Retrans fees no long term strategy


Retransmission, in my opinion, has injected much needed liquidity into the content marketplace. Currently broadcast groups are counting on retrans fees to make up for the advertising slide.   This new found cash infusion from content, however, could also be used as a bargaining chip to launch future services.  Broadcasters should not just focus on the monetary gains of retrans, but rather they should also look to use this bargaining chip to forge new technical and data partnerships with cable companies.

For example today tens of millions of cable subscriber homes have, or will have, the capability for interactive RFIs (request for information) applications. Simple applications that once the consumer clicks the remote control the TV click response is then sent to the cable subscriber’s account and perhaps a coupon is then mailed to the house.  In the same breathe the cable industry is also starting to roll out TV Everywhere to at least 30 million households.  So that this same consumer, who got that mailed coupon, can also log-in to TV Everywhere and watch videos.   Local broadcasters need to get involved in both of these efforts.

Since both innovations are pulling data from the cable subscriber record I predict that within a couple of years the industry will streamline the fulfillment process so that I can retrieve that same “coupon” directly from the advertiser’s website linked inside my TV Everywhere account. In other words, I should be able to click my TV remote and forward advertiser offers to my TV Everywhere account (or another portal of the consumer’s choosing). Kind of like a giant account linked to your favorite television programs and merchants.

Through this method the ROI can now be calculated directly off the exact TV commercial and it’s corresponding website. This integrates the Internet seamlessly into the TV platform and now media planners could plan directly off of real customer data.  Think of it.  Tens of thousands of TV advertisers will be able to build cross platform measurement statistics off the opt-in TV click and customer records. Media schedules can be built off these real customer insights.  I call this the “Continuous Loop Theory for Advertising”.

The “Continuous Loop Theory for Advertising” is when the TV click data is sent from the TV platform into e-commerce engines;once the ROI is crunched the results are then entered back into the TV platform via media schedules. Advertisers’ efficiencies should improve across both the TV and the Internet on an ongoing basis if done correctly.   Switched digital video, video on demand advertising, and network DVRs become very important in this ecosystem as these funnels can be linked to the continuous loop.

The continuous loop also provides stability to Erwin Ephron’s recency theory as each click will provide direct insight into when the message was most effective.  If the loop method is implemented I think TV planning and media software initially won’t change that much — especially at the start —  except that the planning data used will be cross platform metrics tailored to each advertiser. I also think it is best if the proprietary opt-in television clicks are also stored inside each advertiser’s e-commerce platform. The greater the computer power harnessed for each company’s analysis (across the tens of thousands of TV advertisers) the more relevant the media placements will organically become for all advertisers.  New money will flow into broadcasters from the direct marketing and Internet advertising sectors.

If over the coming year interactive EBIF technologies begin to deposit TV clicks (in the form of web bookmarks) into the TV Everywhere platform “it could be the shot heard around the Internet world”.  But to be realistic this proposed business model is not an overnight proposition. Broadcasters would need to be prepared to invest time and money in getting it off the ground. I believe that by implementing the “Continuous Loop Theory for Advertising” the unrealized value that we know exists within every local broadcaster can finally be unlocked. The path to the industry’s potentially bright future (under this proposed model) could probably be introduced into an upcoming friendly round of retransmission talks. I think this just might be the path to addressability.

Michael Kokernak is the CEO and President of Across Platforms, Inc. Across Platforms, Inc. is a multiscreen technologies consulting firm.  Michael has written about broadcast TV and interactive efforts. Michael is also the founder, and past CEO, of Backchannelmedia. He can be reached at [email protected]