MBATV

What do you get when you combine a TV Fan with a top Business School education? MBATV - A look at television from an MBA's perspective.

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Netflix and Advertising

Will Netflix start selling advertisements? I don't know. If Netflix were to get into the advertising business, this is how I believe they would do it.

- Eschew 30 second ads for product placements

I don't think Netflix will ever run 30 second ads. It just flies too much in the face of their value proposition and the Qwikster debacle will have them being very careful about any future dramatic changes to the brand. Product placements? That I see happening if it doesn't already. House of Cards would be a great avenue for luxury products - I've already been impressed by the cars they drive. Orange is the New Black already mentioned numerous consumer products in Season 1 and I think could get interest from brands for future seasons.

One of the advantages Netflix has in its product placement push - is no fear of cancellation. Worried that your CMO won't see your episode 8 integration on Network TV because the show won't make it that long? Won't happen on Netflix. The question is would Netflix share their internal viewership data with advertisers? Advertisers can use a host of 3rd party services, including Nielsen, to judge product placement effectiveness on television but Netflix is a different ecosystem.

- Branded Categories

"Ford Tough" movies, "Snickers Satisfying Comedies," are the sort of movie categories I can see existing on Netflix in the future. Netflix has, and analyzes, a tremendous amount of data about their consumers and their movie viewership. When that gets married with advertiser targets (Nissan wants stylish people, Netflix has a list of consumers who watch movies about style icons), it could lead to branded category advertising.

Something to keep an eye out for in the future.

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The end of the 12-13 TV Season

With all of the excitement over upfronts and the new fall shows, we sometimes over look the completion of the traditional fall TV season. Below are my thoughts on the shows I watch

Survivor - It was nice to see Cochran win Survivor this season. This marks the 2nd nerd (Ian on Big Brother) to win a season. It symbolizes an interesting turn in reality TV where people who are superfans for many years can make up on enough pointers that there odds of winning are increased. It's like statisticians besting scouts in baseball.

The Office - The finale was more sentimental than I thought but I enjoyed it. Very few shows can lose their star and rely on a supporting cast the way The Office did. Was it amazing the final season? No. It was still good week in and week out for smart and odd scripted TV comedy.

Parks & Rec - Parks & Rec was strong again this year and will be the lone returning show from NBC's comedy block (30 Rock and The Office finalied this year). The show is anchored by the strong comedic performances of Aziz Ansari, Adam Scott, Nick Offerman, Amy Poehler.

HIMYM - As shows, particularly situation comedies, get older, the same thing continually happens. 1. There are far fewer great episodes 2. Fans settle for simply liking the characters and enjoying a few less laughs than normal. HIMYM has its moments but it is far off from its peak of being one of the most insightful and hippest comedies on television. The Barney/Robin romance has surprised me by showing how two charismatic actors can have so little chemistry as a couple. This probably validates the salary of Hollywood casting people. I will still watch the final season and I am hoping for the best even though early signs point to the entire season taking place in about a 52 hour span.

The Mindy Project - The Mindy Project is a good example of how a first season should go. Buzzed about pilot with a funny comedian ready for a starring role. A few episodes of finding yourself, episodes where elements start to click, picking up additional writers from successful shows (30 Rock), and then a consistent upbeat funny end of the season.

New Girl - This will probably take the cake as TVs top comedy next year with The Office and 30 Rock gone. Nick, Schmidt, and Jess have become some of the funniest characters on TV and the addition of some 30 Rock writers will probably have them evolve even further. The plots are laugh out loud funny and the show is really clicking on all levels with enjoyable fun characters doing funny things - the basic formula for a great comedy.

The Following/Revolution - Both of the shows are now stockpiled on my DVR. Having a baby will do this. At some point in the summer I may run through them but The Following has really dropped in my eyes. It went from an odd weird horror story to just a generic TV show.

Modern Family - A rare funny comedy the whole family can watch. I particularly enjoyed Hayley getting thrown out of college this year.

Suburgatory - Suburgatory works as a traditional family show and a  satire of American Suburban wealth. It is an interesting cross genre combination.

1600 Penn - This combo of the West Wing and Modern Family didn't work. I think the show had potential but in TV if you don't work out the kinks of an expensive show quickly, you are gone and 1600 Penn was canceled.

