Tyler Speed
Have
you ever thought about what you would do if you were in an advertiser’s
position in today’s television market? Would you try and advertise directly
with the most logical brand that suits your consumer? Or would you go and try
and find advertising space on the highest rated television show? These are
questions that many advertisers in today’s tech-savvy world have to ask
themselves. The answer though has been in front of them all along; an advertisers
best way of reaching an audience is through live television.
What
is meant by live television? When I refer to live television throughout the
rest of this blog I want you to think of programs that occur in real-time. For
example, one of the largest live television programs of all time just occurred
in the Super Bowl. Sports, news, and live entertainment have become the only
programs that advertisers can rely on for people to watch.
For
the remainder of this blog I will focus on sports primarily because that is
what I know best. As stated in my trade publication business insider, “We almost never watch television shows
when they are broadcast anymore
(with the very notable exception of live sports)” (Blodget) I want you all to
think about this for a second what would you rather make time for in your day,
a sporting event like a basketball game, football game, or baseball game, or
would you rather make time for a television show like the Blacklist or Empire?
Me personally I would choose to watch the sporting event and this is solely
because I know that I could watch those television shows the next day and get
the same affect.
If we
look at the concept of advertising in television the point is to reach the most
amount of viewers, resonate with those viewers, and then generate a reaction
from the ad. So, if you’re a company looking to advertise it becomes a no
brainer to put your ads in live television because that guarantees the reach
and resonance of the ad with a larger number of people on the spot. With the growing
urge of audiences to switch to digital means to watch television shows,
networks are seeing many of their shows decrease in ratings. As seen in the
article TV Is Dying, And Here Are
The Stats That Prove It, “Audience ratings have collapsed: Aside from a brief respite during
the Olympics, there has been only negative ratings” (Edwards) This means that advertisers are struggling with
television and their biggest need is for shows that will guarantee an audience
during the actual programming. That is where live television comes into play,
because although TV may be “dying” live TV is still growing. This is shown in the
Los Angeles times by Scott Collins when he talks about how, “Jeff Bader, who oversees the schedule for
NBC, [says he]… has seen its best ratings so far from NFL football” (Collins).
If
you look at the info graphic above it will show you just how much live TV
audiences are increasing. I understand this is for the Super Bowl and that may
skew the number of viewers, however it still proves the point that live
television numbers over all are seeing increasing viewership.
So
my question to you now is do you think that these companies, that own these
major live television events, have a unfair advantage when negotiating price on
the ads being played on their networks? In my personal opinion, I think that in
the next few years we are going to see huge spikes in costs of 30-second ad
space during live television. I believe in fact that soon we will see the price
of an average sporting event on a week night grow to be unbelievably higher
than a normal primetime spot. In another article I read it was shown that,
“Similarly, a 30-second spot during the Winter Olympics in the same year
generated between $360,000 and $490,000, which was about 3 times the rate of an
average prime-time spot” (Bauer Insight). I believe this is occurring because I see a monopoly on
audiences that is held by these few networks that own this live content, and I
believe in the coming years they are going to realize how much it is actually
worth and capitalize on it.
Work Cited
Blodget, Henry. "Don't Mean To Be Alarmist, But The TV Business May Be Starting To Collapse." Business Insider. Business Insider, Inc, 03 June 2012. Web. 07 Feb. 2015. <http://www.businessinsider.com/tv-business-collapse-2012-6>.
Richter, Felix. "Infographic: Super Bowl XLIX Draws
Record TV Crowd."Statista
Infographics. 03 Feb. 2015. Web. 08 Feb. 2015.
<http://www.statista.com/chart/3187/super-bowl-tv-audience/>.
Collins, Scott. "Fall TV's Winners and Losers - so
Far." Los Angeles Times. 17
Oct. 2014. Web. 08 Feb. 2015.
Crama, Pascale, Dana G. Popescu, and Ajay S. Aravamudhan. "Advertising Revenue Optimization in Live Television Broadcasting." Web. 8 Feb. 2015. <http://www.mysmu.edu/staff/ajaysa/files/revenue_tv.pdf>.
It has become increasingly clear that chord-cutting is the trend of the future and broadcast networks are getting scrappy and desperate in their attempts to remain afloat. With broadcast companies being forced into making more selective and personalized cable packages, it has become an “every network for themselves” situation and everyone’s singular saving grace are the live programs that can be trusted to pull in an audience.
