Home >> innovationtitle_li=media >> Maybe not #NBCfail or #TwitterFail, but #businessmodelfail?

Maybe not #NBCfail or #TwitterFail, but #businessmodelfail?

by Farrah Bostic on July 31, 2012

On Friday night in London, Danny Boyle showed us what England has to be proud of.  Their contributions to sport, industry, technology, literature, music, were brought to life through music, dance, film and a remarkable stage.  The sometimes-witty, sometimes-silly, often-self-deprecating British humor shone through.  While Beijing’s opening ceremony was a demonstration of the Party’s vision of Chinese history, a perfectly coordinated, monolithic, prideful and proud display of a culture feeling pretty good about itself, London’s managed to pluck at heart strings and play for laughs within the construct of controlled chaos.  Which I suppose is Boyle’s signature style.  That and lots of children singing.

Now, I watched the live BBC stream through a VPN service, which means that I could watch at the same time as my friends in the UK, that I did not have to listen to Bob Costas or Matt Lauer or Meredith Vieira, and that I did not have to sit through commercial breaks.

You might think this is the liberal northeastern elite version of me talking, finding ads and the cast of the Today Show so very middle America, so very pedestrian.  And you might think of me as living in the tech bubble because I used a VPN to watch a British feed, and then tweeted about the experience.  But as I was watching my liberal fantasy on my tech bubble connection, I only had to look at Facebook and Twitter to see the VPN have-nots were very unhappy with the American broadcast television experience.

The Tape Delay

People were angry about the tape delay, starting nearly 4 hours after the actual ceremonies.  You’d think we’d be used to tape delay, but the truth is that when it comes to global sporting events (The Olympics, the World Cup), people will get up or stay up to watch the actual event on whatever satellite link or cable channel that will provide it in real time.  And with the advent of real time, global social media, many people are hearing about what happens before they can see it themselves.  We call this phenomenon the ‘spoiler’ for a reason.  Knowing what happens ahead of time spoils the experience.

The thrill of the Games is still there for many people, watching the tape delay, but while we were watching the women’s gymnastics teams in their qualifying all-around competition Saturday night, the athletes participating in the games, the journalists covering it in North Greenwich, and the good people of London were asleep.  Those events had happened hours before.  Now the broadcast became the backstory – we knew which members of the team had qualified for the finals competition in Women’s Gymnastics, and we knew that the US Men’s Relay team had blown first place.  We were watching to see how that happened, but not as it happened.

The Editing

The second price to be paid by the US television viewing audience was one of completeness.  It’s impossible to watch every second of every competition, and nobody wants to, but the opening ceremony was one scripted performance.  If you tunneled into the UK via a VPN service, you saw the complete performance; if you watched on NBC later that night, you got the edited version.  In fact, you completely missed a dance tribute to the 7/7 attacks, instead seeing Bob Costas interview Michael Phelps.  I don’t think we even have to argue that if another network preempted a tribute to 9/11 to interview the captain of the swim team, Americans would be outraged.  And when the Brits heard what happened on NBC after they’d gone to bed, they rightfully were.

The Stupidity

Related to this is, perhaps, a third price. NBC’s handling of Olympics coverage thus far has come to be known on the web as #nbcfail – but it’s clear that this is about a couple of things.  One is just the disappointment of not getting what you want, but the other is embarrassment.  I think some members of the social media dust-up are embarrassed the American sporting press would be so… bad.  Maybe it is, in its way, another example of Ugly Americanism.  The Yanks think the games are all about them, which is why they wait to watch when it’s convenient for them, which is why they cut away from a moving tribute to the victims of a terrorist attack (that took place the day after London won the Olympic bid, 7 years ago) to interview one of their athletes, which is why the announcers seemed almost proud to have never heard of Sir Tim Berners-Lee (inventor of the World Wide Web), which is why the term ‘money shot’ was used in reference to Her Majesty, Queen Elizabeth, as she opened the ceremonies, as her father did the last time the Games were in London (in another time of austerity).

So, the critique among the twittering classes was that NBC was out of touch, out of date, and out of time – that this woeful misunderstanding of the power of realtime social networks in transmitting information about the ceremony and the ensuing Games would no doubt backfire on NBC one way (in ratings, not yet) or another (in good will, right now).  Even the bartender in the pub on Sunday afternoon complained about NBC’s coverage of the games; the camera had been trained on the faces of the Women’s Gymnastics team, but not on the routines they were watching.

Interestingly, across the pond, viewers there complained about the BBC announcers’ lack of knowledge of cycling, and the quality of their commentary across a variety of sports.  So at least there is some good news for NBC: they’re not alone.

It’s hard for me to say whether this year’s broadcast is substantively worse in quality of commentary or coverage than in previous years, or whether the wealth and availability of real time and in-depth information about the teams, athletes and competitions elevates the audience’s expectations of coverage.  But it’s clear that the audience expected something better, and so far, hasn’t got it.

But here is the essential problem.  The audience wants a better product experience, but what they don’t seem to realize is that *they are* the product.  The customers for the IOC and NBC and Comcast are advertisers – those big brands who paid for exclusivity and fierce enforcement of that exclusivity, but don’t seem to be getting much credit.  NBC and its cable provider parent Comcast paid $1.2 billion to the IOC for broadcast rights.  No wonder they only permitted paid subscribers to MSNBC or CNBC to watch the livestream on nbcolympics.com; no wonder they interrupted the opening ceremonies to show commercials; no wonder the coverage of competition feels sub-par and strained.  They have sponsors and advertisers to serve, and money to recoup.

