This 1938 trade press article argues that choosing the announcer to voice the commercial is similar to choosing the correct typeface for a print ad.

As podcasters draw larger audiences, they are experimenting with business models, especially with advertising.

Like many media historians, I’ve been struck by the parallels between 1920s-30s radio and 2010s podcasting. Despite obvious differences between podcasting and early radio—such as asynchronous reception, niche rather than mass audiences, global rather than local distribution—podcasters hoping to support themselves by advertising share many of the opportunities and difficulties faced by the producers of Jack Benny and Kraft Music Hall.

When radio emerged in the 1920s, its boosters promised it would be an effective advertising medium because, instead of inert printed text, it used the human voice, which “tug[s] at heartstrings,” according to Radio Showmanship, and “affects the heart, mind, and soul,” according to a 1929 CBS pamphlet. Podcaster Alix Spiegel (Invisibilia) has recently made a similar claim about the emotional information carried in voices.

Early radio advertising proponents noted that audiences experienced radio as individuals rather than as masses, in the intimacy and privacy of the home, making it feel like a more confidential and personalized medium than, say, films in theaters. Likewise, some podcasters today note the high “engagement” they enjoy with their audiences, many of whom, listening on headphones or earbuds, are far more attentive than audiences for whom radio or television is sonic wallpaper. Advertisers who fear television audiences have strayed to other screens may find podcast audiences more appealing. As one podcaster explains, “People really pay attention to the ads,” so advertisers may pay very high prices (CPMs) to reach them.

The cartoonist H. T. Webster poked fun at announcers perfecting their commercial delivery.

Early radio proponents, such as a NBC time salesman, noted radio’s “pseudo-friendship” effect, when audiences’ parasocial relationships with radio personalities spilled over into their perceptions of whichever products those personalities endorsed. Likewise, some podcasters today, such as Mark Maron and the hosts of Men in Blazers, are asked by advertisers to promote products by integrating endorsements or uses of products into their podcasts, allowing brands to leverage the audience’s good will toward the host. Such “testimonials,” an established strategy in print advertising before the radio era, also had a long history in radio and television, as hosts such as Mary Margaret McBride and Arthur Godfrey integrated product endorsements into their talk shows.

However, advertisers do run some risks when closely tying the commercial message to the host or announcer’s personality. In early radio, some suggested that announcers delivering advertising messages must sound “sincere” or risk losing audience trust. The commercial’s words, according to Norman Brokenshire, a well-known announcer, must be “felt as well as spoken.” Likewise, StartUp podcaster Alex Blumberg, who uses first-person narratives and interviews in both his program and advertising, has insisted that he selects his advertisers carefully so that any implied endorsement by him is sincere and authentic.

In the 1930s the ad agency J. Walter Thompson would sometimes, instead of professional announcers, have an amateur or “man on the street” speak the commercial message; this, the ad agents believed, could make the advertising sound “more sincere, frank, and open.” Likewise, podcaster Roman Mars (99% Invisible) often uses soundbites of his own child speaking about his advertisers, and the producers of Serial, most famously, use “man on the street” interviews for their commercial for MailChimp. The interviewee who notoriously mispronounced the name as “Mail Kimp” reinforced the authenticity of the ad.

In 1920s radio, producers worried at first that audiences would turn off the radio if the program were interrupted by ads. Today audiences can easily avoid interruptive ads, and so podcasters feel a special need to keep them listening. Blumberg’s ads in StartUp, for example, resemble the rest of the show; as he interviews his documentary sources about his topic, so he interviews his sponsors about their business, with no change in style or tone. The similarity is so close, in fact, that he employs a special music cue so that listeners won’t confuse the ad with the program.

This integration of format or style between program and commercial was routine in 1930s-40s radio. Comedian Fred Allen made jokes with announcers about sponsors, and Jack Benny famously integrated humorous references to Jell-O into his comedy. The intention was not to confuse audiences but to smooth out any disjunctures and keep audiences listening.

