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Marketing Advisory: Jay Leno's Move to Prime Time and the Shift to Narrowcasting
The Marketing Doctor says:
Jay Leno’s Move To Prime Time Is Just The Beginning
Of A Major Media Shift That Will Make “Narrowcasting” The Standard
And “Prime Time” Obsolete
Folks, back in July, I weighed in on Jay Leno and the Tonight Show brand (that post here).
My premise then was that the big issue was not personalities or egos. It was how fast television was changing and how the broadcast model is now permanently broken.
The latest news is that Leno will not be leaving NBC in May 2009 but is instead moving to prime time. Again, this isn’t about keeping a big star. It is about cutting production costs across the board because advertisers are simply not going to pay the same rates anymore.
Moving the current Tonight Show host —still at the top of his game in the later time slot and format— to prime time represents nothing less than the kind of programming anarchy that you had back in the infancy of television… only back then, TV executives were discovering how to harness the incredible commercial power of a new medium. Now, as television fades, they’re trying to figure out how to squeeze out the last bit of juice.
Here’s confirmation of what’s going on (from the NY Times):
Executives involved in the decision said Monday that because ratings have decreased and costs are becoming more critical, NBC could reap an enormous financial benefit from this move.
Though Mr. Leno will command an enormous salary, probably more than $30 million a year, the cost of his show will be a fraction of what a network pays for dramas at 10 p.m. Those average about $3 million an episode. That adds up to $15 million a week to fill the 10 p.m. hour. Mr. Leno’s show is expected to cost less than $2 million a week.
What does all of this mean for the marketer and advertiser? Simple. It’s called narrowcasting (here’s the Wikipedia take). Basically, narrowcast is the opposite of broadcast. Narrowcast is essentially the way web-based advertising and interaction works: you tailor and target your message for a specific audience. It’s also called niche marketing.
Obviously, broadcasting is preferable because it has the best shot at reaching the largest number of people in one fell swoop. The only problem is that as technology has changed (cable television, TIVO, the Internet, et cetera), the idea of a captive audience is basically gone, as are huge audiences all watching the same thing.
My guess is when the business history of the last twenty years is written, people looking back will be amazed at how long it took for advertising prices to go down on television (both broadcast and cable). Wasn’t it obvious, I can imagine a future historian asking, that more outlets competing for an ever smaller and less captive audience should have meant that rates would be pushed down quickly in response?
Basically, I think it boils down to this: Television was so powerful for so long that even bottom-line thinkers didn’t recognize that its best days were behind it as a marketing tool. It’s also possible that the bottom-line reality that demands showing a return on investment might have been clouded by the same era of easy money that colored many bad business decisions over the last 15 years.
In other words, just like big advertisers traditionally didn’t question the value of Super Bowl advertising (see my take here; I bet you this year’s going to be different), they didn’t question the value of a big ad buy on television.
So, again, what does all of this mean for the marketer and advertiser? It means that prime time is soon going to be a shadow of its former self and that narrowcasting, or niche marketing, will become the standard. And as NBC’s CEO Jeff Zucker pointed out this week, television isn’t simply going to be recreated with the same advertising revenue clout on the Internet.
One thing that we’ll probably see happening after a while is less new content (because the money just won’t be there for production costs) and also more of the old-fashioned kind of corporate sponsorships we used to see. But folks, that’s what real marketing is all about… figuring out who your customers are and then letting them know how you are going to meet their needs.
And remember, it’s always easier when you keep marketing and branding in mind.
TODAY'S TANTILLO TAKEAWAY -
The more narrowly and specifically you can think about your Target Market and your Target Market’s needs, the better.
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