MIAMI – From a perch like that of Joanna O’Connell at Forrester Research, it’s hard not to see the big picture in the roiling television business and what needs to change. Whether it’s the “insane” practice of continually chasing lower CPM’s or the “chicken-and-egg” Netflix business model.
Overall, the Principal Analyst believes that things are moving from “conversations about how the TV industry is evolving to action in the TV industry,” O’Connell explains in this interview at the recent Beet Retreat Miami 2017.
“It’s a massive industry. It was been very, very slow to change. And I think it’s still moving relatively slowly in a lot of ways for a lot of reasons. But the energy this time feels meaningful, as though we are graduating to action.”
Because of her grasp of the complicated adtech ecosystem, it’s easy for her to boil things down when the issue is consolidation of players. She notes that some companies are interested in owning the full technology stack, “everything from data management and analytics and data as an asset” through to execution.
Then there are “the other set of companies who, at least so far, seem less interested in getting into the execution game. When you look at consolidation, to me that’s the most interesting dynamic,” O’Connellsays.
The bottom line: will execution inevitably become “part of these massive clouds? It sort of feels like it will. And yet if you ask them, some of them deliberately take a stance that it won’t.”
While she appreciates the efforts of media companies like NBCUniversal to accelerate the shift from buying demos to audiences, O’Connell believes that things can only progress so quickly. There’s a lot of inertia in basic business dynamics.
For example, the traditional, procurement-driven practice of “getting CPM’s lower than the CPM’s that the agency achieved the prior year. Which is insane. I don’t know what else to say about it. It’s a crazy model.” A model of “rewarding efficiency and effectiveness needs to become more of the norm,” she adds.
Asked whether Netflix will go the ad-supported route, O’Connell evokes the chicken-and-egg causality dilemma. Are consumers demanding ad-free services like Netflix, or is the company driving change that consumers embrace?
Either way, Netflix has made some companies up their game, according to O’Connell.
“So when we are in an ad-supported model, it’s one that consumers don’t hate but actually find valuable. Let alone not annoying, can you imagine if they actually found it valuable?”
This video was produced at the Beet Retreat Miami, 2017 presented by Videology along with Alphonso and 605. For more videos from the event, please visit this page.
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