Alex Blumberg of Gimlet Media & the StartUp podcast (Image: The Wolf Den/Midroll Media)

Blumberg has already confronted one of the pitfalls of such integrations. For his company’s other program, Reply All, the producer used an interview with a young boy about his use of the web site provider Squarespace as an advertisement for that site. The boy, and his mother, thought the interview was for the program, not an ad, and the mother’s sense of offense was rapidly transmitted via social media. In a perfectly reflexive and reflective episode about this event, Blumberg interviewed the mother, who noted that her son, unlike a hired performer, was offered no compensation for his testimonial. So Blumberg’s production of authentic ads via documentary-style soundbites has to gain the trust not just of the audience but also of the documentary subjects.

In some ways, then, podcasting is where radio was in the late 1920s, promising to be a new medium but like old media simultaneously. Advertisers’ need to reach attentive audiences has increased as audiences have been unshackled from linear media’s schedules and forced exposure to advertising. As podcasters try to monetize programming, maintaining their audiences’ trust and attention will be crucial to their success, and that, in turn, will depend in part on how they handle their advertising.

The media industry mantra “Content is king” once reflected the legacy industry’s power to dictate terms of media consumption through oligopolistic distribution and pricing. But technological change has undermined content control, and so at last many in the media industry are acknowledging a new ruler: the audience. Fortunately, the audience has an insatiable demand for content. Hurrah: long live content the king!

I saw this shift in industry discourse first hand at the 2012 and 2014 Time Warner’s Thought Leadership Faculty Seminars. As I previously reported, presenters in the July 2012 seminar insisted that TW was committed to “bolstering the ecosystem,” that is, the old business models. I saw presentations on the evils of “piracy” and the importance of physical media (DVDs), and I heard confident predictions that time-shifting millennials will enjoy linear viewing and commercial interruptions once they get a bit older.

TW executives toed a different line in July 2014. Opening the seminar, the Warner Bros. Senior Advisor of Media Research explained that TW executives are kept awake at night worrying about how “to protect our assets” from the “volatility of the media ecosystem.” Rather than sustain the “status quo” (translation: fight a rear guard action against change), TW must adapt to the “disruptive forces that challenge our business models.” Within the past decade TW has shrunk from a behemoth conglomerate to only three companies: HBO, Turner, and Warner Bros. Reducing its dependence on advertising revenues by spinning off Time Magazines and AOL, TW is now a “pure content play,” which will, executives claim, continue to thrive however distribution platforms evolve. HBO, as one of these executives baldly announced, plans to “feed the addiction” for its content. HBO’s recent deal with Amazon may indicate it is studying Amazon’s strategies for building consumer dependency.

When asked about the threat of piracy, the HBO executive neatly “pivoted” to piracy’s value as a form of market research: “Our learnings are that hits drive pirating behavior; hits attract pirates; and if we can convert pirates to paying customers, maybe one in ten, that will add up to real dollars.”  Another TW executive described a new “consumer friendly” approach to handling unauthorized access to content. “We want to give consumers easier access,” she explained, because “that’s where innovation is going on.” So TW is “piloting in the sand, not in concrete, because the world is changing.” TW wants to be flexible enough to follow consumers wherever they go (although the metaphor of sand seems an unfortunate one).

Though they conceded that young viewers timeshift, TW executives still insisted on the primacy of scheduled linear viewing, pointing to the “water cooler” value of Game of Thrones episodes. The HBO executive noted that social media chatter spikes when an episode is first released, then trails off. To “manage this conversation” and “keep subscribers engaged over time,” HBO simply has “too much investment in shows to release all episodes at once,” Netflix-style. HBO’s subscription strategy depends on an artificial scarcity of episodes (“We want to retain subscribers”), possibly because HBO is still dependent on MSOs to deliver their customers. Recently, however, TW CEO Jeff Bewkes has openly noted that HBO is trying to become more like Netflix, not the other way around, indicating a possible shift away from the strategy of content withholding.

