BMW's mini-series stars Clive Owen and is directed by star directors, such as Guy Ritchie. (c).
I previously discussed how television networks act as a three way match-making platform for audiences, content makers and advertisers. It was not always this way. In the distant past, advertisers heavily influenced the shows made for television. The medium was more akin to a two-way platform between advertisers and audiences: advertisers made shows for audiences interested in tuning in. This changed in the 1950s. With technologies such as TiVO and on-demand TV scuppering commercial breaks, are we now set to return to a world of advertiser made shows? In the 1930s and 1940s, the early years of television and radio, broadcasting acted more instinctively as a two way match making platform between advertisers and audiences. Advertisers strongly influenced and shaped content broadcast to the audience. This is evident in the naming of show titles, which included the Ford Star Jubilee and General Electric Theater. The influence of advertisers was such that, one story even suggests that the president of the American Tobacco Company made high ranking NBC executives fox-trot to the tunes of a show that the American Tobacco Company was sponsoring. The American Tobacco Company head wanted the NBC executives to test the tempos of the songs for dance-ability.
In the late 1940s, William Paley's CBS started experimenting with making shows in-house. The experiment proved successful, as CBS in-house shows started gaining larger audiences than that of shows broadcast by NBC. Everything changed when Pat Weaver, president of NBC in the early 1950s, broke the ties that advertisers had with the content that was broadcast. Instead of advertisers sponsoring a show and working with an advertising agency to make it, the networks made the shows themselves. The focus of the advertising agency moved to making 30-second commercials for the breaks in the shows. Later, rather than making the shows in house, the networks outsourced production of the shows to studios and production companies. This is what now leaves us with the three party platform of content makers, advertisers and audiences that network TV now is.
However, the arrival of technologies such as TiVO, on-demand TV technology and the Internet is creating difficulty for this three way matchmaking system. Viewers can now skip advertisements. Over the last decade, this has started to cause significant problems for advertisers, who have been spending money on commercials that audiences can now choose to skip. The response by advertisers has been a trend taking us back to the previous age of advertiser influenced shows. BMW has a history of using product placement. However, the company took this further with two series of short films featuring BMW cars. You can see the films here:
Will this transformation in advertising create moral ambiguity? Certainly. Advertisers and content makers will need to grapple with how brand sponsored content can be made ethically. Will this mean that quality TV programming will deteriorate? I think not. In the late 1980s and early 1990s, MTV pioneered the concept of the music video: the consumer tunes in for the advertising message. Investment in music videos increased, production quality of the content form sky rocketed and the music industry was forever changed. No one minds that it is advertising. What needs to happen for this to happen to regular TV shows?
Students at the Medill School of Journalism (Northwestern University) have built a web application, NewsMixer, that is a step forward in creating engagement between a news website and readers. Can this innovation be developed into a business? Some of the innovative highlights of the project are:
Questions and Answers. Against each paragraph in any of the news stories, the readers can ask a question or reply to a question previously posed. This feature allows readers to dig into particular parts of stories to get into greater depth, creating a conversation with other users and writers. The news story almost becomes a piece of writing that develops through threads spinning off particular paragraphs.
Integration with Facebook Connect. Users comment with their Facebook identity, which for most people is synonymous with their real identity. This forces greater trust between participants and discourages flaming and other bad behaviour that anonymous commenting on the web usually encourages.
Letters To The Editor. You can reply to an article, in similar fashion to how you might post a comment on a blog, or even write a new article. The editors can then choose to display your reply or newly written news article on the front page as a new piece. How many newspapers allow readers to write stories that could be on the front page? This Letters To The Editor feature reflects the dynamic of the internet age, where anyone can start a blog, and almost anyone can be a journalist.
The ideas are interesting and thought-provoking. However, as a web site, NewsMixer is very much a sandbox for testing and playing with the features; it is clearly not production quality. It lacks news feeds, quality control for comments, production staff and a number of elements that would be needed to turn it into an operational business. Gazette Communications in Cedar Rapids, Iowa, plans to do this - creating a production version of the site in early 2009.
While it will be interesting to see how Gazette Communications' implementation unfolds, how might NewsMixer be developed into a business into its own right? I have the following thoughts on taking this forward:
Add features to make the site self-sustaining. The Letters To The Editor functionality could be extended to allow users to post their own full news stories. Just as Wikipedia is moderated by users, users on NewsMixer could moderate the new stories, as well as the comments. A slashdot style Karma system could be used. The more that the site becomes self-sustaining, the lower the overhead costs will be in running the site. Given the plight that newspapers face, low overheads is particularly important.
Create barriers to reduce competition. The features of the NewsMixer site are sufficiently easy to be copied. As a business, this means competitors will easily be able to create copycat versions of the site, stealing readers and potential revenue from NewsMixer. If NewsMixer is to become a successful site and business, it needs to create some barriers that will make it difficult for copycats to prosper.
