Tagged: Mark Ritson

Question: what is TV? Answer: a form of behaviour

Mark Ritson has recently been stirring the pot on TV – challenging broadcasters to take on Netflix and Amazon and predicting that Facebook will buy Netflix within a year.

These are interesting ideas, but in order to make sense of them I think we first need to ask ourselves the question, what exactly is TV: is it a form of content, distribution, a device (TV ‘set’) a business model or something else entirely? At the moment we are confusing all of these things.

In the past we haven’t had to ask this question, because TV has been a single thing created from a fusion of all of these elements, albeit we have come to understand it primarily as a form of content. This is why we talk about TV ‘programmes’. In reality traditional TV is a form of distribution that has imprisoned a certain type of video content within it, but we have focused on its content because this has been the basis of difference. There hasn’t (until recently) been an alternative (different) type of distribution and thus alternative content or an alternative place where ‘TV’ content can live.

At its heart the digital revolution is all about the separation of information / content from its means of distribution. This marriage, and consequential relationship, between information and distribution established 600 years ago by Gutenberg, is coming to an end. The separation allows us to understand that in many instances this was a loveless marriage where distribution wore the trousers and forced content to take its name and adapt to its formatting strictures – hence TV ‘programme’.

The implication of this divorce for the distribution-dependant business model that was TV is the discovery that much of the content it used to be wedded to can enjoy a life with other distribution partners and also that it has an opportunity to flirt with content that was formerly imprisoned within other distribution media (such as movie screens). It has also meant that Casanovas such as Netflix can establish themselves in the space previously owned exclusively by the business model known as ‘TV’. Imprisoning content is no longer the best or only route to commercial success.

In order to understand what is going to happen to this thing known as TV we need to develop a new way of defining the problem that TV is there to solve and thus reconstructing a business model that is based around providing a solution to that problem, rather than a model designed to preserve as much as possible the confederation of functions and skills that sit within a TV channel or network.

I look at it in two ways. First, TV as a form of behaviour. The fusion of content, distribution technology and device that we know as TV created a form of behaviour: people (often in groups) sitting in comfortable chairs in their own homes, gathered around a screen in order to be entertained (and to a lesser extent informed), primarily between the hours of 8pm and 11pm, watching content that frequently formed the basis of subsequent online or offline conversations.

The good news is that this form of behaviour is not going to go away anytime soon – and to that extent the behaviour we call TV (and thus TV advertising) is going to endure. The less good news, for the traditional business model associated with TV, is that these people now know that they can expect a much greater choice of content (albeit probably within a more restricted range of content categories) than has traditionally been the fare of what we called TV programmes or can be provided by the things known as TV networks or channels.

The form of content that is best adapted to this form of behaviour is where the future lies. It will tend to be based around long-form storytelling, live sports events, mass entertainment that has an element of either real-time audience participation or real-time social currency and, to a lesser extent, news. This is the space Netflix (and Strictly Come Dancing) is addressing and it is growing. This is the thing Ritson has identified in his article as being a ‘third line’ of ‘autro’ viewing that he defines rather confusingly as being ‘on a TV set but not TV’ and sitting between TV and mobile. This is the wrong way of defining this stuff as the rather confusing ‘on TV but not TV’ description implies and it stems from our inability to separate the differing elements that constitute traditional TV, our conflation of distribution and content and our obsession with channel (TV versus mobile) – which in itself is a hangover from the world of distribution dominance. This stuff is better defined as simply content that is adapted to TV behaviour but that isn’t currently produced by TV networks.

This brings me onto another way of looking at the broader video space, which is to define it by screen size, which in itself is also allied to behaviour. There is the big screen that sits in front of the home-based comfy chairs and hosts the type of content referred to above. Then there is the personal screen that we will use when we want to behave as an individual (and currently is provided by the device known as a laptop / tablet).  And there will be a palm-sized screens which we will use when it is not possible to access the other types of screen, or for candy-content (short, sweet, usually consumed ‘to go’).  We have also seen, in Google Glass, that there is a new screen-based environment/behaviour – which I guess you could call the real-time, heads-up screen. The device known as Google Glass has obviously not worked as the device to host this type of screen, but the behaviour associated with it remains valid and will probably first be hosted on a palm-sized screen but this time held in front of the face (and on car windscreens) and associated with augmented reality. And all of these screens will be fed by a variety of distribution technologies and content producers.

Note: I haven’t called the palm-sized screen a mobile because that simply compounds the mistake of seeing mobile as a form of channel, when mobile, as per all the above screen types, is best understood as a form of behaviour. Mobile has a huge significance going forward: not as a channel, but as a behaviour detection device.