A CW executive explained the changing economics of television advertising. In 2012, TW executives insisted that online (“digital”) episodes should have the same ad load as linear TV. Advertisers, however, were reluctant to pay for online viewership without the demographic data Nielsen supplies for linear viewership. In 2014, knowing the majority of its young audience timeshifted on digital platforms, the CW partnered Nielsen and Doubleclick data to prove that at least half of their digital viewers were the targeted 18-34 year olds. By offering to charge advertisers only for the 18-34 year olds (in other words, providing a 50% discount), the CW was able to sell more ads, doubling the ad load per episode, and thus to come out even. The CW also offered advertisers more buying flexibility. Most networks force advertisers who want to buy time on a top-rated program to buy time also on a lower-rated one; the CW allowed advertisers to buy only on the programs they wanted. The CW executive noted, however, that viewing and click-through metrics for digital commercials seemed to have much more to do with the quality of the commercial “creative” (the ad idea and execution) than with the quality of the program interrupted by that commercial. All these changes favor the advertiser, not the audience: eschewing policies such as YouTube’s True View, in which audiences may skip a commercial, the CW, like most of the rest of the television industry, continues to search for the holy grail: a technology that makes everybody watch the commercials.

Warner Bros. Home Entertainment, once the revenue powerhouse driving DVD sales, is now focusing on how to take TW film and TV content and “monetize it downstream.” Noting that physical media is a dying market, a Home Entertainment executive explained the new strategy of “electronic sell through.” In 2012, WB promoted Ultraviolet, a difficult-to-use digital service; in 2014, WB is simplifying consumer sharing experiences (although the “legal team is nervous”) and experimenting with social media, online communities of fans (WB A-list), and “long tail” content (WB Archive Instant has “rabid fans”).

Although the Time Warner Thought Leadership Faculty Seminar is designed by its media research executives, and so reflects only one company’s views, I recommend that scholars interested in learning more about the changing media industries attend these free events. Unlike trade press articles or industry conferences, they allow us to ask questions directly of industry executives, who likewise may benefit from hearing our perspectives. The 2014 seminar ended with TW executives making a plea for collaborative research with academics: as one executive put it, professors can research “longer term future ideas” that TW can’t get to because they “have to deal with today.” Whether or not we choose to collaborate with TW, this two-day seminar can teach us a lot about how such a legacy media conglomerate is hoping to transform disruption into “opportunity.”

Rather than interrupt the program with commercials extolling AT&T’s mobile phone services, @summerbreak simply integrates mobile phone usage into its scenes. The teen performers talk, text, photograph, and take selfies. They use video, Instagram, Twitter, Tumblr, Snapchat, and so on. Not only do they model ideal device usage, they also comment on each other’s usage: “You’re such a social media diva!” exclaims one teen to another who is tweeting their shopping expedition.

In the past, advertisers assumed that media like radio had direct and powerful effects. They used radio to educate consumers either about products or about a corporation itself, assuming a powerful tool like radio should be used for the public good. In sponsoring programs of classical music, opera, and legitimate theater (instead of popular music, say), some radio advertisers hoped to instill gratitude in audiences and to polish an image of themselves as models of good taste, beneficent patrons, and technological innovators.

In the middle of the Rehearsal (at about 15:50) an announcer explains how AT&T has improved on long distance communication through a short history, beginning with bonfires on hilltops, proceeding to audion tubes and radio relays, and culminating in a couple’s earnest long distance phone call. Cultural uplift and technological progress dovetail so beautifully we may forget about the corporation’s monopoly profits.

Today, advertisers like AT&T have come to doubt the power of a direct pitch; they believe instead in associational messages and images. AT&T, no longer a paternalistic monopolist, is now only one of many companies competing in emerging media, and its success with youth markets will most likely shape its future. Brands like AT&T no longer use advertising as a business form of “education,” which might alienate their teenage audience. Instead, they seek to integrate their brand messages smoothly and subtly into youth culture.

Nonetheless, @summerbreak arguably retains the overall educational goal of The Bell Telephone Hour: by featuring attractive Southern Californian teens modeling mobile service usage, the program implicitly educates viewers on current cool teen behaviors, lingos, and social media trends. And it retains the goal of association with aspirational culture—not highbrow music but cool teen behavior. AT&T hopes its teen audience feels validated by the representations of cool teens doing cool things with their phones. By reminding teens that AT&T knows teens are cool, AT&T can hope teens will reciprocate the validation and believe AT&T is cool too.

