Old isn’t cool online either, Lachlan. But what is?

There was an opinion piece in this weekends AFR by Alan Stokes in which the author discussed the current situation at Network 10 and what Lachlan Murdoch in his role as interim CEO should do to win back the 16-39 youth demographic to Ten.

Stokes argued, correctly, that Ten had made a strategic error in trying to force its audience to ‘grow up’ and embrace news and drama instead of the younger, light entertainment content that had defined the network for the better part of the last two decades.

He also suggested that Ten had for too long looked to the Simpsons and Neighbours as key pillars for 16-39’s despite the fact most of the coveted ‘youth demographic’ had moved on from these two shows and onto edgier alternatives.

Instead, Stokes suggested Ten draft in Family Guy (which Seven has the rights to in AU and runs on 7 Mate), up its weekly broadcasts of Glee and Modern Family and turn 7pm Project more tabloid. He also suggested Ten ditch the Mum and Dad dramas of House, The Good Wife (I’d throw Blue Bloods into this category as well) and scrap Good News Week.

To round it out Stokes’s plan was to beef up the presence of Masterchef and expand the remit of One HD to become more about blokes and less about straight sport.

I liked the thinking but the only flaw was it didn’t really investigate what a similar approach would look like online.

From someone in the 16-39 demographic I feel as a viewer that Ten has erred old (for a younger skewed network) for the last 3 years. Shows like GNW, My Generation, Simpsons and Neighbours just don’t – to me – feel relevant for the 16-39 audience anymore. The two biggest phenomenons for TV in this demo are Family Guy and Jersey Shore, and neither are on Network 10.

Online it’s hard to tell where Ten really is aiming at. The digital options are led by TV so it, as a digital product, hasn’t really found its own identity.

However, from all reports Ten’s digital efforts are lean on costs and strong on revenue relative to audience. It’s main activity in the last 24 months has been around Oasis Active (a singles site) and Our Deal (a group buying site). It has also bolstered its video offering and under CDO Nick Spooner, it has fixed up what, for all intents and purposes, was a pretty limp digital offerings pre his arrival.

If Murdoch wants Ten to really own 16-39’s online where would it start?

First of all it needs to become the definitely go-to when it comes to insights around this audience. It is not presently doing this. My feeling is to ‘own’ an audience you need to understand them better than anyone else – and that extends beyond knowing how they watch TV. You want to understand their opinions, thoughts, needs around entertainment and content and be excellent at selling this to advertisers and helping them create relevant communication for this audience. This starts with data, insight and information as well as creativity and an element of gut feel.

Secondly, it needs strong offerings in the areas 16-39 audience use heavily online – music, entertainment, social, video, humour – and areas that have social currency.

Thirdly, it might need to expand what it offers up online beyond straight extensions of TV programming – ie, licencing international sites that play well around these categories and audience or buying up local sites with established audiences and extending these into TV through the multichannels.

The core challenge is adapting as quickly as the audience does – which is difficult with 16-39. The categories of music, entertainment, humour, social and video have been dramatically changed through the web.

Ten or so years ago music was radically different to how it is now. The way its consumed, the way its purchased, the way its reported, the way its discovered. Entertainment is the same – most light/gossip entertainment 10 years ago was discovered often weeks after it happened through magazines or through TV reports. Now it’s instant and immediate thanks to sites like TMZ. Video is another on demand channel – torrents have meant people can download whatever they want whenever they want – which has wreaked havoc with programming schedules as consumers are not willing to wait 6 months for shows to arrive in AU.

Humour and memes online have become big businesses. Sites like Cheezburger, Texts from Last Night, Damn You Auto Correct and F My Life have anywhere from 150,000 to 500,000 users every month from Australia alone. For many 16-39 year olds this form of entertainment has eaten significantly into TV. It’s edgy, topical and quick … it works for todays audience. Ten years ago this was a fringe activity online or relegated to joke email forwards.

And social and, in many ways, local are weaved within all of these categories now – a real challenge for a company built on a broadcast base.

If you look at Ten’s digital presence now it’s credentials in these areas aren’t as solid as they could be.

But if you could build these, and pair them with a reinvigorated broadcast suite for this audience and Ten’s sales team the upside could be significant.

For brands and advertisers it would surely be appealing – if there was a network that could link them to not only the TV content that 16-39’s liked, but their favourite music sites, short form videos and entertainment outlets on the web as well, it would be an attractive proposition if integrated smartly. Much more exciting than a few banners on the web extension of a TV title. And Ten could pull this off as they have a solid presence in the ad market with trust that has been developed over decades.

Add radio to the above mix (Murdoch has a significant stake in DMG) and you could create a multi channel sales approach which blends TV, radio and web. Radio could offer brand extensions for both TV shows and web brands. It could play a pivotal role in creating real cross media brands.

That’s even more appealing for consumers,  investors as well as advertisers. Seriously.