ReplyDeleteYou pose the question of “what would I rather make time for in my day?” and although I don’t watch a lot of sports, I still agree that there are definite times when live television becomes an event that people will put in their calendars like any other appointment because unlike television series that live beyond the time slot in which they are aired, many live programs are only really worth watching in that moment. I’m talking mostly about award shows, because that’s what I set aside time for, but other than the fact that they’re less frequent than sporting events, I feel that they are similar in how audiences consume them. In Nielsen’s article, Tops of 2014: Social TV, the audience average of their tenth spot special (Emmy Awards) was 8,763 viewers, which is almost double the amount of the number one series (The Walking Dead) viewers at 4,934 (Nielsen).
As I said, I believe that these numbers are mostly due to the novelty of the events. I, myself am not particularly interested in live tweeting my favorite programs, but when it comes to programming like the Super Bowl or the Oscars, I suddenly have a lot to say and an overwhelming desire for people on social media to know about it. I believe that this phenomenon is very closely tied to this concept of novelty. In the reading from the Los Angeles Times, “Fall TV’s winners and losers—so far,” the author talks about the competitiveness of programming these days: “’Gotham’ airs on Monday evenings, which has shaped up as perhaps the most competitive night on TV this fall, with viewers choosing among ‘The Voice,’ ‘Dancing With the Stars,’ ‘The Big Bang Theory’ and NFL football on ESPN. Faced with such plenitude, Americans have increasingly turned to their DVRs” (Collins). With so many options, no wonder people have been time-shifting. It’s no longer just convenience, it’s necessity, and on the most part people have very few qualms about doing it, except, I would argue, when it comes to live television.
I would even go so far as to say that award shows are a good platform for advertisers to be guaranteed a larger audience reach than most regularly programmed show, but also, in situations like the golden globes, an effective way of forecasting which regularly programmed slots might be optimal for advertising. I say this because people like to watch what is popular, which is evident when you take into account the trend of “must-discuss television” and award shows are a good way of putting not only programs, but certain celebrities on people’s radar. This topic is broached in the article “CW Chief Blames Shonda Rhimes…” when they talk about their new series “Jane The Virgin”: “The CW wants to give low-rated ‘Jane the Virgin’ time to find an audience and hopefully the nominations and critical support will drive viewers” (Reilly). I would think that the publicity series can earn through award shows are a helpful stepping stone for an increase in ratings and definitely something that advertisers might want to take note of as they vie to stay ahead of the competition.
Works Cited
Collins, Scott. "Fall TV's Ratings Winners and Losers - So Far." Los Angeles Times. 17 Oct. 2014. Web.
Reilly, Travis. "CW Chief Blames Shonda Rhimes, ABC for Network’s Sluggish Thursday Ratings." The
Wrap. 11 Jan. 2015. Web.
“Tops of 2014: Social TV.” Nielsen.com. 15 Dec. 2014. Web.
I am the least likely to be caught watching a live sporting event, or anything sports related for that matter, on television. With that being said, I still strongly see the value in commercial advertising during these events from an advertiser’s perspective. Nowadays, very rarely do people watch shows at the time that they air. The main exception to this is events like the Super Bowl. Not only are advertisers struggling to reach consumers through typical airings of television shows, but so are cable providers. The New York Times says, “sports are one major component holding the cable bundle together…many viewers will continue to pay for cable or satellite because of live sports programming” (Steel). With more and more viewers opting to watch their favorite shows on their own time using the Internet, cable companies have suffered due to these “cord cutters.” The main factor that is stopping many from cutting the cord is sports. So it seems logical that advertisers would want to advertise during these sports programs because that is what can guarantee a plethora of dedicated viewers.
ReplyDeleteAn issue that may arise with this logic is the increase of online live-streaming. According to the Wall Street Journal, there has been “an industry-wide initiative known as ‘TV Everywhere’” where networks like NBC have launched “a live stream of its broadcast network… to make more of its content available online via computers and mobile devices” (Flint). Just recently the Super Bowl was available online for live streaming. Other live television events such as the 57th Annual Grammy Awards have also aired online. Since programs like these were not commonly streamed online in the past, it seems like there might be a trend in live streaming of live TV events. What this may mean for advertisers is that they may run into more problems when advertising if they only rely on live events because live streaming requires different advertising techniques. Advertising may appear differently depending on the network hosting the live stream but it is still an area that advertisers should be concerned with.
To answer the question of whether the networks of major live television events are at an unfair advantage, I would say that they are. It seems almost monopolistic that they hold so much power over advertisers who will pay almost anything to have a spot during big events. Although raising ad prices during these programs has been a trend in the recent years, I am not entirely convinced that it will continue to be a trend considering the rise of live stream. In addition, Business Insider says that certain major TV events have been declining in ratings. This is the case with NBA and MLB games (Edwards). This is not to say that live streaming is the sole cause of this decline but I believe it plays some sort of role that may only increase in the coming years. So while live sporting events continue to be the saving grace for advertisers (and cable providers), it is important to note that this may not always be the case in the future. For that reason, advertisers should not exclusively rely on live TV but rather come up with innovative ways to stay ahead of the competition amidst the ever-changing media landscape.