I ask students to identify the aural and narrative strategies that may have convinced some listeners they were listening to news accounts of an actual invasion in progress. I suggest that people in the 1930s weren’t any more stupid, or naïve, or fearful than we are today. What exactly made the program effective? Through discussion, we identify many of the techniques: the interruption of a dance music performance in the “Park Plaza Hotel” by news bulletins from the “Intercontinental Radio News” service reporting strange events in the sky and the arrival of a meteorite; the cutaway interviews with astronomical experts, such as “Professor Pierson” from Princeton University who insists nothing unusual is happening; the references to official sounding organizations, such as the “Government Meteorological Bureau”; the direct address to the “radio audience” that “we are speaking to you from” a specific location; the announcements of actual broadcast times during the “news bulletins”; actual New Jersey place names such as Trenton and Grover’s Mill; the “on location” reporting by “Carl Phillips, commentator,” who provides “word pictures” for the radio audience; the interview of the “eyewitness,” a “farmer” who doesn’t speak properly into the microphone and repeats himself; and sound effects that include the hubbub of crowds and police sirens, the eerie “scraping noise,” and then the piercing sound and screams, cut off suddenly, leaving dead air. “Ladies and gentlemen,” the announcer breaks in, “due to circumstances beyond our control, we are unable to continue the broadcast from Grover’s Mill. Evidently there is some difficulty with our field transmission.” I usually stop there and ask the students what happened to Carl Phillips. They always know.

When I use WOTW in my Introduction to Media Studies course, I hope to help students engage with a cultural artifact from the past, sharpen their observational and listening skills, experience aural narrative, and critique the conventions that they usually employ to distinguish fact from fiction. Close listening, I believe, allows students to be specific in their analysis.

While I use it to make fairly simple points in the classroom, WOTW can serve a variety of pedagogical aims. It can be used either to illustrate or to challenge theories of the direct effects of mass communication. It can be seen as a symptom of the rise of mass culture, one that subsumes individual rationality, or it can be analyzed as a unique cultural text reflecting a moment of artistic and technological innovation. The few listeners who panicked may demonstrate the manipulability of audiences or support the elite view of “mass” audiences as irrational. The program can be seen as reflecting contemporaneous political currents, such as fears of a Nazi invasion and looming world war, or as an allegory applicable to other historical moments, including the present. It can be analyzed as a key star text for Orson Welles, in the context of his transmedia career, or as an example of collaborative culture-making within the constraints of commercialism.

The WOTW broadcast can be used to explore the problems of text versus context, the complexity of reception, the construction of audiences, the varieties of narrative forms, and the hierarchies of culture. It is also a science fiction narrative, based on a nineteenth-century text, but unfolding in the present tense and constructed from contemporaneous social, scientific, and journalistic discourses.

Finally, but perhaps most important to those of us who hope for greater attention to audio media, WOTW can be one of the best artifacts for introducing students to the aesthetics of sound media and aural narrative. Its sophistication usually impresses students who claim to be bored by anything old or nonvisual.

All of these approaches–and others–are possible. WOTW is a spectacularly rich historical media artifact that can serve a variety of needs for media educators. But don’t take my word for it; take a few minutes and LISTEN! (If you’re busy, the first 20 minutes will do the trick!)

(Note: Many thanks to the members of the “Teaching Media” Facebook group who contributed their thoughts about teaching WOTW.)

This is Antenna’s second post, and fourth overall, in our ongoing joint venture with Sounding Out!, From Mercury to Mars: Orson Welles on Radio after 75 Years. This continuing series examines Orson Welles and his career in radio, prompted by the upcoming 75th anniversary of Welles’s 1938 “Invasion from Mars” episode and the Mercury Theater series that produced it. Stay tuned for Sounding Out!’s next installment on September 30th.

Miss the first three posts in the series? Click here to read Tom McEnaney’s thoughts on the place of Latin America in Welles’s radio work. Click here to read Eleanor Patterson’s reflections on recorded re-releases of the “War of the Worlds” broadcast. And click here to read Debra Rae Cohen’s thoughts on media-consciousness in Orson Welles’s “Dracula.” 

Setting aside the question of the viability of the broadcasters’ legal case, as well as the question of how useful Aereo might be for audiences, I’d like to consider the larger historical context of the broadcasters’ objections to Aereo. How might this case reflect how broadcasters are revising their commitment to “free” over-the-air (OTA) broadcasting? And how might this case reveal something about the shifting business models of OTA broadcasting, historically reliant solely on advertising revenues?