The way they do that is promising brands aggregated audiences who are likely to see the advertising that occupies 16-18 minutes per hour of prime time American television.   To make good on that promise, they do all they can to ensure we’ll be there when they said we would be – so they circle the wagons of content access.  No truly free livestreams, no commercial-free or -limited broadcasts.  If we could watch it for ‘free’ on the web, without commercials, whenever we felt like it, we wouldn’t need that $100+ cable subscription, and NBC wouldn’t be able to charge hundreds of thousands per half-minute to P&G or Coca-Cola or McDonald’s… and by extension, they wouldn’t be able to afford the IOC’s asking price.

New Media Joins the Fray

This morning, #nbcfail was joined by #twitterfail after the Telegraph revealed that Twitter shut off the account of a journalist critical of NBC’s coverage of the games (who had also tweeted the public, business email address of the president of NBC Olympics), after they reported the journalist’s critique to NBC and told them how to file a complaint against him.  Twitter and Comcast/NBC have a partnership in place where Twitter features highlighted tweets from NBC accounts in return for on-air promotion of the service.  While there was no money that changed hands, apparently, those hands are not clean.

Jeff Jarvis and others make the argument that Twitter should observe the church/state boundaries between news and advertising that newspapers pretend to observe, or risk losing their credibility.  But I’d counter that again, this is a misunderstanding of the business model.  Twitter is following in NBC and the rest of Old Media’s footsteps.  Their users are the product, the third-party developers who made the experience what it is are now friendly adversaries – they’ve chosen a sponsorship and advertising based revenue model, not a subscription one.  For us to use Twitter for free, for this platform that has done so much good and changed so much about the way many people communicate to continue to grow, they need to find a source of revenue.  And featured/highlighted/sponsored tweets are the path they’ve chosen.  When they did that, their product stopped just being the platform, and began to include the audience the platform gathers.

The problem (and it’s hard to say how big a problem it is) for Twitter is that the people who use it the most, and who’ve used it the longest, are pretty sure that they are writers and editors of the content on this platform called Twitter; that they are the customers of this product. It’s much harder to introduce advertising into a fully-vested community than most social media startups understand; it’s not just an intrusion, it’s an invasion.  The members of the community who took some pride of ownership in helping to make Twitter a fun, smart, interesting, dynamic place (or a dull, stupid, bigoted, repetitive place, depending on your feeds) believe they have rights, too.  But those users don’t write checks to Twitter; McDonald’s, Coca-Cola, P&G, NBC do (disclaimer: I have no idea which of those brands pay for promoted tweets, I’m just saying, brands).

Twitter, like NBC, is not a charity.  That’s true.  And besides, more cash into the platform or newspaper theoretically allows them to do more for the audience; and they need to do more for the audience so the audience will turn up.  As long as the audience keeps turning up, they can keep charging brands for space/time on their platform or page or air.  But if the audience begins to think that its interests are not being served, if the content is less credible or less relevant or more cluttered or just not as good, the audience starts to wander off.  And when the audience wanders off, so do the advertising dollars, which are programmed to chase ‘viewers’ and ‘readers’ and ‘users’ all over Creation.  When the ad dollars wander off, the platform is forced to do less, and then even those in the audience who were okay with the brands and dollars and bias start to find their attention turning elsewhere, to something shinier.

Soon we’ll start to see advertisers behaving like Little League parents, confront the Coach T by saying, “I paid good money for my kid to be on this team, I want him off the bench, and on the pitcher’s mound.”  Advertisers don’t just transact media spend for audience eyeballs.  They choose media placement based on the audience that channel attracts, the content they publish, the ‘match’ between the advertiser’s brand, and the channel’s brand.  There are a lot of places to spend money if you’re an advertiser, so advertisers know they have all the power.  And they don’t like it when a platform they’re subsidizing is critical of them in print or on air.  So they’ll threaten to take their spend elsewhere. Twitter wasn’t a natural ad platform; the promise of millions of dollars of revenue turned it into one.  Twitter wants that cash bad enough, they apparently don’t even need to be threatened.

But for now, the Twitter membership are holding on to some measure of power.  The firestorm around the #nbcfail/#twitterfail conversation got the journalist reinstated, the Twitter policy ‘clarified‘ and left NBC looking nervous, saying “Not it!”

The easy thing seems to be to turn your users, your audience, your readers, into the product.  There is a limitless, misguided optimism around the notion that advertisers will always want your aggregated audience, your page views, your user demographics and data.  But the history of Old Media tells us a different story, and the backlash to the NBC Olympics coverage and to Twitter’s handling of a journalist critical of NBC’s Olympics coverage allude to what happens when the audience isn’t happy.  First they get mad, and then they leave.

If either brand, NBC or Twitter, wanted to ensure their continuing relevance and revenue, and free themselves from the shackles of these cumbersome business models, they’d flip the value chain and ask themselves what would benefit users, viewers, readers, us – they’d ask themselves what we would be willing to pay for.

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