Girls - This oft talked about and low-rated show had a successful 2nd season. At times funny, interesting, and insightful and just as often boring and lost.

Top of the Lake - This was a 7 part Jane Campion miniseries on the Sundance channel. It's not amazing but worth a look. Stars Elizabeth Moss and has strong performances by Holly Hunter and New Zealand scenery. At its best, it is a cop show in a strange land. At its worst, a traditional cop show you would see in America.

The Americans - Best new show of the year. For a drama to be great it has to work on 2 levels 1. It has to be an interesting show 2. It has to say something on a higher level. If the show lacks one of those elements it won't work. The Americans is exciting every episode and makes interesting points about family, loyalty, and politics.

Inside Amy Schumer - At its best, this is the female Chappelle show. The show can be a little all over the place - Stand up routines, sketches, man on the street interviews, but it usually has 2-3 bits each week that are worth the 22 minutes. Some of the stuff is dead-on and very funny.

Archer - I love Adam Reed but I thought this was a very weak season. I still haven't watched the Finale but I have been bored by most of the episodes this year.

Nathan For You - A very funny new addition to the Comedy Central lineup that I suggest you check out on demand. Nathan Fielder offers business cooky ideas to drive revenue and then works to implementthem. Very funny.

I have thoughts on Mad Men/GOT but those seasons are on-going and will probably get their own writeup at some point.

[mbatv]

Brief Update

Hello fans,

     A couple of updates: I have both a new baby and a new job which has reduced my blogging time. Very excited about both though.

Things on my TV mind:

- Having a baby makes me watch a lot more commercials. I just can't get to the remote while feeding her.

- I enjoyed the 2 part premiere of Sundance's "Top of the Lake." I think it was very good, not great, and I am curious to see where it goes. Sundance had a twitter hashtag on the bottom of the screen the entire show which I didn't like. The experience is like watching an involving film and a hashtag on screen kept taking me out of the moment.

- I am interested to see how a lot of these distribution issues turnout. I read Viacom and Cablevision are in litigation, HBOGo is analyzing bypassing cable providers for internet providers, and Verizon is looking to tie Pay TV channel payments to viewership.

- What else am I watching?

   The Following works for what it is but it isn't special.

   I've been enjoying Legit on FX and The Nathan Show on Comedy Central.

   The Mindy Project is continually finding itself and getting better.

   I am excited for the return of Mad Men and Game of Thrones.

- The Colbert Report did an interesting Integration with Halls. Check it out here and let me know your thoughts - http://www.imdb.com/video/hulu/vi474654489/

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The Death of the Independent Cable Network

The above graph lists the top 25 Cable Networks by distribution according to the NCTA. The breakout by parent company is as follows:

Viacom - 6

Disney  - 4

Turner - 4

A&E Network - 3

NBCU - 3

Discovery - 2

Scripps - 2

Gov't - 1

Even the companies with the fewest top 25 distributed networks, Discovery and Scripps, have 11 and 6 total cable networks respectively. So how did we get here?

1. There are tremendous scale advantages to having multiple networks. Imagine the cost savings of having an entire sales force sell two networks as opposed to one?

2. There is affiliate negotiation leverage in groups. Affiliates have to carry flagship stations (MTV, TNT, ESPN, Weather Channel etc) so smaller networks can take advantage of these powerful partners.

3. The media conglomerates want homes for all of their programming. What happens to old cable programming that you can't really put into syndication? It goes to create new cable channels. VH1 Classic, MTV2, H2 (the new History channel spinoff). These conglomerates have a ton of content looking for a home and the power to create cable channels with this content as a base.

4. Cross Channel Promotions - Marketing is expensive. TV Networks should know - they charge a fortune for advertising. Being able to run free promos for a new show on MTV across all of the Viacom family (Spike, Comedy Central etc) is a tremendous advantage.

Independent networks lack all of these advantages. They don't have scale, they don't have much, if any, distributor negotiation leverage, they don't have a base of of programming, and they lack the ability to run free promotion on other channels. Based on July 2011 numbers*, The most distributed independent network was the Hallmark Channel at #41.

