The Future of Media Means No More Free Lunch
Rich Greenfield is one of the most opinionated voices writing about media today. His opinion on the future of media is clear: both brands and media companies MUST figure out a way to build direct relationships with consumers. Those who don’t will “lose their free lunch.”
Thought leadership was abundant at Neustar’s Connect Forum, but “The Future of Media” session with Rich Greenfield, Managing Director of BTIG, hosted by Neustar’s CMO Steven Wolfe Pereira, was a particularly memorable one. For those familiar with Greenfield’s style, this comes as no surprise. Greenfield calls it “like it is,” even when it makes big brands uncomfortable. And Greenfield did just that, diving into his view about what the future of media – and video, in particular – looks like.
Greenfield started by offering his view of what he considers television’s continued, inevitable decline. He does believe people will continue paying for bundled television, but he warns that a market where consumers pay a lot for shows they don’t watch and bundled services they don’t need, is not economically sustainable. He believes TV stays afloat largely because of the one type of programming people still have an immediate desire to watch, and socialize around, in real time: sports.
On top of subscription fees, the TV networks make money off of ads consumers often watch passively, if it all. Brands, for their part, are dissatisfied with lackluster TV advertising measurability and proven results; and anyone with cable is paying for a lot content they don’t care about in order to watch the programs they do care about. Greenfield calls this wasteful period television’s “free lunch” age.
“There’s a lot of bad content that survives because of the bundle. When you actually start to have a choice, that mediocre content is going to fade away,” Greenfield said.
The way we watch video is changing. There’s no barrier to creating great content, so video competitors pop up all the time, chipping away at cable viewership. Greenfield predicts that many of the new content competitors will: “…be small, disruptive, and will eat into legacy media, but they won’t reach the size or scale we see now.”
Consumers want flexibility and accessibility. The likely scenario, according to Greenfield, is that people will continue paying for TV bundles in some form, even with a proliferation of video upstarts. What will change, he believes, is the size of the pie. The upside to diminishing scale is more targeted reach. Cable companies that embrace this change, and pivot as required, will reap the rewards of smaller, yet potentially more engaged, audiences.
Brands like Amazon are already making inroads to produce their own content, grab good content, and effectively drive that bundle in a digitally focused, more targeted way.
“Seeing this large company enter the space should really scare brand marketers,” Greenfield warned, continuing: “Amazon is using data directly from consumers,” while cable companies still struggle to use consumer data effectively.
With the room of brand marketers in attendance in mind, Steven Wolfe Pereira asked a poignant question: “So what does a brand do in a world with no television impressions?”
Greenfield urged brands and media companies to figure out how to get their hands on their consumer data, build direct consumer relationships, produce their own great content, and start to structure for long-term growth, not year-over-year targets. Greenfield cited Unilever’s decision to buy Dollar Shave Club as a great example of a brand recognizing the value of direct-to-consumer relationships.
“Ultimately, we need to find the intersection of direct to consumer, home screen worthiness, and consumer love,” Greenfield suggested. The way to do that is to build meaningful consumer relationships.
Rich Greenfield may have held a contrarian point of view than other brand leaders in attendance about what the future about video would look like. Still, despite the varied topics and opinions among the thought leaders gathered at the Neustar Connect Forum, the takeaways of many of the day’s sessions concluded the same.
Wolfe Pereira summed up the common thread nicely: “Customers are at the center of all of this.“ It’s time we bring the customer back into focus with direct to consumer relationships, allow brands to truly own their customer data, and work together as marketers to use those valuable insights wisely.