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article imageTV Networks Need to Wake Up Before Video Boom Leaves Them With Dead Air

By Chris Hogg     Nov 10, 2006 in Technology
Digital Journal — I have to admit, I don't understand the stodgy mentality of TV network executives. They say they work tirelessly to find programming that appeals to the lucrative advertising demographic of 18-to-49-year olds, but their recent actions totally contradict it.
Take, for example, NBC. The peacock network that was applauded for embracing YouTube earlier this summer, now seems to have its feathers ruffled. In recent news, NBC says it expects to be compensated by Internet video distributors like YouTube. The beautiful bird that proudly displayed its colours and appeared as a leading forward-thinker is now behaving like a turkey.
In October, the network announced it expects its digital revenue to exceed $1 billion (US) by 2009. It was planning on doing it through partnerships, more investment in online media and embracing the "viralness" of YouTube. "Success in this business means quickly adjusting to and anticipating change," NBC Universal chairman and CEO, Bob Wright, said in a statement last month. "This initiative is designed to help us exploit technology and focus our resources, as we continue our transformation into a digital media company for the 21st century." A smart move for any network that truly wants to promote itself.
But as soon as Berstein Research published a study that said about 60 per cent of the 100 most popular YouTube videos contain commercial music or video, networks have started stomping their feet like children in a temper tantrum.
Wake up, TV: You're going right back to the early days of music file-sharing when the recording industry screamed bloody murder and fought music downloads every step of the way. When Apple launched iTunes and completely rattled the industry, the music industry emerged scathed and badly beaten for not embracing technology.
With the rise of video giants like YouTube, everyone thought the lesson had been learned. The TV industry even recognized the potential promotional value of being on the Internet and went as far as adjusting contracts to incorporate online reproduction rights. Online video took off and millions are watching TV over the Internet — something many experts doubted would ever happen. Now that it has, networks don't like the word "free streaming" and seem to have forgotten what they were trying to do in the first place.
When it comes to networks like NBC, they should start paying attention to their own numbers: According to Neilsen Media Research, NBC came in third in October with the 18-to-48 demographic behind CBS and ABC. However, NBC was the only network to report an increase with this demographic. Write it off as coincidence, but I find it striking that the one big network who truly embraced the hip viral audience on the Internet is the only network to report an increase in young viewers.
I never thought I would say this, but networks should start paying attention to what the music industry is now doing. Warner Music Group, for example, now lets YouTube visitors use music and videos from record labels in their posts -- a total 180-degree spin from its previous hardline stance.
TV needs to get with the times. As some industry pundits are now saying, networks need to send a clear message about what they want to do for online video. You can't have marketing executives begging to have content put on sites like YouTube while, at the same time, its legal department is asking they be taken down.
The Internet is the consumer's domain, so if you don't want to join, then get out of the race. There is always something else we can watch.
More about Nbc, YouTube, Videos file-sharing
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