Is this a problem? The answer is primarily No. The good news is that there are a ton of viewpoints out there. Whereas someone probably couldn't find News aimed at the Hispanic population in the past, there are now numerous channels covering it and a new one coming from ABCNews and Univision. The government even mandated more minority oriented channels when Comcast and NBCU merged. Should one seek information elsewhere there are numerous YouTube channels and web based news sources. There are so many content portals now that no one should feel left out. The downside is that the media is primarily controlled by a handful of mega conglomerates (NBCU, Disney, Time Warner etc) and some smaller conglomerates (Discovery, AMCNetworks). The best way of getting your message and story out is through them and that may make some people uncomfortable.

To start an original cable network these days would be tough and probably not prudent considering the disadvantages. The new frontier is digital so that is where the independents should go to establish themselves just as cable companies did in the 70s and 80s. Of course the conglomerates will find them and look to this area too - http://www.variety.com/article/VR1118066356/

*http://tvbythenumbers.zap2it.com/2011/07/20/cable-coverage-estimates-of-of-july-2011/98508/

[mbatv]

My SNL Experience

I was privileged enough to attend SNL with my wife this past Saturday. Some thoughts:

- SNL is a magical show. The show has gone through its shares of highs and lows but there is always something historical and remarkable about it.

- SNL is unchanged except for the performers. My wife remarked that she was surprised they still use cue cards. They do it because they always have. The show, shot in a small studio with sets strewn about everywhere, could have moved to L.A to save money and get more space but that is just not the way it is. They have the same routine they had in 1975 and it will not change/ can't change.

- Going to SNL - it is fun to watch the performers and crew. Most have improv background and are dancing and laughing seconds before the camera goes on and they are beamed live to millions. You see the camaraderie of the cast too as they congratulate each other after a successful bit. It was also interesting watching Jay Pharoah, whose background is in standup and not improv, pouring over the script minutes before he was going to go on stage as Stephen A Smith. Jay is funny but I don't know if SNL is the best place for his talents besides as a showcase for his celebrity impressions. The crew is interesting because they work very efficiently despite the pressure. I witnessed a conversation about camera placements 15 seconds before a skit was starting but it all worked out.

- Lorne paces around on the floor during the show and no one talks to him. It is very similar to watching Bill Parcells on the sideline. In the SNLs I have seen, I have seen him only laugh once which was at a Tina Fey impression of Arnold Schwarzenegger.

- The nice thing about live TV is that it is efficient because it has to be. I used to do audience work on the John Walsh show, I have some funny stories about that experience, and the show would always start hours late. A live show does not have that luxury.

- SNL is a done in a hectic yet efficient week and that crazy environment helps bring out the best in performers.

- Happy to answer any questions I can in the comments section.

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This is an interesting article about the week 2 ratings for FX's The Americans, a show I highly recommend. The ratings "plummeted" according to the article with total viewers dropping from 3.22 to 1.97 million and P18-49 dropping from 1.57 to 1.07 million. The article mentions something more interesting towards the bottom when it mentions that the show grew 67% from its Tron Legacy lead-in. Tron Legacy had only 1/2 the viewers of the previous lead-in, the awful but yet watchable Tom Cruise vehicle Knight and Day. These ratings don't show a plummet as much as they show a dedicated audience that is tuning in specifically for the show. Shows like The Americans are not usually instantaneous hits but rather shows that grow with post season streaming viewership and viewer buzz. True the "plummet" does mean the show will probably not be a monster hit like say "The Shield" but this show looks to be a critical darling with enough viewers to keep it profitable.

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Going the extra mile

I was watching the Kroll Show last week which featured a Subaru commercial done by Nick Kroll as a character from the show. It was a smart branded entertainment effort and something that I am sure will generate high C3 numbers. The problem, though, is this appears to just be a one-off. I couldn't find the clip online. The Kroll Show website has no mention of Subaru. I google Subaru with Kroll Show and nothing relevant comes up. Why is that? There is value in creating this ad but the real value comes from a true integrated partnership. The Kroll Show has a funny Instagram page - why not involve Subaru there? Shouldn't the clip be a video ad on the Comedy Central website? I think in the future we will see more branded entertainment efforts but, more importantly, they will be parts of bigger Integrated Partnerships.

[mbatv]

A very smart decision by AMC. It is very important for cable networks to have something following a big original series. AMC has seen that reality following scripted usually does not work well, The Pitch and Small Town Security, but shows discussing shows, The Talking Dead, do well. I often find myself going online to read thoughts and interpretations after watching a particularly gripping hour of television so it makes sense to have this deeper dive show on-air.