Works Cited
Edwards, Jim. "TV Is Dying, And Here Are The Stats That Prove It." Business Insider. 24 Nov. 2013. Web.
Flint, Joe. "NBC to Live Stream Network Shows." Wall Street Journal. 16 Dec. 2014. Web.
Steel, Emily. "Cord-Cutters Rejoice: CBS Joins Web Stream." New York Times. 16 Oct. 2014. Web.
Tyler, I think your post about live TV is very interesting and makes some good arguments. It seems that live television will always have a place in the media world. There is nothing that I like more than tuning in every week and watching an episode of Greys Anatomy after a long Thursday of classes and work.
ReplyDeleteHowever, when it comes to advertising, it’s hard to determine if airing commercials during live TV for a general audience is the most efficient way to allocate a company’s advertising efforts. There is no doubt that the commercial will have a broad reach to millions of screens, but will it reach the right people? And how many people is it actually reaching?
When I watch live TV I am usually totally tuned in focused on the content – right until the ads come on. At that point I check my phone, scroll through twitter, grab a snack, and maybe even sneak in a game of Trivia Crack (if I’m feeling bold). With shows placing an increasing emphasis on live tweeting to their audiences, it is only fair to assume that viewers pay even less attention during the commercials due to the opportunity to continue talking and socialize about the show online.
Also, there are many conflicting reports about live TV and its popularity that make me skeptical of the actual stats and facts about how many people are tuning in. Some, professionals such as Investment banker Terence Kawaja, claim “linear television is a growth industry.” He claims that the industry is making huge monetary gains and won’t die off anytime soon (Yarow). However, according to business insider, Citi analysts Jason B. Bazinet and Joshua P. Carlson, the growth line for cable TV ratings was “persistently below zero” in 2013. The same article stated that about 5 million people ended their cable and broadband subscriptions between the beginning of 2010 and the end of 2013 (Edwards).
So how can there be no growth, and growth at the same time?
I think that this “growth” is due to the inflation of population and falsely perceived monetary value. It has less to do with an increase of audience share, and more to do with an increased population size and viewership potential. Now, almost everyone has a personal TV in their bedroom, as well as one in the living room and kitchen. Here we find the potential for a greater number of TV units to tune in to a program. While the number of television sets that tune in might be significantly greater, the number of people may not be. This allows networks to claim they are getting more views than before, and charge a steeper price for advertisements and create this “growth” that leads to more ad revenue. This revenue is printed in companies bottom line statements, which thus creates a higher perceived value of television companies and an increase in investments and share prices.
So Tyler, to answer your question, I do think that the media companies have way too much control over TV ad negotiation prices. Live TV may not be dying….it just isn’t getting all our undivided attention. We now turn to multiple screens and services such as our phones and Netflix, which has seen a huge increase in the number of subscribers and is becoming a top destination for original content (Levine-Weinberg). I think that advertising needs to transcend live TV and reach viewers on the multiple screens and platforms. You never want to put all your eggs in one basket.
Work Cited
Edwards, Jim. "TV Is Dying, and Here Are The Stats to Prove It." Business Insider. 24 Nov. 2013. Web. 8 Feb. 2014
Levine-Weinberg, Adam. "5 Things Netflix, Inc. Management Wants You to Know." N.p., n.d. Web. 10 Feb. 2015.
Yarow, Jay Yarow and Jay. "An Investment Banker Made This Epic Presentation On The Future Of TV." Business Insider. Business Insider, Inc, 06 July 2014. Web. 10 Feb. 2015.
Maggie Folsom
ReplyDeleteIf you look at Tops of 2014 ratings by Nielson, you will notice that the airing of television shows like Walking Dead, has roughly 1/3rd the audience that true live events like sports and the State of the Union get.
Since we have established that live events have extraordinary reach compared to traditional broadcast shows, the next thing is to compare the reaction of the audiences. Again in the Nielson report we see a major difference in the amount of tweets, with the live events generating numbers that aren’t even close to traditional broadcast programing.
For the final measure of comparison, is how do each of these resonate with their audience we will look at the ability for the programs to be narrowcasted. No doubt that many of the Television shows on Nielsons list can have a predicted audience like Pretty Little Liars or Girls, but it pales in comparison to the ability of sports to narrow cast not only to a specific gender, but also the a specific region.