As other scholars have noted, proponents of advertising-supported U.S. broadcasting have since its origins in the 1920s-30s identified commercialism with freedom, both economic and political. Broadcasters get free spectrum, and the public gets programming free of cost to themselves and free from government control. They pay only with their attention to advertisers’ messages, attention organized and sold by broadcasters to advertisers. To address the criticism that a public resource, the spectrum, is being used for private gain, lawmakers require stations to serve the “public interest, convenience, and necessity”–a slight limitation on broadcasters’ First Amendment rights.

For nearly a century, competition to OTA has been regularly characterized not as a threat to broadcasters’ oligopoly but to “free” broadcasting and American liberty. For example, William Benton’s effort to create a subscription wired audio programming service (an early version of Muzak) was attacked for undermining “free” broadcasting, for attempting to impose a “tax” on listeners. Until 1977 or so, broadcasters prevented competition from cable television services by prevailing on the FCC to ban the importation of distant signals–an effort that, although it was actually designed to secure broadcasters’ oligopolistic control, was dressed up as the preservation of “free” programming from the threat of “pay TV.”

Today only about 10 percent of US households receive free OTA broadcasts. Most subscribe to multichannel video program distributors (cable operators, telcos, DBS, collectively known as MVPDs) and pay for the privilege of choosing among hundreds of program providers (most of which also carry advertising). After many court battles, some over copyright, others over the First Amendment, and many regulatory changes, the television industry has integrated broadcasting and cable networking in such a way as to allow the traditional OTA networks (ABC, CBS, NBC, Fox, CW) to receive a share of MVPD subscription revenues, known as retransmission consent (operators must compensate broadcasters for the retransmission of broadcast signals). These fees, as many have pointed out, are at stake if a disruptor like Aereo does not pay them to OTA networks.

When NewsCorp COO Chase Carey claims that, “Aereo is stealing our signal,” he ignores the fact the signal is still free to individual households (Aereo’s “theft” is based on a theory of “public performance”; Aereo claims its retransmission is a private performance). The exemption from fees, which in past eras was used to justify the ad-supported business model, is fading from memory: the industry now expects that audiences must pay. Since 85-87% of households do pay for television, the industry wants to believe this will remain the norm. However, over the top (OTT) services, such as Netflix, are providing options for cord cutters, “cord nevers,” and zero-TV households to opt out of the pay-TV bundles. (As broadband providers, the MVPDs are less endangered by this shift than the TV networks are.)

Carey’s threat to cut off Fox’s OTA signal and make the network available only through a MVPD subscription also indicates that many in the industry may be ready to discard the network/affiliate model of distribution. The technological need to use affiliates to retransmit network feeds has long since ended. Leaving the “free” broadcast spectrum would allow Fox to program without the onus of serving the public interest. Most view this threat as saber rattling, but it may be logical from both technological and economic perspectives: why continue to share retransmission fees with affiliates when Fox doesn’t need local stations or spectrum for national distribution?

Rather than embrace Aereo as a way to expand viewership (especially among cord cutters and cord nevers) and thus raise advertising airtime prices, broadcasters seem to be caught up in the fantasy that they are owed money for their transmissions–despite their continuing use of free public spectrum. Instead of relying on ad revenues fully to subsidize their programming, as they have for decades, broadcast networks today are expecting retransmission fees to become a greater percentage of their revenues (from about $2B/year to perhaps $6/B). Instead of embracing the possibilities of emerging business models, some of which rely on giving content away for free and so resemble the legacy broadcast business model, these broadcast networks are apparently throwing in their lot with the closed MVPD oligopolies, counting on retransmission fees to carry them, despite signs of consumer demand for alternate business models.

So, is the broadcasting business model dead if it is no longer “free” to most audiences and can no longer justify itself as promoting freedom and democracy as a uniquely “American system”? Should broadcasters be reminded that “free” programming is exactly what they are supposed to provide in exchange for their free (unpaid) use of the spectrum? Or is it time to take back the spectrum from commercial broadcasters and, perhaps, allow the development of a different use of the spectrum?

Netflix’s simultaneous release of all the episodes of House of Cards has generated commentary on binge viewing, social TV, the definition of “hit” TV (and here), and business models (and here).  Netflix is disregarding conventional audience management strategies, particularly the sequential release of one episode per week. For the past 80 years of commercial broadcasting, the weekly release of episodes served at least two purposes: to fill airtime economically by spreading narratives out over time, and, most important, to secure audience attention for advertisers on a regular basis.