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Integration Reviews - "The Office" and "Nespresso"

The "C" plotline of last week's "The Office" featured the gang using a new Nespresso machine and trying the multitude of flavors. The integration was set up with a lot of trust and it seems the Office cast and writers had a lot of leeway. It is great for Nespresso to trust an entertainment property like that. While I think the integration was successful in highlighting the Nespresso machine, the Nespresso plotline just wasn't executed in a particularly funny way.

Did it work for the viewer: The answer unfortunately is not really. A sitcom episode typically features 2-3 plot lines. Sometimes they all work and sometimes only one does. This was not the best episode of the show and this plot line was the least funny part of a sub-par episode. I don't believe this is the fault of the brand or the integration though. This plot may have fallen short irregardless because long running shows can not produce magic every minute every single week.

Did it work for the Advertiser: Yes. This was a prime placement and was truly woven into the story. I would estimate that a quarter of the show featured either use of or discussion of the Nespresso machine. The upscale "Office" audience, which most likely has a high concentration of office workers, were exposed to the idea of a fun espresso machine with diverse flavors that could be in their office. I would bet that real life office managers are getting requests for this machine.

Did it work for the Network: The network benefited because it shows the lengths to which NBC will go to do a strong integration. NBCU is open for branded entertainment business.

Overall I think this is a great concept and something NBCU should keep doing. It just got unlucky that the episode, and this plot thread in particular, didn't comedically click like the show is capable of. I think Nespresso is happy and that NBCU should keep touting its strong integration capabilities.

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Interesting talk about FX splitting into two channels - one drama focused and one comedy focused.

- This is a pure financial growth strategy. A 2nd channel will allow for higher cable affiliate fees and FX believes its shows are good enough to prop up a network and sell more advertising time.

- As a consumer, I'm not in favor of it. This will cost me more in cable fees and just continues this strategy of creating more and more cable channels around 1 or 2 properties.

- I wonder if FX research saw a big division in Drama original viewers vs Comedy original viewers. If there is a big overlap, you are risking losing viewers with this strategy by sending them to two networks. If there is not a big overlap, the idea makes more sense.

- Interesting how cable networks are different than broadcast channels. Broadcast is about filling time constantly and having strong leadins. FX is almost saying there is a maximum of original programming that works for them and once they hit that there are diminishing returns. A 4-5 night original strategy just doesn't seem to be a goal for them.

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The Bachelor Integration Review

This week ABC's "The Bachelor" did an integration with Harlequin Books. The girls were invited to compete in a photo-shoot to be the cover model for three new Harlequin books. I thought the integration was very successful overall in establishing the Harlequin brand to the right audience. I do wish they had gone slightly further.

Did it work for the advertiser?: Yes. Harlequin got great placement on a show adored by women who adore romance and making fun of people looking for romance. Whereas someone might want a cheesy romance novel and pick out any brand, now they may look for Harlequin. Any company with enough money to be on "The Bachelor" must have enough money to create good romance stories. Advertising! Harlequin also got a ton of added value from the blogosphere because the Bachelor is heavily written about on the internet. Ex - http://blog.zap2it.com/frominsidethebox/2013/01/see-the-bachelor-harlequin-romance-novel-covers---which-one-do-you-like-best.html . Harlequin probably wishes there was more conversation about the actual books or scenes of the girls enjoying reading them. Maybe next year.

Did it work for the network?: Yes. One group date a year generally focuses on a photo-shoot. ABC just monetized it this year. I do wish ABC would have gone further though. For instance, they could have done a licensing deal and created a co-branded new book or series of books. Wouldn't Bachelor viewers want to read a cheesy romance novel featuring a similar setup to their favorite reality show? Wouldn't they download it to their kindles immediately?

Did it work for the viewer?: Yes. Again, monetizing something that happens every year on the show is completely fair. I did not feel like I was taken out of the show at all. I also now have a brand name in mind if I want to buy a romance novel for my wife.

[mbatv]

My Winter to DVR list

Joe Schmo Show (Spike Tuesday 10pm) - A fake reality show where half the fun is figuring out if the "Joe" will figure it out. So far it has the right mix of comedy and suspense.

