Old World, New World:
Changing the Media Model

The U.S. television "upfront," the concentrated time
period when advertisers book the upcoming year's
limited spot inventory, has long been an indicator of advertising buoyancy in the world's largest ad market. Interestingly, profound changes are occurring this year at a time when there are shifting attitudes toward traditional media, not just in the U.S. but worldwide.

Only 20% of network inventory has been sold, compared to 70%-80% in the past. Furthermore, prices for many programs will be lower than the deals of 2005, a counter trend. Most significantly, advertisers like Wal-Mart, Coca-Cola, and Microsoft want to exchange the upfront model for an auction-like system or simply not participate.

Combine that with these facts: Forester Research says that with the increase of TiVos and DVRs, 25% of all U.S. households will be taping shows and eliminating commercial viewing within the next 18 months. iTunes now sells hit TV shows for $1.99. TV networks are providing streaming content of top shows -- free -- on their Web sites. According to Jeff buzzmachine.com, in a recent interview on National Public Radio, the problem in America is that it's holding onto that Old World, whereas in Europe, media executives say, "we've got to get into the New World as quickly as we can." He noted that Al Rusbridger, editor of The Guardian, imagines a world without presses while Tom Glocer, head of Reuters, talks about a world where consumers are now his editors. Meanwhile, the head of Gruner & Jahr says the role of the journalist is that of moderator, according to Jarvis. Those are entirely new ways to look at the media market of the future, Jarvis says.

So who's the winner? One might point to an MTV, which is expanding its TV offerings with new digital platforms. Advertisers have long asked for
integrated buys; now we're seeing a major global media buying agency, OMD, committing to broadband, video-on-demand, podcasting, and wireless as part of the MTV total platform package.

Renetta McCann, CEO of Starcom MediaVest Group, recently said, "Today's generation is entirely media agnostic and promiscuous in their use and control over media. They, unlike, their parents were born into a world of screens and demand content at will on the screen of their choice."

Given the worldwide popularity of phones, iPods, and laptops, perhaps small is the new big.

Deborah Malone
Publisher

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