Netflix has the freedom to release all episodes at once because Netflix is not in the business of organizing audience attention for advertising messages. That means Netflix does not have to regularize that attention through scheduling or measure that attention through ratings.  Linear commercial television manages “audience flow” with scheduling strategies designed to deliver certain targeted audiences to certain advertisers, as measured by ratings services. Viewers may believe television networks serve them; however, television networks’ primary customers are advertisers, and programs are a means of delivering audiences to those advertisers. Netflix’s customers, on the other hand, are not advertisers, but viewers. What advertisers prefer, a regular schedule that guarantees the weekly exposure of their products, need not shape the preferences of such viewers.

Why doesn’t Netflix schedule like HBO, then? HBO, a commercial-free premium subscription service, creates artificial scarcity by withholding already produced episodes, doling them out week by week. HBO began as a linear service designed to attract subscribers to cable services; its strategies are thus designed to build subscriber loyalty to itself and to cable operators; its announcements of audience ratings serve only to market its brand, not to measure audiences delivered to advertisers. Many observers assume that Netflix is evolving like HBO, shifting from a program buyer to program producer to ensure subscriber loyalty. However, Netflix offers something HBO cannot: asynchronous viewing of a deep catalog of programming. Although HBO offers HBO Go, that service is limited to cable subscribers and to HBO programming. Since asynchronous viewing is what Netflix can offer more cheaply and efficiently than HBO, Netflix needs to distinguish itself from HBO precisely on that basis to attract and retain subscribers. Hence, rather than weekly releases, episode by episode, Netflix has always offered audiences total control over their viewing schedule.

Some find it difficult to grasp how the seriality of House of Cards can work if all episodes are available at once. Seriality as a narrative strategy has been around at least since the Odyssey followed the Iliad, but in the modern era it has also functioned to ensure the maintenance of a revenue stream. Serialized novels enticed readers to buy the next issue of a magazine; serialized films tempted viewers to buy another ticket the next week; and serialized comic strips encouraged readers to buy a newspaper daily. By the early 1930s serialized radio dramas helped ensure that audiences would tune in daily to their “soap opera” and the soap advertisers’ messages.  More recently, serials such as The Sopranos helped build HBO subscribers’ loyalty.

Why, then, create House of Cards as a serial at all, if Netflix does not need to tempt audiences into repeated scheduled viewings? Probably because open-ended episode structure is still one of the best ways to encourage viewing of more than one episode. Increased viewership overall would help amortize the show’s high production cost–not because Netflix earns revenue on how many viewers see each episode but because viewer engagement will likely lead to more subscriptions to the service.

Netflix’s willingness to give the audience control over serial viewing challenges assumptions that the best way to control program costs is to eke out episodes over time, measuring demand, and then raising and lowering prices in response. Netflix will track viewership, not to adjust airtime prices for advertisers but to measure subscriber demand and, it hopes, an increase of subscribers. Like HBO’s move into original programming, Netflix’s strategy is risky, but it is designed to attract subscribers to its streaming service–not necessarily to a particular program. No doubt audience control of the pace of narrative consumption will affect social media conversations. But this strategy also challenges the necessity of synchronous viewing as a business model, a model based on the limitations of legacy technologies rather than on some inherent quality of seriality.

Netflix’s current business model also depends on the survival of advertising-supported networks, which are selling programming to Netflix as a new aftermarket. Thus, Netflix is not aiming to destroy linear ad-supported programming. Advertising revenue subsidizes far more programming than Netflix can currently plan to produce on its own. Instead, by offering a new profitable aftermarket for programming initially financed through advertising revenue, Netflix may become commercial television’s white knight. Netflix’s ability to expand offerings of commercial television programming will depend in part on its ability to keep attracting new subscribers. Offering viewers the option to binge, or watch multiple episodes in a sitting, or watch them over a longer time frame, may be Netflix’s best bet for attracting new subscribers.

The full significance of House of Cards, as an indicator of new business models and evolving cultural forms, is yet to be determined. Is it too much to hope that Netflix’s simultaneous release of a season’s worth of premiere episodes is a harbinger of unprecedented audience leverage in an industry too long accustomed to bottleneck control over audiences?