The best barrier would be that of a large user-base that finds it difficult to move to a competitor's site. In the same way that eBay buyers and sellers have invested large trading histories into eBay, building their brand and reputation on the eBay site, NewsMixer could further develop the ways in which users build their histories and preferences into the site. This could be done through the stories and comments that users post - building users' reputations on NewsMixer.
Develop a revenue model. Ultimately, any business will need to bring in revenue to pay for running costs and create a profit. The variety of current business models for online news is well documented. The larger the user base of NewsMixer becomes, the more it will be necessary for the articles on the site to be localised to communities. These communities could be centered around geographical locations, professions or anything else that makes sense. In the case of geographical locations, hyper-local advertising would seem to have the highest potential. In the case of professions, some professional communities may be willing to pay for articles, just as they pay for industry reports. Consequently, a mixed range of revenue models is likely to be necessary. Users can be motivated by providing them with a cut of the revenue, whether it be from advertising, user payment or elsewhere.
A more thorough analysis and business planning would be necessary to substantiate NewsMixer as a business, but the above provides my initial thoughts. The NewsMixer project is a great addition to the tradition of journalism innovation that comes out of the Medill. I'm looking forward to learning about the projects that will continue to arise from Medill's programmer-journalist scholarships.
The business of television is simple: using television programming, attract as many viewers of particular demographics as possible to watch advertisements. Television has traditionally always been a three way match making platform between advertisers, content makers and you - the audience. How will the internet change this three-way relationship? Traditionally the TV network (or station) has played the role of matchmaker among three parties.
Content makers, i.e. studios and producers, work with networks to create TV programs that will attract particular audiences. Golf tournaments attract older, affluent audiences. Shows such as Friends attract younger audiences.
Advertisers, using ad agencies, buy advertisement slots on the TV network. The advertisers use the TV shows' target demographic to determine which shows the advertisements should appear adjacent to. BMW, for example, wants to reach a large older, affluent audience. Starbucks targets the younger audience that might love to congregate in a coffee shop.
Audiences tune into to the TV network, attracted by the programming on the network. If all goes to plan, an older, affluent audience will watch the golf programming and also watch the advertising of advertisers, such as BMW, targeting this audience. Younger audiences will watch a TV programs such as Friends and also watch advertisements from advertisers, such Starbucks, targeting this audience.
If not enough viewers watch a particular TV program, as determined by ACNielson ratings, the network will cut the program to find another show that will bring in the audiences. The process is ruthless and the battle for viewer numbers is fierce. If the network has done its matchmaking job right, particular audiences will be attracted to particular shows in large numbers. The TV programming then becomes the vehicle for advertisers to reach the audience they are targeting. The ability of networks to attract funding, through selling advertising slots to advertisers, is related to how many viewers the network can attract. The greater the number of viewers, the more that can be charged for advertising. This reaches millions of dollars for advertisement slots during the Superbowl.
This matchmaking system is for the masses.
The individual viewer is not targeted. Particular times in the TV schedule are used to determine the demographic of viewers. For example, daytime TV is typically for 'stay at home mums', whereas prime-time is family viewing and late night TV is for adults. Particular TV channels also target particular types of viewers, e.g. the Sci-Fi Channel attracts a different audience to Al-Jazeera.
The advertising message is not targeted. You may already own the credit card that is advertised during the ad break. The commercial should then surely tell you about the additional features that can be bought with the card you already have. Instead, the advertising is generic.
The content is not targeted. If you are watching a documentary on the Internet, you might be watching to learn about the history of the Internet, whereas another viewer may hope to learn something of the technical infrastructure. On the flip side, some content does not need to be targeted: in some cases content makers have refined the art of storytelling to the point on keeping audiences enthralled throughout the program.
The deficiencies in this great match making system are largely due to technical limitations. Television has always been a broadcast medium: sending messages from one to many. There has not been a way for the three parties to easily and dynamically respond to the other parties. The Internet changes this relationship. On the Internet, if the individual member of the audience is logged into a website, it is possible to for the viewer to provide instant feedback to the others in the matchmaking system. Advertisers and content makers are able to change and adapt what is shown to the viewer. This enables a matchmaking system for the individual:
The individual viewer can control what they watch. The TV schedule becomes a schedule of when TV programs become available for watching. You are able to watch on-demand the programs that interest you.
The advertising message is crafted for the specific individual. Personalization will allow advertisers to determine what is the most appropriate messages to be sent to you.
The content is interactive. The high-end of interactivity is video games. The low end is flicking through segments of a TV show, as you might via scene selection menus on a DVD. The future will be shows that gauge your level of interest as you are watching, and craft the show to your tastes and interests.