1600 Penn (NBC Thursday 9:30pm) - A broad comedy from a Modern Family Director and a former White House speechwriter about the first family. NBC is heavily promoting. It has been uneven so far but has potential.

Nick Kroll Show (Comedy Central Wednesday 10:30) The comedian from the League does a sketch comedy show. He has had some funny turns on television, including a funny recurring radio DJ on Parks & Rec, so I think the show is worth checking out.

Legit (FX Thursday 10pm) I trust FX so I give its new shows a chance.

The Following (Fox Monday 9pm starting Jan 21) - One of the best pilots I saw this year. From Kevin Williamson (Scream, Dawson's Creek), the show stars Kevin Bacon as a detective on the hunt for a maniacal serial killer. It sounds familiar but the show has an interesting twist on the genre.

The Americans (FX Wednesday 10pm Jan 30th) - See my previous statement about FX. An 80s cold war spy TV show by the FX brand sounds enticing.

Zero Hour (ABC Thursday 8pm Feb 14th) - Another strong pilot but I don't know how it will hold up as a series. Anthony Edwards (ER) stars in this Sci-Fi Historical Mystery about a man seeking his kidnapped girlfriend.

Top of the Lake (Sundance, Monday 9pm, March 18th) - A Jane Campion miniseries filmed in New Zealand about the disappearance of a 12 year old!?!!? Sign me up! I hope Sundance really promotes this because, if it is good, this could put them on the original series map. (http://www.sundancechannel.com/top-of-the-lake/)

[mbatv]

Business Lessons from The Bachelor

The Bachelor actually teaches us a lot about business. The show brings together attractive girls from all over the country to compete for one man. The strategic advantage these girls have, looks, is mostly taken away because everyone is attractive. Two lessons can be learned from this:

1. If you are going to expand your market, you better make sure you are the best. If this show was the top 25 delis, there is a good chance that your Akron Ohio deli may not be able to compete on the national stage. Other delis may have tougher customers, fresher produce, or access to better culinary schools that give them advantages over you.

2. If you are going to expand your market, you better make sure you understand the customer. Regions have specific tastes. A mayo based deli culture may not fly in certain regions. You should do your research beforehand to learn about customer preferences. The girl on the Bachelor who did 50 Shades of Grey did not know her audience. With research though, the expanding deli can have a few classic mayo sandwiches but adapt its menu to the less mayo-interested clientele.

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Ovation TV and the Future of Small Cable Channels

http://www.deadline.com/2012/12/time-warner-cable-drop-ovation/#more-390934

Ovation (OvationTV.com) was recently dropped by Time Warner Cable citing costs and low viewership. As a consumer who never watched Ovation, I am not concerned. A lot of the articles on this subject discuss the fact that Ovation was an independent channel (not connected to a major cable portfolio with supplier power) and how independent channels will struggle to succeed. It is a fair question and I could write about it but I am more interested in another question. Could the market be better served?

Ovation airs primarily, or most notably, ballets. To fill a 24/7 schedule, Ovation buys a combination of acquired shows (Antiques Roadhouse and So You Think You Can Dance reruns) and general entertainment movies (I saw Rob Roy on there). The problem is there is not enough on brand programming to fill a 24/7 network. Ovation, and Arts/Ballet programming, would probably be better served in a different way. As an On-Demand only channel perhaps. True, this would be a very different business model but one that may make more sense. Viewers who want to watch ballet, can watch whenever they want. The network could focus on engaging ballet programming for an upscale audience as opposed to a 24/7/365 schedule. They could focus on 1-2 advertisers as big sponsors instead of employing a sales force to sell all the available time. The network would get far less in affiliate fees but the programming/operational costs would be much lower. Ovation would be succeeding in its goal of bringing ballet and other arts programming to the viewers but in a much more efficient way. I think this programming has, and will continue to have, a place on television. I just don't think Ovation did a good job of bringing it to consumers.

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Top Chef Integrations Review

Bravo* has been one of the most successful networks with integrations due to a strong story about affluent viewers** who want to buy products and programming about purchasable products (food, fashion etc). I remember Project Runway Season 2 when Macy's sponsored a challenge and the winning dress would go on sale the next day. The dress sold out. The Bravo integration advantage has always been "the fit makes sense." Macy's selling a dress on Project Runway makes sense. The best integrations are the ones you can imagine happening if there was no money exchanged.