Also note: last Wednesday I watched the second half of Tottenham Hotspur’s disappointing performance against PSV huddled around my son’s iPhone in Venice Airport. In all respects a sub-optimal situation – but that was the only alternative relevant to our current situation / behaviour. Which is why we need to understand technology / channel in the context of real time behaviours. Behaviours drive selection of technology or channel, not the other way around. Of course a mobile is not appropriate to the environment or behaviour that is living room viewing, but in some situations it will be the best (only) option.

Having defined the forms of behaviour or environment associated with consumption of video the challenge is to define a model associated with satisfying all, or part of, these behaviours. I think there are four things this model has to address.

First, and of greatest relevance to consumers, there is content aggregation: a mechanism for finding and filtering relevant content. Google is a content aggregator as is Spotify to a certain extent. However, their models can’t be directly imported because the behaviours associated with video consumption are different. Video consumption (at least for the big-screen living-room behaviour that is TV) is more here-and-now and socially relevant. There is a need to watch what everyone else is watching. If you want to work-out how to insulate a loft you don’t need your friends to also watch the video. Likewise if you want to listen to Freebird by Lynyrd Skynryd, this is always something best done alone (and preferably in secret).

Aggregators generally are the future for lots of things in the digital world. Uber is an aggregator. We can also see, if we choose to (and many don’t), that the future of retail will be divided between purchase aggregators and providers of consumption experiences.

Second, there is revenue aggregation. Google became mighty because it started off solving a content aggregation problem but found a way of aggregating revenue around the consumer behaviour it was addressing. The current ‘TV’ models of aggregating revenue are not sufficiently consistent with the behaviour consumers will want from a content aggregator. Revenue and content are currently brought together in a portal model: Netflix is really a portal as is a TV channel – but portals are a sub-optimal from a consumer’s perspective. Portals are a way of getting consumers to pay for content they won’t ever watch, albeit this this provides a way to manage the third problem: management of risk.

Living room content is expensive to produce. You therefore need up-front money tied to some guarantee of future revenue. YouTube is close to being a functioning content aggregator but its revenue aggregation model only works to support content that is cheap to produce and where producers have the incentive to carry the risk. The risk problem is currently solved via the commissioning process which ties distribution to content. The revenue aggregation solution will probably be defined by the requirement for consumers to pay (via subscription or exposure to advertising) only for the content they wish to view, plus the ability to provide some guarantee of future revenue.

The fourth issue, which is linked to risk management, is promotion / social relevance. A video on insulating your loft will always be relevant (with respect to loft insulating behaviour). But this years ‘Strictly’ winner very quickly becomes last year’s ‘Strictly’ winner. If a content producer has access to content distribution, they can use this to promote their upcoming content. They can also restrict access to this content, via release dates and scheduling, to build anticipation.

Effectively it is only social relevance and risk management that currently ties content to distribution because the technology already exists to provide content and revenue aggregation (the barriers here are only ones of economic self-interest). But content and distribution will become separated because this is the way the tectonic plates are shifting and because consumers will demand it.

So – I can’t draw the picture of what the business model that satisfies the behaviour known as TV will look like. But I am pretty sure that the route to finding it will be based around a recognition of the ultimate end-state of content separated from distribution, the connection instead of content directly to revenue via a process of content and revenue aggregation (rather than through an intermediary portal), the ability to manage risk and the need to generate social relevance. And the starting point is to stop thinking about TV as a form of content or a form of channel or a device, and start thinking about it as a form of behaviour.

P.S. My favourite media analyst, Clay Shirky, tells a great story about TV (I think in his book ‘Here Comes Everybody). His young daughter was at a friend’s house and was scrambling around behind the TV. Shirky assumed she was looking for the remote, which he gave to her. She looked at it quizzically and said “no daddy, I am looking for the mouse.” She didn’t care about the device known as TV, to her it was just a screen and a screen which ships without a mouse is broken. A screen without a mouse: that’s not a bad way of summarising the state of the thing we currently call TV. Something that is out of line with consumers’ desired behaviour.

Ritson versus Sharpe and a story about geomorphology (and a tsunami)

I have just received an email with the confirmed line-up for this year’s Festival of Marketing. My first reaction to this was that I can’t believe it is nearly a year since the last one. It also reminded me that the headline event last year was a battle of the professors between Byron Sharpe and Mark Ritson. Unfortunately I missed it, but for those not in the know the basis for said battle is Sharpe’s advocacy of mass communication versus Ritson’s focus on targeting and segmentation. I was also reminded of this conflict because Byron Sharpe was featured on Adam Fraser’s EchoJunction podcast a couple of weeks ago.  I must confess I haven’t read Sharpe’s famous book ‘How Brands Grow’ so was hopeful that the podcast might give me a shortcut. I also availed myself of the opportunity to listen to the Prof. Ritson’s appearance on the same podcast some time previously.