The effect of the Internet on television will be to make the matchmaking ever more efficient. With efforts already under way to bring Internet TV to the living room, this may all happen sooner than we think.
A trailer for the latest version of News At Seven. With intricies such as mimicking the interplay between real news presenters, News At Seven perhaps competes too directly against traditional news media.
The McComick engineering school at Northwestern has produced an automated newscast called News At Seven. The show features computer-animated news readers presenting the news against images and videos about each news item. Each three minute program is auto-generated by scouring sources across the internet. Will this innovation take off and reach the masses? The theories of Clayton Christensen and others on disruptive technologies would suggest that is it entirely possible. However, as is the case with many disruptive technologies that succeed, News At Seven will need to take an unlikely path to get there. Otherwise it risks going the way of previous animated news reader attempts, such as Ananova. Start with non-consumers.
When the telephone first arrived in a world where the telegraph was king, or TVs first started attracting crowds away from cinemas, both these innovations did not attempt or even think it likely that they would change the status quo. The quality of both the telephone and TV was poor and they did not seem like they were a threat to the incumbent telegraph and cinema technologies. The telephone could only be used for short distances - from one building to the next. The television was considered to be visualised radio, with commentators seen reading what they would read on the radio. In the early years, both technologies attracted users that could not afford or did not seek the high quality of the mainstream technologies of the time. The telephone was useful for communicating between buildings, saving people from walking. The television was seen as a cheap form of entertainment. Later, the telephone's quality improved to handle long ranges - becoming a viable competitor to the telegraph. The quality of television programs also improved to start matching cinema quality productions. In this same vein, News At Seven should not attempt to mimic or automate news that is currently available to a high standard through current newscasting.
The people who watch news programs already have something that does this job particularly well for them, traditional news media. Attempting to compete against traditional news media on this trajectory will be an arms race that the News At Seven team will not have the resources for. News reading has gone from an anchor presenting the news against images, to including videos and visualisations. The future suggests anchors will even interact with what were previously background graphics. Rather than chase to match traditional news media, the News At Seven team should consider providing a news-like service to non-consumers. In the same way that the telephone initially provided something different to the telegraph, and the TV was cheaper, but entertaining, comparative to cinema, News At Seven could seek non-consumers of traditional news media. Examples could include
Highly personalised news for the younger generations. The users could give the News At Seven all the RSS, Twitter and other feeds that they regularly read. News At Seven could use this to produce a 3 minute video of everyone and everything the users are interested in. The younger generations, children and teenagersm are not interested in regular news programs, but enjoy and are comfortable with new media such as Facebook. They are also likely to tolerate cartoon news readers and be forgiving of the poorer quality of the news reading comparative to the real news readers of traditional media. These users may quickly take to the News At Seven style newscast, updating them on their friends and interests.
Video aggregation. As the amount of text content on the internet increased, RSS came alive. Sites that produced a lot of content, such as blogs and news websites, could provide a standard feed with all their updates. RSS readers enabled people to keep up with the latest updates from several sites. A similar problem is starting to occur with video. As more and more video becomes available on the internet, how will you be able to keep up with the updates? Just seeing the titles and screenshots of the videos in a search result or aggregated page is unlikely be a sufficient mechanism for keeping up to date. However, if you know you are interested in documentaries on Hulu, funny videos on YouTube and news from BBC News, perhaps News At Seven can take these sources and provide a 3 minute highlights clip - with the cartoon news anchors providing commentary from blog postings. The 3 minute highlight could be a jump-off point to watching the full length items you are interested in.
As personalised news for the younger generation or a video aggregation service, News At Seven would target markets where there is no competition. Building a successful service is areas such as these will motivate News At Seven to improve it's offering, as its revenues and resources increase. In the same way that the telephone eventually improved to compete and overtake the telegraph, and the TV so successfully competes with cinema now, News At Seven could then expand its quality across its service to compete more effectively with traditional news media.
Be wary of the Medill
When MP3s first appeared, record labels relying on CD sales shrugged their shoulders and dismissed the entrant technology. Record labels did not have the expertise and resources to understand let alone compete with something as alien to them as a non-physical items, MP3s. Secondly, the processes of the music industry were matured over decades and specific to selling music on the high streets as efficiently as possible; these processes could not possibly adapt to the online world where goods could be transmitted in microseconds. Thirdly, the music industry were intent on making as much money as possible through physical sales: with MP3s initially only in small numbers, the value systems of the retail stores dictated investing in existing production of physical CDs rather than investing in technology that allowed copies to roam freely - it just made more financial sense to do so. Consequently, the Resources, Processes and Values (RPVs) - everything that constituted a record label - worked against the record labels dealing with the threat of MP3s. Time and time again, the RPVs of incumbents leaves them confounded and unable to tackle disruptive technology threats.
