Wednesday, 23 April 2014

How online content creators can break into the TV news business


At the MIPTV conference in Cannes during the first week of April, online content was right at the center of the annual TV programming market. Dozens of online content producers were in Cannes, explaining what they do, who is watching and who is buying.

One of the most interesting sessions for news people introduced creators of “second screen applications” – online content for mobile devices designed specifically to enhance the television viewing experience, one of the hottest trends in online content development.

News and factual programming seem ripe for second screen applications. Here are a few thoughts for creators of online content who are thinking of pitching their idea to news organizations. As potential clients, news programs have some "special" characteristics, unique from the requirements of fiction, sports, reality and game show programming where second screen applications are already well established.

First of all, there definitely is a market among broadcast news organizations (both public service broadcasters and private stations, television and radio) for these types of applications. All the broadcasters are seeking, naturally, to increase their audience share and this remains a primary focus, something they are working on constantly. This is particularly important now, in an era of increasingly fragmented market shares.

The rollout of all-digital television in Germany in 2012, for example, with 100+ new channels, adversely and dramatically affected the market share of all the biggest players in Europe’s largest television market. Some of the majors saw program ratings drop by as much as 1/3 after the digital rollout, while very other small, previously invisible channels showed a dramatic increase in their audiences. Eventually the quality of the programs and how they are promoted will even things out, but there is a lot of concern about the changing dynamics in audience share right now.

The bottom line is anything that increases (or has the potential to increase) the market share of news and factual programming will be looked at with a lot of interest, especially anything that seems to attract younger, more educated and more affluent audiences, and for sure that's how online content creators should present their services to news organizations initially.

However, online content companies should also recognize that news organizations have certain characteristics which set them apart from other types of potential clients. Doing news is a source of a lot of pride within most parent companies, giving legitimacy and credibility in a way game shows, reality programs, entertainment, sports and advertising never could. Successful news organizations consistently draw large audiences and can be significant profit centers for their parent companies and, by reporting on issues of significance, provide real value to audiences and pride for their parent companies.

Key market success factors in news include a combination of credible, compelling content and talent, a relentlessly competitive attitude and a strong focus on promotion. The producers of news and factual programming are good at what they do. It's why, despite diminishing audience share every year, television remains the dominant medium for news and factual programming worldwide, why the bulk of advertising dollars still goes to TV, and why the source of so much content online is actually television.

One of the things that makes news a tough market for the new generation of digital / online content is that many news organizations are frankly not convinced of its real value. Definitely they all know they have to be there and they are doing it just like everyone else, but because the numbers they see are not particularly persuasive, for now they are not putting many resources into it.

The online units of many of the top tier broadcast news organizations are small, with few people working on it; the budgets for online content are usually a fraction of the overall news budget. The reason is obvious. While broadcasters recognize the phenomenal growth in online users over the past few years, which they can't ignore, overall the numbers for online are still disappointing compared with their traditional platforms. Lower numbers, less resources, it’s that simple.

So, while it's important to be there, for now online content remains a sideshow for the biggest news organizations. A common perception is that online content can increase audience share marginally in the direction of younger audiences, but not as something that helps their broadcast platforms, which have far bigger audiences and which are the main source of their revenue and profitability.

Decision-makers in news are tough, skeptical people. They do a lot of audience research and understand exactly what audience share is, where it comes from and what it means to their businesses. That's good news for online content providers, who will find a receptive audience for precise numbers-driven analysis, despite the perception that many of the top television executives are conservative people unwilling to move away from what they see as their "core businesses."

But there is a disconnect between what news people hear about online content and what they can see. Many of the fabulous claims providers of online content and data services make about what they are delivering seem like rhetoric and hype to experienced news executives. For example, the fact that Twitter right now is the heart of most second screen applications could be a challenge. When people from Twitter cite a number like "3.3 billion Twitter impressions" it may not be particularly impressive to buyers in news. Many news people simply don't understand what that means, or how it could possibly be useful to their business model. The fact that the Oscars 2014 selfie (which was an advertisement organized by Samsung) was the most tweeted image of all time says a lot about Twitter, and does not necessarily enhance Twitter's credibility as a serious news source. 

More importantly, the hot new trend of "seamlessly blending" factual content and advertising into what is known as branded content and native advertising, particularly online, is anathema to top news organizations. They have battled for years with advertisers, owners and general managers who wanted to integrate ad content into news programming. Today advertising is always "fenced off" in broadcast news, and the result is the most dominant news medium the world has ever seen. Broadcasters have spent many years building the reputations they enjoy (and the audience share and profits that go with it) and know how easily those reputations could be destroyed. They will always be cautious to use any content that has advertising embedded in it. In the case of many of Europe's public service broadcasters, the practice is actually illegal, violating their mandate to serve the public transparently.

The challenge to reach these buyers will be to show news organizations how online content can build audience share on their traditional broadcast platforms. That growth can be expressed in raw numbers, or potentially even more interesting, by bringing in a new, younger demographic to broadcast platforms via online engagement. Giving broadcasters the tools, via a second screen application for example, to do this would definitely be something they would look at.

My suggestions for online content producers who want to successfully develop clients in news and factual programming include:

- Make your potential buyers understand how second screen applications are not a mirror of television but indeed a totally different experience than TV; that it enhances the viewing experience without drawing audience away from it.

- Educate them about how to value and evaluate success in the online medium; for example, explain how "engagement" - now defined as number of hits/views + time of interaction - is a deeper metric and why it important for the specific demographics they are trying to reach. Explain that value in online content is no longer only about the number of unique views.

- The fact that the content of a second screen application could be "moderated" by a journalist will be very attractive to news organizations. This will go a long way toward defusing the concerns about commercialism/branded content in something that will be associated with a news product.

- Be clear about the numbers; audience share, demographics and trends. Positive growth comparisons are good (this year vs last year, broadcast vs online, etc.) Don't worry about small numbers overall; the important thing will be to focus on growth and the potential for that, particularly among younger users and the users of mobile devices.

- Be up front and transparent about the role ad content plays in your offer. Obviously news organizations are not against advertising, indeed they are largely dependent on it, but ads associated with a news or factual program need to be clearly labelled. Assure the client you are sensitive to how transparency about ad content works in relation to the particular application they are buying.

And here's the "holy grail" – if you can show potential clients in news how a second screen application would direct a significant number or demographic back to the broadcast platform, that would be absolutely epic. If this can be demonstrated consistently and very importantly, with the numbers to back it up, you could be looking at a huge breakthrough in developing clients in news.

My sense is that most news organizations not only want this type of service for their audiences, but are starting to realize that they cannot do this themselves. More and more they are recognizing they need real experts in online content development to make it happen for them; to show them what's out there and to show them how it can be done.

When it comes to providing online content and second screen applications, the interest and the desire is there in every news organization. But the value versus the costs need to be clearly expressed, as well as an understanding of how news organizations work to both serve their audiences and be profitable.