It is not in question that live events carry major clout when it comes to reaching an audience and resonating with them. When the question is asked do the companies that own these major live events, like the MLB, NFL and other entertainment groups hold an unfair advantage when negotiating what channel it is going to be broadcasted on? I would answer no, assuming that what channels get NFL Football is determined by the highest bidder and not over the proverbial cigar in a smoky room.
What is possibly unfair, but still probably not-
As Edwards argues through various graphs Television audiences are shrinking, this means that broadcast companies are gong to squeeze out every dollar they can, by either raising subscriptions or passing along fee incurred during bidding for the event to the advertisers (11). Look at this case about the Winter Olympics that Tyler used in his lead blog “Similarly, a 30-second spot during the Winter Olympics in the same year generated between $360,000 and $490,000, which was about 3 times the rate of an average prime-time spot” (Bauer Insight).
Sure this seems to be the companies jacking up the rates to squeeze advertisers, but when looking at the Nielson article the audience of a live event is approximately three times larger than the normal one. Remember the advertisers are patrons to production they won’t get screwed.
Just to finish up with a creative look at how real companies use their own live events to cut out the negatives of negotiation. Take a look at what Viacom has done. Realizing the advantages they jumped on the idea of live events many years ago creating things like the MTV, Nickelodeon, VH1 awards etc. By creating their own award shows they do not have to go through the bargaining process between production and broadcast company. Keeping the cost down, while still reaping the benefits that live events bring to the table.
Edwards, Jim. "TV Is Dying, and Here Are The Stats to Prove It." Business Insider. 24 Nov. 2013. Web. 8 Feb. 2014
"Tops of 2014: Social TV". Nielsen. The Nielsen Company, 15 Dec. 2014. Web. 09 Feb. 2015.
On Friday, I was watching the news and an ad came up for the 57th Annual Grammy Awards. Immediately, I went online to look up the date and time it would be airing live. I then put the information into my calendar and put it to the back of my mind.
ReplyDeleteI realized several things throughout this whole experience. On Sunday, I found that most of my friends knew that it was the big day and a few asked what time it was airing. I even had a friend, sorry Julia, leave dinner to go watch it. But something strange happened. Two hours earlier, I had a conversation, sorry Tyler, with you. We were talking about it and out of the blue, I asked, “Do you think I can watch it online later?” Your answer was, “Yeah, absolutely!” Guess what ended up happening?
I didn’t watch it live. I had ever intention to, but I didn’t need to and here’s why. Everyone was buzzing about it on Twitter, so I didn’t feel like I was missing out. People were tweeting about the best and worst outfits, memorable moments, winners, etc. But here is kicker. I ended up looking up the list of winners and nominees condensed in a perfect little package for me via the website. And guess what I also didn’t do? I didn’t watch it online later.
And here’s why. Live events like this really have to be watched -- sorry to state the obvious -- live. It’s about the experience for the viewer. And social media just adds to that experience by allowing us to be able to voice our thoughts to the world and interact with one another during the event. I feel just as informed about everything that happened as if I had watched live. And the best part is that I didn’t have to endure any ads.
Now, I know you are talking about live sports events and advertisers. But this experience is what I foresee continuing to happen. As stated in TV Is Dying, And Here Are The Stats That Prove It, “People just don't watch the World Series like they used to. Recently, viewer decline is led by young people, according to Business Insider's Sports Page” (Edwards). Young viewers, such as myself, are advertisers biggest fear. And while I am willing to watch the Super Bowl, I really won’t watch other live sports events.
ReplyDelete“Nielsen ranked the top series, special event telecasts and top sports events across Twitter" (Nielsen). The top 6 live events on Twitter were The Oscars, The 56th Annual Grammy Awards, the 2014 MTV Video Music Awards, the Super Bowl XLVIII, and 2 matches in the 2014 FIFA World Cup (Nielsen). When comparing the numbers, it’s clear that sports events easily outrank celebrity events. And personally, I believe that advertisers are and will continue to take advantage of dedicated sport fans. They are very loyal live viewers. And I would agree with you that advertising prices during airtime of these live events will continue to go up in price. But the problem is that these viewers are a sports niche audience. Companies and advertisers can’t rely on them solely. They don’t make up the general population. So only those companies that are marketing largely or exclusively to this demographic can really benefit from buying ad space during these live events.
Thus, it’s time for companies to get creative. And as we all know, they are. But the real question is to what end? Come up with as many ways to try and get someone to view, listen, and be effected by an ad. But if pushed too far, companies and advertisers should expect to be met with defiance, disregard, disdain, or all of the above.
Edwards, Jim. "TV Is Dying, And Here Are The Stats That Prove It." Business Insider. 24 Nov
2013. Web.
“Tops of 2014: Social TV.” Nielsen.com. 15 Dec. 2014. Web.