliver network programming. The backbone of our nations entertainment system is network programming. Each network has approximately 200 local television affiliates which carry their programming and mix in locally created content. Each of these local television affiliates owns the exclusive rights to broadcast content to the viewers which are capable of receiving their signal off-air. Since the Internet is global and broadcasting is local, then you can’t simply “search and deliver”. Search without delivery is just search. I am fairly certain that every TV station in America would be thrilled to participate in search and deliver as long as you preserve the network-affiliate distribution system. Remember, each broadcaster owns the exclusive rights to broadcast in their market, to those viewers which could otherwise receive their station off-air.
He goes onto say
So, four months later what have we learned? We’ve learned that Desperate Housewives and LOST are such great shows that Apple is selling them for $1.99 the next day via iTunes. We’ve also learned that CSI and Survivor are such great shows that Google is selling them the next day for $1.99. Thank you Apple. Thank you Google. You’ve demonstrated to us that the Internet is a perfectly good way to distribute content. There is however one way you can make it even better. Include the local broadcaster.
A solution for Apple (and Google, and Yahoo, and Microsoft, and anyone else entering realm of local television)
It is simple. Really. When a person goes to iTunes to download a previously aired show, give them two options:
$.67, or better yet, FREE, as it aired (commercials intact) by their local station. There isn’t a station in America that won’t encode their broadcast, zip-it-up and send it to Apple. A station can do this for less than a one-time investment of $20,000.
$1.99 without commercials. Send the local station their cut. I’m sure most stations would set up a Paypal account to collect the money in real-time.
Back to the New York Times article
The big question is whether television industry constituents – networks, affiliates, programmers, writers, even advertisers – are better served by preserving the industry’s current pecking order or by pursuing a more fundamental revamping of its business model to satisfy the “anytime, anywhere” demands of digital consumers. Expect this debate to come to a head if downloads of hit shows take off and local affiliates start losing viewers and advertisers as a result.
Whereas Decisionmark’s product is designed to extend a so-called old-media market online, Spot Runner’s clever premise is roughly the opposite: it uses the Web to take some of what has made the Internet the fastest-growing advertising medium and extend it back to the world of television, the biggest advertising medium.
So we are back to the Old World vs. New World – Using thechnology to keep the old landlords in place or comletely rethinking the broadcast model.
Nick Grouf of Spotrunner says
WE felt that the world of the Internet could be harnessed and serve local advertisers in a very efficient way,” he said. “This really puts television advertising in the hands of everyone.” If he is right, “Will You Marry Me, Freckle?” ads could run alongside more familiar fare from carmakers, pharmaceutical companies and restaurant chains.
By extension, these same ads could be placed on the Internet as local video-based advertising takes flight there, too.