I caught the last two episodes of Top Chef and will review the 2 specific integrations I saw.

1. Truvia

In the Quickfire Challenge, the chefs are tasked to make a Holiday meal for a restaurant critic who wrote a famous viral review of Olive Garden. The idea is not to pack on the pounds though so Chefs are to use Truvia instead of sugar. So far, it is a very good integration. Making a healthier holiday meal is of interest and makes sense. The problem with the integration was the next part of the Quickfire Challenge. Chefs were told they could only use one shared knife. The storyline focused more on the chefs fighting and sharing the sole knife as opposed to using Truvia to make a meal healthier. When the chefs are questioned on their dish, they often focus on what they had to do with limited knife time as opposed to how they used Truvia to make a dish healthier.

Did it work for the Advertiser - Yes. Truvia got a prominent placement on a show with a direct voice to its target consumers. Unfortunately the combination of Holiday theme, Truvia, one knife, and viral internet person caused the integration to get slightly pushed to the back.

Did it work for the Viewer- The integration made sense and didn't take you out of the show. Having a brand make a holiday meal healthier works.

Did it work for the Network- Yes. Bravo has done great work in partnering advertisers with Top Chef - particularly the Healthy Choice/Top Chef meals partnership. This is a smaller one but works for the network.

2. Toyota

Toyota is a season long sponsor of Top Chef and has been for awhile. The cars are featured in every episode and Toyota gets numerous billboards and tagged tune-ins. The winner of the challenge in this episode got a new Toyota. Instead of this just being a name only prize, like on Gameshows when the winners get a new Toyota Prius and you don't learn much about it, Toyota was featured nicely in the show.

1. The contestants were very excited about the car. When the brand was announced, there was legitimate excitement from the contestants.

2. The contestants were imagining what they could do with the car and highlighted, very naturally, the trunk space and gas savings.

3. When you put this all together, you have a show about hip people who love cooking getting excited about this cool car. It is being watched by a demographic who loves cool and a suburban sub-demographic who needs trunk space. Watching contestants easily fill their Prius with everything they need for a big dinner party speaks directly to the Suburban Bravo viewers. Did you think a Prius couldn't hold your life like an SUV? It can.

Did it work for the Advertiser- Absolutely. They got excited contestants showing off their car and naturally highlighting important brand attributes to the right demographic.

Did it work for the Viewer - Yes. 1. It actually raised the level of competition as people really wanted to win the car. 2. It didn't take anyone out of the show. Top Chef is about all aspects of cooking so a focus on food transportation makes complete sense.

Did it work for the Network- Very much so. Toyota and Top Chef have had a strong multi-year partnership. This is the exact kind of relationship you want to have with an advertiser and the fact that Toyota keeps returning shows how much this sponsorship works for both Bravo and Toyota.

* Full disclosure - I used to work as a Sales Assistant for Bravo

** http://www.nytimes.com/2010/06/06/business/06bravo.html?pagewanted=all is a good article about Bravo viewer targeting.

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My 2013 Reality TV Prediction

My Reality TV prediction for 2013 is that something fake enough will happen on Reality TV that there will be a size-able effect on the industry. I'm not sure how big the effect will be. It might be as small as a dramatic viewership drop in a tarnished show or it might even be something that reaches the FCC. First, let me explain.

Everyone knows that Reality TV is not 100% real but unfortunately I think that many shows are much faker than they appear. Recently A&E's Storage Wars got hit with a lawsuit* claiming the show is fake and that bidding is rigged and items are placed into Storage Lockers to make the show more interesting. There has also been clamoring about TLC's "Breaking Amish"** and TruTV's "South Beach Tow" ***. There is a difference between mugging for the camera or inserting a challenge that plays to a cast member's big fear and staging a show and calling it reality. Personally, if I found out a reality show I was invested in was actually scripted I would be very upset and take issue with both the show and network.

Why script a reality show? The answer is easy - money.

1. Say for example you are a South Beach Towing family. I'll guess 10-20 interesting tow events happen in a year. Reality shows can't film for a whole year though, they film for a few weeks. That interesting stuff has to happen during the filming. This leads to truth bending.