The Medill school of journalism is a powerhouse at the door step of the News At Seven team. However, Medill is an engine for current traditional media technologies. It produces journalists seeking job titles and with skills specific to traditional news media. Medill works to support the RPVs of traditional news media. Paying too much heed to the advise and requirements from Medill could leave News At Seven as just a poor version of existing traditional news media output. It is to the benefit of News At Seven that is housed in the McComick engineering school, where the RPVs are entirely different to Medill. At McComick, the resources exist to understand the technology behind News At Seven. In the separate hub of McComick, News At Seven is also free to independently create the new processes required to support automated news. The values at McComick, which push the boundaries of technology, will also support News At Seven's mission. If News At Seven takes a disruptive path and is successful, it will upset the process and roles that are common now in traditional news media. A world with automated news would require people with different skills to support such a system, and the use of entirely different processes to support automated news. This in turn would challenge Medill to support this emerging industry, in the same way the music industry was challenged to support MP3s. However, in taking a disruptive path, News At Seven can still garner value from it's relationship with Medill. Through Medill, it can seek to understand the value chain for traditional news production.
Understand the value chain.
Mature industries are ripe for disruption. In such industries, there are well defined processes and documented standards. An example is brick-and-mortar stores. There are well understood mechanics for producing goods such as books, distributing them to stores through trucks and selling them through retail outlets. The different parts of this chain, which Christensen et al refer to as 'modules', have well defined interfaces. This means that each part in the chain could be substituted for any number of other similar parts. The retail outlet could be Waterstones, Borders or even an independent retail outlet. The trucks could be operated by any number of distributors. The books could be produced by any number of publishers.
The Internet, and online stores such as Amazon, have disrupted this value chain by integrating two of the modules, the distribution and retail. This integration adds a new interface, to the postal service, to ultimately deliver the goods. This integration and re-carving of the value chain is what enabled Amazon to produce a different, disruptive proposition to retail outlets.
Comparative to the brick-and-mortar value chain, the online Amazon value chain reduced the quality of some aspects of what was offered to consumers: they are not able to touch and feel the book they are buying; they are also not able to take possession of the book immediately (waiting instead for postal delivery). However, the online value chain increased the quality of other aspects of the service: a larger catalogue of books is available than in any one retail store; you no longer needed to be in a retail store to purchase a book. People seeking to do the job of 'gaining specific knowledge' could now do so much more easily than through the previous effort of seeking specialist book stores.
Concentrating on the job to be done is paramount. Reporting the same news as traditional news would be the job to be done of greatest competition and difficulty for News At Seven. Alternative jobs, such as personalised news for younger generations or aggregating video highlights, are jobs that could take a more disruptive path. In taking any such path, understanding the existing value chain will allow News At Seven to tinker and determine the parts it needs to integrate across to produce the service that best serves the job to be done.
A simplified value chain for news production may be something like this: News reports arrive through feeds, such as the Associated Press, or a station's own correspondent. A producer takes this, and other reporting, to create a news piece for broadcasting. The anchor on the news program reads the news and presents the producer's output. This is broadcast to viewers on television and those watching the same news on the Internet.
News At Seven's automated news cast changes the value chain by integrating the role of the producer and news anchor.
The areas where the quality of the service is reduced is clear: the quality of the presentation does not compare to that of traditional news media; credibility and fact-checking are likely to be poor also. In which parts of the service does the quality increases? This could be personalisation or non-news aggregation. However, is News At Seven integrating the right modules to serve the job to be done? If News At Seven did not use feeds and reports from other providers, what would the service be like? Would journalists be able to report on and create more news items because the actual presentation would be automated and require little effort? Alternatively, what if News At Seven integrated across the distribution mechanism instead? Rather than be broadcast from one of the many websites on the internet, perhaps it could be one of the more limited number of free iPhone apps? Perhaps websites such as Nike's might appreciate athletic news related to the stars Nike sponsors. Understanding how News At Seven fits into the value chain, and how it will re-carve it, will enable the service to better serve the job to be done.
Can News At Seven triumph?
The theories of disruption suggest that it is certainly possible for News At Seven to succeed, but only if News At Seven follows a disruptive path:
Competing against traditional news media in providing traditional news is an arms race that News At Seven is not resourced to win. News At Seven needs to seek out non-consumers and work with the strengths of it service in the areas where its quality is already greater than traditional news media. For these non-consumers, News At Seven needs to serve jobs that are not currently adequately performed for them.
Housed in McComick, News At Seven is ideally placed with the RPVs to grow the technology effectively. Medill is a powerhouse of RPVs unsuited to exploit News At Seven. News At Seven may need to redefine processes and roles that Medill is familiar with.
Understanding the value chain that News At Seven is affecting will allow the News At Seven to understand if it is integrating and re-carving the chain across the right modules. Are the modules that News At Seven is re-carving the most effective for enabling it to serve its job to be done?