4 responses to “Old isn’t cool online either, Lachlan. But what is?

  1. The biggest problem that digital media faces is legitimacy. It’s happening, but not fast enough. Traditional media however has legitimacy, and as such, has significantly greater access to content (artists, celebrities, venues, events) and advertising revenue.

    The biggest weakness of traditional media though is that it relies on ratings and limited inventory. Digital media doesn’t have these barriers. You can create your own inventory. You can measure ROI explicitly. Advertisers will buy beyond just UB or ratings.

    At some point, traditional media companies will recognise that it’s weaknesses are the strengths of digital (unlimited inventory, explicit measurement, advertiser ROI, utilitarian value). But this isn’t going to happen overnight. At the moment, media organisations are using it as a minor extension to optimise the existing channel, rather than treating it as a content channel in its own right. The company that wakes up to this first will redefine media in Australia.

  2. While I missed Alan Stokes’ original article, by your precis Ben, I suspect that Stokes doesn’t quite understand ‘how television works’. It is not an open market. There is not infinite supply of quality content. Each Australian network has an ‘output deal’ with the American broadcasters and studios. That is, the US networks and studios basically lump all their content together on a ‘take-it-or-leave-it’ basis. The thing they haggle over is the price. Once there is an output deal in place these contracts tend to be quite long term (even up to ten years) and they tend to be renewed without change. The local broadcaster then gets all this content – good and bad – and tries to make money off it selling advertising time. The content is a bit like buying the ‘Mystery Show Bag’ at the Royal Easter Show.

    So, Family Guy is probably on Seven because of a content deal. Seven’s terms of the content deal may be that they can’t on-sell content outside of their own affiliates (i.e. Prime). So, while Stokes may make a valid point in that Family Guy probably should be on Seven, it may well be anti-contractual. And if you were Seven, and if youy knew it was a better fit on Ten, would you agree to on-selling it – no way!

    Regarding playing more episodes of Glee and Modern Family each week, well I am sure that David Mott would do that in a flash if it was possible. These are weekly shows in the US where they are made. The US generally runs up to 26 weeks of new content per annum. Our “television ratings year” is 40 weeks. We consume first-run content at a faster rate than nearly every other Western country that I know of. I suspect that Ten are running Glee and Modern Family hard on the heels of the US debut, while trying to keep a few episodes up their sleeves to get them to the end of November. (The 40-week vs 26-week discrepancy is the root cause of “Special Encore Episodes”).

    Local networks can also commission local productions (e.g. Neighbours, GNW, TAYG etc), and indeed have certain minimum local production requirements as part of their broadcast licence. [Full disclosure: my wife is an independent television producer with shows that have been on all FTA networks.] The issue is that as an industry we ‘import’ a lot more content than we ‘export’. The cost of a local production is pretty much on par with an overseas production, yet we have a local audience potential of 22m people. When a local production is made, the local broadcasters are not interested in selling it back to the rest of the world. That tends to lie with the producers and their international backers, which if you get a hit can be lucrative. However, we also need to consider that with the acquistions and commissioning budget you wouldn’t get a lot of change out of a million dollars a day.

    Given all the above caveats about how television does work and makes the networks tidy profits, I am still surprised that they are not expanding their commissioning sights to include on-line content that could transition to longer-form content on television. We have a healthy animation industry here which tends to be under-utilised. We also have talent like Natalie Tran who I believe would transition effortlessly. In fact, the network that seems to be closer to ‘getting it’ is the ABC, but I think that has a lot to do with them historically having smaller budgets and having to look beyond the usual suspects when it comes to studios and broadcasters.


  3. talkingdigital

    I wonder if web could work with the same output deals – ie, go to the US/UK etc – sign output deals with strong websites/content owners and pay a fee. Then represent them exclusively in AU in terms of marketing and advertising. It’s a straight TV model that I don’t think anyone in AU has really considered. AU web and content suffers from the same problem as TV production – the costs are generally extremely high in relation to the population here … generally the costs are on par with content creation costs in the US OR higher! The TV networks spend months and months chasing the best output deals, but for web they focus on the same old content models. Maybe this needs to shift.

  4. Tony Mittelmark

    As the significant portion of revenue does not come from online and the sales forces for both DMG radio and channel 10 are oriented toward order taking, the strategy of leading in online is very hard for a very difficult strategy for them to leverage.
    I agree the online interfaces and ad products should be much more sophisiticated and both businesses should be looking to create engagement and alternative revenue models online but this strategy requires a much more consultative approach with the client in order to really deliver significant revenues because outcomes must be delivered in online while both DMG and Channel 10 are used to passive aspirational modes of advertising.
    Passive advertising modes never really paid off online and especially now for DMG and Channel 10 to use online only as added value, which is the jump that they are prepared to make, is a mistake
    Personally, I would concentrate on getting the core media correct and acquire online models that make sense to the demographich when I was sure that the strategy for the core revenue was accurate and tracking

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