Sunday, December 09, 2007

The Way Forward

“There’s $30 billion of advertising in search revenue, and they want to put it into YouTube videos, so you know there’s going to be some breakout things here.”
That's a quote from Theodore J. Leonsis, producer of a new documentary called Nanking. He's frustrated at the dearth of distribution channels for documentaries and while he won't reveal his plans, it's clear that he sees the web as a major opportunity. So should we all.

I spent a lot of years animating TV commercials. I got to the point where I had trouble dealing with ad execs and their clients and the questionable requests that they made. I say that so you know that I'm not really a fan of advertising. My TV viewing these days is almost entirely movies without commercial interruptions.

However, I think that embedded advertising is the key to success on the web. People are used to free content online whether it's print, audio or video. Sure, there's iTunes, but we have to acknowledge all the torrent sites that are making enormous amounts of material available for free (legally or not).

It's a given that anything that's posted online is going to be watched, copied, emailed, etc. If you're trying to collect money on those digital copies, good luck. The only workable solution is to embed advertising or use product placement. That way, the more a work is viewed, copied, etc. the happier the financial backers will be. What advertisers are paying for is eyeballs. The more eyeballs who see their message, the happier they are.

Unless you're somebody with an already successful property or an impressive track record, you're not going to attract ads. You've got to build your audience first and it has to be a demographically specific one. When you pitch a show to a broadcaster, it's always one of their first questions: who is the show aimed at? They need to know that because they have to approach the right advertisers. While creative people might resent being forced into a demographic box, it's a necessary evil if you want to attract advertising dollars.

Since Felix the Cat in the 1920's, we know the value of a popular character. It builds an audience and it spawns merchandise. If you're going to try and succeed on the web, look for the star character with a definite demographic. Then approach advertisers that seek your demographic and embed their ads in your piece. Give the animation away and tie the advertiser cost to the number of hits. Sooner or later, somebody is going to score big with an internet character and the advertisers will line up to throw money at the creators.

(Changing the subject somewhat, I'm frustrated that the Writers Guild isn't thinking outside the box during the current strike. Certainly, the AMPTP is going to provide the bulk of writers' earnings once this strike is settled, but why not break the AMPTP business model wide open? Imagine if Jay Leno or Jon Stewart went straight to advertisers and said that they wanted to produce daily material directly for the web with their regular writing staffs and that they would embed ads. Heck, Leno or Stewart might even do the ads themselves. Can you believe that the advertisers would say no?

(Should something like that occur, the AMPTP would soil themselves when they realized that they're only conduits between advertisers' money and the talent and that they could be eliminated. Ultimately, the AMPTP's money is advertiser's money or the public's money. There's no reason why the talent shouldn't be accessing that money directly, without the AMPTP.)


Steve Schnier said...

Hi Mark,
That's a brilliant solution. Paid Programming has only been done on a basic level - infomercials selling Gintsu Knives, etc. But if a name talent were to buy a block of time to produce a show, it would open up a lot of possibilities. For one, they might be exempt from network BS&P.

Buzz Potamkin said...

Mark - it's called disintermediation, as I noted on AWN in 1999 - been going that way since the advent of first-run syndie in the early '80s, and what you cite is the natural next move.

And don't forget that features are no longer making money - see coverage of Roger Smith's "Do Movies Make Money?", or better yet, listen to an interview. There aren't too many rocks left to hide under....