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Monday, June 12, 2000
The parasites are dining on the host
Tom Matrullo turned me on to this item at ZDNet (and provided the headline above as well):
TV broadcasters are casting a wary eye over digital video recorders. But will the nation's couch potatoes really be free of commercials?
The good news is this:
Digital Video Recorders (DVR), or "personal TV" recorders, allow you to record, pause, and fast forward through programs with simply a click on a remote -- a frightening thought for television and Madison Avenue executives who fear widespread commercial zapping by hard-core couch potatoes.
 Here's the bad news:
- The DVR leaders, TiVo and ReplayTV, plan to make big money with the one thing their customers want least -- advertising. So they're "experimenting with new marketing formats" that include "an array of targeted commercial messages."
- That means they'll watch you watch TV.
- NBC, Disney, CBS, Discovery, Cox, Comcast, Time Warner and some huge advertising agencies are all invested in TiVo, ReplayTV, or both. And they've already muscled their dependents to minimize the ad-zapping powers of DVRs.
- Evidence: "While some consumers may clamor for the freedom to zap commercials, both companies have agreed not to promote that capability." In fact, they're under pressure to dumb down existing designs: "TV broadcasters and other media companies have pressured both companies to get rid of the 'skip' and 'fast forward' buttons on the recorders, industry sources note."
- From Steve Shannon, ReplayTV's veep of marketing: "It's our business model to enhance TV advertising throughout the service." Guess you're saying the $500 dollars you're charging for the box just isn't enough, huh, Steve? Thanks for the clue.
- TiVo doesn't look much better. "Advertising will be one of our very strong revenues," says Stacy Jolna, TiVo's chief programming officer. "The next step is to develop an economic model that is comfortable to broadcasters and TiVo."
How about your customers, guys? The viewers are your customers, not the networks'. The networks' customers are the advertisers. The networks don't want your customers talking to their customers, because they want to protect their advertising revenue stream from disintermediation by direct contact between producers and consumers over the Net.
Mass market advertising is woefully inefficient and unaccountable, and always has been. It relies on a massive absence of good information. Companies like TiVo and RePlay are in a perfect postion to bring consumers into the advertising market conversation. But the Powers that Be (including equipment producers like Sony) don't want that, because they only want consumers to consume. They don't want them to show up as customers. That's bad behavior for a mass population valued only for appetites and cash. (Shut up and eat the ads, you plankton!)
Too bad. It'll happen anyway, guys. The Net will route around your dumbed-down features just like it routes around everything else. And it will route from both sides. Advertisers don't want to waste money, and viewers don't want to waste time. The Net brings those two wheels together like grinding stones, and the advertising industry will be milled to flour between them. Count on it.
(And trust us on this one. Some of the biggest Cluetrain customers are giant consumer marketing companies (even agencies) looking for ways to get conversational with masses they're starting to call "customers" for the first time. Alan Lafley, the new CEO of Procter & Gamble, recently invited fellow Cluetrain author David Weinberger to come speak to the company about The Way It Will Be.)
So tell your backers kindly to back off and leave you free to you serve your customers (and, for their own good, theirs).
As for advertising on your own service, don't even bother with it. You'll waste millions of dollars finding out what your customers already say with their MUTE buttons: they don't want it. That's why they bought your machines and pay your subscription fees. In the long run, your advertising revenues will round out to what they are right now, which is approximately zero.
The continuing end of business as usual
The Cluetrain Manifesto is #15 among the most-read books by CEOs.
Take it out of beta, babe. This one's done.
Our new friend Bessie Halsey writes, you guys are such an inspiration.. I know you are very busy, but if you get a chance .. please come hear my "voice".. it's a new article I wrote for no one in particular .. only if they stumble over my website. It's called Corporate OS Version 1 - Beta.
And it's good. Real good. Two paragraphs stand out for me:
In an operating system like UNIX, there is a technique for organizing interprocess communication called semaphores. Semaphores are a technique for coordinating or synchronizing activities in which multiple processes compete for the same operating system resources. They facilitate interprocess communications between applications which share a common memory space and access to files. It does for an operating system what communication does for the workplace. It brings order to the system so that files and resources are allocated in the most efficient way.
and
New technology supported by the Internet is about two way conversations. It gives the individual a voice in the mass. It puts control in the hands of the masses, and guess what, we are not as dumb, or ugly or insecure or smelly as corporate America would have us believe through the billions of dollars they invest in advertising to us through mass mediums such as television and radio. Corporate America better accept that it has lost the battle for control over telling us who we are and what we should think, do, wear, buy, drive or fly.
I make my living in the Linux world and I hadn't noticed the metaphorical relevance of semaphores. I need to think some more about that one.
I also like the wise attitude in that second paragraph. The Cluetrain "message" isn't a message at all -- just a chorus of clues rising from markets everywhere, calling attention to a matter that would be a lot more obvious if we weren't busy thinking of those markets as product-absorbtion mechanisms.
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