On the basis of the podcasts, I would say I came out more of a Ritsonist. Of course, as Ritson himself has pointed out, it is not a question of either/or. A brand has to be able to address its entire audience and its ability to do this essentially defines it status as a brand. But an audience is not homogeneous, either in terms of attitudes or behaviours over time – which creates the requirement for targeting.

In fact, according to my theory of the future of marketing in a digital world, brands face two challenges: first is redefining the concept of an audience (and indeed a segment of such) and becoming more adept at convening these audiences rather than renting access to them; and the second is understanding how to create value from relationships with consumers as individuals (the world of distribution and the world of connection).

I guess the reason I came out on Ritson’s side was because I very much liked his scathing view of social media and assessment that most marketers have simply been jumping on a series of digital bandwagons, but also because there was something in Sharpe’s absolutist approach that I was uncomfortable with. First was his contempt for the idea of the niche and his dismissal of a niche brand as an unsuccessful brand. We are entering a time when the competitive advantages associated with being big are reducing and the ability to be small is increasing. Many big brands are facing the long-term challenge of death by a thousand niches. Second, while I am all in favour of developing a more rigourous, data driven approach to marketing I couldn’t help but get the feeling the Professor Sharpe was restricting his field of analysis according to the ability to gather or analyse the available data and disregarding evidence outside of this, not because the data was telling him to do this, but because the data was not available (or not available to measure in the way he wished).

It reminded me of a story about data, measurement techniques and assumptions that was doing the rounds back when I was studying for my degree. I studied geography, with a specialism in geomorphology (rivers, erosion and stuff). At the time, geomorphology had a problem in that we could look around and see evidence that erosion had happened, but couldn’t see it, and measure it, actually happening. (This is a bit like the issue of knowing that half of the marketing budget works, but not knowing which half). The assumption was therefore that erosion was a very slow process – water dripping on a stone – and the reason we couldn’t detect it was that we hadn’t had sufficiently sophisticated techniques or equipment to measure it.

Geomorphology had another problem in that it was, at heart, an observational science: knock-kneed bearded blokes in hobnail boots and khaki shorts wandering around with notebooks looking at things and thinking about stuff. This was deeply unfashionable back in the 60s and 70s at a time when computers were becoming established in academia. You couldn’t be a proper scientist if you didn’t run what we then thought of as large amounts of quantitative data through computer programmes.

So an attempt was made to address these two problems by wiring-up a hill slope (geomorphologists were, and probably still are, obsessed with slopes) with all the latest detection equipment, feeding all the data into a computer, pressing the button and finally nailing the causes of erosion. This slope was going to be so closely monitored that an ant couldn’t fart without us knowing about it. Who knows, perhaps farting ants would be revealed as the culprits?

Anyway, the equipment was put in place, turned on, and revealed precisely nothing. A total flatline. No erosion was taking place. And so it continued for weeks on end until after a prolonged period of heavy rain a landslide washed all the equipment away. It was as though the slope was saying “so you wanted to measure me? Well measure this sucker”.

Of course the real issue was one of false assumptions (erosion as a slow process), a restriction of the field of investigation to those areas from which data could be extracted, a desire to use new bright shiny techno things, plus a distaste for conventional, less data-driven, analysis. Geomorphologists have subsequently realised that erosion is often not a slow process, but an an infrequent, catastrophic process. The slight irony is that an old fashioned knock-kneed bloke with a certain level of experience, wandering around with a notebook, looking at stuff, noting slope angles, digging some holes to determine soil depth and composition and sticking a finger in the ground to get a sense of soil moisture levels could actually develop a much more effective functional understanding of what was going on, what had previously happened and what was likely to happen in the future that someone possessed of all the latest measurement techniques and data.

This is not to say that we should eschew evidence-based marketing, but we need to take about what assumptions we make, what evidence we seek and, crucially, not discard evidence simply because it is difficult to measure or crunch through an analysis programme. 

And also, in relation to his dismissal of the niche, I have a suspicion that Sharpe’s book may come to be regarded more as a piece of historical analysis than as a guide to the future. Perhaps it should be renamed “How Bands Grew”.

However, there is a geomorphological post-script to this story which does favour Prof. Sharpe. In relation to catastrophic geomorphological events, we now know that the east coast of Australia was once devastated by a massive tsunami with waves in excess of 100 metres high. Ths was caused by the collapse of one of the islands in the Hawaiian archipelago – a phenomena know as a long run-out landslide. And the bad news is that this is going to happen again in the not too distant future, geomorphologically speaking. So Prof. Ritson in Melbourne could be in trouble, but Prof. Sharpe around the corner in Adelaide should be OK especially if he sets up house up in the Flinders Ranges.