Media distribution is becoming fragmented much quicker than the currency can handle.
I'll go out on a limb and say that we're within a year or two of being able to access all television, newspaper, and magazine content over the Internet within a very short time following its release in its traditional channels. And, potentially, before it's released in its traditional channel. Nowhere does this get as complex as it does with television.
I hadn't been deeply aware of the immediate issues behind the writers' strike that affect television, but Shelly Palmer clarified the issue in a recent blog post quite nicely. I understood the writers wanted to be paid for digitally distributed media, but I didn't understand they wanted to be paid per stream. This is easier said than done, and Palmer does a good job explaining they'd be better off asking for a percentage of the revenues (gross or net) rather than a per-stream fee. Today, that can't be counted easily -- if at all.
A major problem is brewing: media distribution is becoming fragmented much quicker than the currency can handle.
"Currency?" you ask.
The concept of currency in media is relatively simple. It's the mechanism used to value the media that's bought and sold. In TV, that mechanism is Nielsen ratings, an audited means to measure viewing audiences. It's how media buyers and sellers determine how many ads were delivered and, therefore, must be paid for. Nielsen does this via panels; a group of randomly selected households act as a proxy for what the rest of the country is watching. Other media and countries use other mechanisms to count the number of people who saw ads (or watched a show).
The digital distribution model will follow what we do online, at least for starters. Online, we count ad views using ad-server numbers as the currency. The Media Ratings Council (MRC), which is the same group that audits and certifies the numbers for Nielsen offline, helped put together the audit guidelines for online impressions. Between the Interactive Advertising Bureau (IAB) and the MRC, it took years to get the impression audit guidelines completed. Because online technology is shifting so quickly, the guidelines must be updated frequently. This may well be beyond the scope of the IAB and MRC to handle.
When you look at the likely shifts in media/content delivery and related requirements to deliver and count delivery of ads and content, it's cause for still more concern. The Writers Guild of America (WGA) is forcing this strike at least in part over the demand writers get paid for views of digitally delivered shows. But there's no formal mechanism to ensure the counting of viewed shows across all the possible delivery permutations is accurate, or normalized. Meanwhile, new ways to distribute content electronically appear all the time.
Quick examples: Streaming Web video; streaming/downloaded video to a software application (Joost, BitTorrent); downloaded video to a TV (Xbox, Tivo, other DVR); downloaded video to a device (Zune, iPod, mobile phone), time/location shifted video (DVR, Slingbox); AJAX Web applications; and so on.
All these distribution methods require counting mechanisms that can act as currency. In other words, they must be audited. And while the IAB and MRC have taken on audit guidelines for rich Internet applications and AJAX, it took a long time -- and they still don't cover the rest of the spectrum.
It will be interesting to see how the WGA figures things out. But as Palmer points out, negotiating a pay-per-stream model probably isn't ideal.
Eric is off this week. Today's column ran earlier on ClickZ.
Join us for ClickZ Specifics: Online Video Advertising on July 22, at Millennium Broadway in New York City.
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