In the Trenches: Media tales about the US writers’ strike, economic downturn
The WGA strike will have the same impact on TV that Napster had on music, says Bill Wittur, managing director of London, ON-based Bottree Media Consulting.
The final pundit in MiC‘s current series is Bill Wittur, managing director of London, ON-based Bottree Media Consulting. He believes the current climate has the potential to be ‘a perfect storm for a radical change in budgets. . . and the catalyst for a massive degree of change that will radically alter the media landscape in Canada and elsewhere.’
How is the strike affecting your activities?
‘We’re very busy. There’s an enormous amount of spillover being felt in the Internet industry right now, and the strike is doing to TV what Napster did to music. Consumers are substituting TV for other forms of entertainment, including the rental of more videos, visiting the Internet and, to some extent, activities that don’t include any form of media at all.
‘We’re in a good place right now, because in a lot of cases, the web allows for short-term planning and buying opportunities. But the strike is creating a bit of a cyclone effect: more consumers and viewers are going online, generating vast volumes of ad inventory, be it with search, ad networks or other components of the digital realm. In some cases, the supply of digital media is increasing beyond measurement.’
Are you revising plans now?
‘Because we deal exclusively with digital communications, we are experiencing – in a very positive way – the shift from traditional budgets to new media. We are receiving numerous requests to expand recommendations into new categories, including search, social and other forms of user-generated content.
‘The key trend is that the buying opportunities have increased by a hundredfold. In the past, a few large companies held the key to large audiences, because they were at the centre of content creation and distribution. Today, there are dozens of ad networks offering any level of psychographic targeting and delivery capabilities.’
Are you shifting investments?
‘With the web, we’re constantly dealing with new categories of spend, so, yes, we’re seeing big shifts all over the place. Right now, the focus seems to be on search, but even that will change as new tools arise that allow planners/buyers to effectively place ads in context with social networks and user-generated content.
‘The key to adoption will be the minimization of the ‘tick-off’ factor. Too much too soon and you’ll have a revolt, similar to what we saw when Facebook implemented the Beacon program, making many consumers wonder if they could de-Facebook themselves.
‘In many cases, we continue to play the role of educator, mainly because even when new formats come along, clients have yet to maximize the benefit of advertising using the array of networks that allow exceptional vertical targeting or newsletters or online video. It’s a bit of a smorgasbord.’
What will happen if there are very few pilots coming out of Hollywood?
‘A lot of last-minute TV buys will result in drastic hikes in cost-per-viewer for advertisers, because you’ll have a lot of buyers chasing a limited range of quality shows. If the number of new pilots in the fall is limited, I think it’s safe to say that the idea of watching American Gladiators or other ‘unscripted’ shows will permanently alienate entire audience groups.’
Should Canadian networks look elsewhere in the world for new programming?
‘This is a great question, because it gets to the heart of CanCon, our mosaic culture and a growing desire to break away from the classic formulae that are being offered up (again) from the US. Canadian networks have already started a process of successfully cultivating our own product. For the first time, it seems like we’re all well aware of the idea that we can build our own industry and not rely on someone else’s content.
‘This will vastly improve the bottom line for all Canadian media producers if they stick to it. In fact, this awakening in the Canadian industry is a bright light in all of this. We also have a wonderful opportunity to start importing content from places other than the US. It’s time we started seeing more European soccer or Australian soaps or Asian drama.’
‘Numbers have shown that the sands have shifted with respect to media consumption of the average individual. People now spend nearly as much time using the Internet as they do watching TV. However, Internet budgets are still hovering around 6-8% of total ad spend. If TV buying opportunities continue to dry up, Internet budgets will increase to roughly 10-12% of total ad spend.
‘The folks in the WGA are correct in their demand to be compensated for the alternative revenue sources that have materialized. I predict a win in their favour.
‘The long-term effect of this strike is that the traditional producers of content will want to recoup costs, and will try to transfer any new costs (or lost revenue) to the consumer. If they do, this will be the death-blow to a lot of mainstream publishers, because individuals have already discovered how to get free content online. Ultimately, we’ll see the same thing happen to the TV industry as happened to the music industry. The nimble will survive, whereas the large conglomerates will resist change to the point of looking ridiculous.’
How do you think the current economic climate in the US will affect Canada?
‘A downturn and the strike, combined with new online tools, may create a perfect storm for a radical change in budgets. However, this situation is a lot like what we see in the financial marketplace. Those who panic are usually the ones who lose their shirts.
‘The reality is that there are a lot of people in our industry who’ve been through this kind of economic climate before. The smart ones will use this situation to buy to the advantage of their clients.’