2. Say you are a development executive or reality show producer. All of the buzzed about shows have fighting  or some crazy "drama." If your show doesn't have that, you think it will fail. Rather than simply hoping for drama, you get cast-members to fight on-camera to give you the necessary drama. If the "drama" leads to ratings, the executive and producer keep their jobs. If the shows lack excitement, they get fired.

I remember watching the Real World when I was in high school and they made a cast member with a deathly fear of water, Frankie, work on a boat. You could feel the hand of the Producers in that. More recently though, I've read treatments describing what will happen in each episode of a yet to be produced reality show. I don't think that is right.

I hope that Producers and networks have faith in the reality shows they create to be interesting and exciting without staging or scripting. I know this will not always be the case though and that is why I think something will happen this year to truly pull the curtain back on the genre and cause a major ramification.

* http://www.deadline.com/2012/12/a-called-fraud-by-cast-member/

** http://www.deadline.com/2012/11/tlc%E2%80%99s-%E2%80%98breaking-amish%E2%80%99-reunion-specials-downplay-fraud-rumors/

*** http://www.radaronline.com/exclusives/2012/06/jennifer-lopez-reality-show-south-beach-tow-fake-scenes-video

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Gossip Girl and the Failure of New Television Revenue Streams

If you talk to someone about new ways to make money from television, they will generally bring up a youthful show like Gossip Girl and say - "they should sell the clothes from the show." Yet the CW's Gossip Girl, based on my research, was more focused on a clothing revenue stream in 2007 when the show premiered than in 2012! Why is this? The tremendous advances in second screen viewing and apps should make the opposite true. On the Gossip Girl website today there was no link to any clothes or style section. When I google to try and come up with something - I get http://www.gossipgirlfashion.net/ which not only lacks any connection to the CW, I believe it lacks any connection to Gossip Girl at all and is using the name somewhat fraudulently to sell their products. I did find 2 websites featuring show clothing: http://www.milanoo.com/Gossip-Girl-Fashion-Dresses-c1004 and Fabsugar.com (http://www.fabsugar.com/Gossip-Girl-Season-5-Fashion-Shop-Looks-20258288?slide=4) which has a shop this look review of season 5. So why are we here?

The answer lies in organizational behavior. Do you know how television networks made money in 1950? Television advertising. Do you know how they make money now? Television advertising.* Networks are set up to generate advertising revenue because that is how they make the most money. They are judged based on sales figures and they have departments to best monetize advertising inventory. They are not set up to run a merchandising operation. They have no warehouses, no customer service people to do returns etc. No one has a P&L for alternate revenue.

This is an article I found about shopping the Gossip Girl look in 2007 (http://www.nydailynews.com/life-style/gossip-girl-style-sale-article-1.245938)

The article is about Gossip Girl style being for sale and do you know who is interviewed? Rick Haskins, The EVP of Marketing and Brand Strategy for the CW. The EVP of Marketing is responsible for drawing viewers to CW shows that the advertisers can then buy. His job is not to come up with innovative ways to sell products. He is judged on ratings. He could sell 2000 dresses but if the new shows are not getting buzz, he will be fired. Why is Mr. Haskins giving interviews about this? Why is he responsible? Why does the organization not have a Business Development Department, Digital Media Department, or even a Consumer Products Department overseeing this operation?

I once heard Salil Mehta, COO/CFO NBCUniversal, speak and he told the group something interesting about TV and Digital. He said the top digital people want to work at Google, Apple Etc, they do not want to work at a TV network. This is part of the reason networks are behind in this technology. The people who could be the industry digital leaders are going into other industries. The metrics for success at NBCU or CW or any network have not changed. Pick good shows, sell advertising, make profits. People will be hired and promoted based on their ability to do those things. Clayton Christensen wrote a very famous book called "The Innovator's Dilemma" discussing organizations and disruptive technologies. He famously discusses Western Union which had a chance to buy the Telephone patent. Western Union turned it down. Why? The organization was geared for long distance telegraph sales. That is what they did and people successful at it were promoted in the company. There was no manager with a P&L in new technologies and no one who would have any incentive to get involved in this untested technology. Innovation cannot be left to people who are solely rewarded based on succeeding at their current role. Networks need to have reasonably separate business groups dedicated to monetizing television in new ways. There is too much money being left on the table.

*Yes affiliate fees too