Occasionally media companies also organize these programs. Last week I attended Time Warner’s “College Professors Thought Leadership Seminar,” focused on media research, at their new Media Lab in New York City. Presenters included vice presidents of media research from Turner, HBO, Warner Bros. Entertainment, and Time.

Halfway through the program, our MC announced that much of the research material is “proprietary” and should not be “shared” publicly. His comment shows the tension within the media industry between promotion on the one hand, and control on the other. For TW, educational aims don’t square perfectly with competitive aims. Of course I feel no such conflict.

The presenters emphasized TW’s commitment to “innovation” and “unparalleled passion for storytelling.” But they confessed also to an interest in “bolstering the ecosystem,” which eventually emerged as their main objective. In fact TW’s chief innovative strategy is TV Everywhere, the plan to restrict online program access to subscribers to cable and satellite video services. And what recommends it to company executives is precisely its supposed ability to “extend an existing successful business model” and discourage “cord cutting” (i.e., canceling multichannel video subscriptions). The industry’s dogged, perhaps panicked, insistence that its business model will survive social and technological change was one of the most instructive features of the seminar.

The Turner VP presented studies from 2008 and 2010 “proving” that audiences will sit through as many ads in online video as in linear television (non-timeshifted viewing). In these studies, more ad interruptions did not lower the viewing rate. When I suggested these studies predated the rise of Netflix, an ad-free streaming option, this executive remained serene. Audiences won’t change, he insisted, and everybody in the industry is “happy” with the interrupting ad model. I am skeptical, however, that the audience will share the industry’s contentment.

The HBO representative bemoaned his company’s lack of access to customer information, which is held by multichannel video providers (cable operators, DBS, telcos). HBO depends on those providers for marketing HBO subscriptions and so is reluctant to break from that “ecosystem,” despite evidence that there may be a market for freestanding OTT (over-the-top or streaming) HBO GO subscriptions. That HBO is reluctant to break from its providers, despite being well positioned to compete with Netflix in the OTT “space,” indicates the depth of resistance in the cable industry to such a possibility.

Famed media researcher Betsy Frank presented a biometric study in which participants wore belts measuring heart rate and respiration, and glasses with tiny POV cameras. While the study demonstrated the fragmented attention spans of “digital natives,” it left open the question of whether sustained attentiveness is a consequence of the technology used or the maturity of the users. Every media shift has produced hand-wringing over youthful attention spans; is multi-platforming a new behavior or just a newly measurable behavior?

Warner Bros., one of the largest television program production companies, also syndicates programs to local broadcast stations and cable networks. Such programs include off-network shows, such as reruns of Friends and Big Bang Theory, and first-run shows, such as Ellen and TMZ. This presenter explained that “syndication” is an old media term: they have renamed themselves “WB Branded Networks” because they offer, along with the usual episodes and 30-second spots, the opportunity to integrate advertising into these programs using three strategies. When, say, clips of Big Bang characters eating hamburgers are wrapped around a commercial for Burger King, we have “contextualization.” When a week of episodes is “themed” around an advertiser, we have a “brand takeover.” When the ad is integrated directly into the program, we have “branded entertainment.” Ellen DeGeneres, for example, promoted Ore-Ida sweet potato fries during her talk show not only with an ironic, Arthur Godfrey-inspired pitch, but also with a tongue-in-cheek dance routine using dancers costumed as giant sweet potato fries:

Integrations are as old as broadcasting itself. The inspiration for the Ellen integration is probably this 1952 example for Old Gold cigarettes:

But the Ellen integration relies on irony to disarm audience resistance to the shill.

Much more can be said about TW’s seminar, but I hope I have inspired some readers to take advantage of these industry programs. While TW may expect educators to follow its “thought leadership,” in fact industry programs give us the opportunity to develop our own informed critiques of media industry strategies.

The broadcast networks are outraged. NBC executive Ted Harbert insisted that “this is an attack on our eco-system.” CBS chief Leslie Moonves felt betrayed. One industry analyst has claimed that Dish hates advertising. Another notes that “it’s clear that in the fight for TV revenue the gloves have finally come off.”

The broadcast networks filed suit against Dish in California, claiming Auto Hop violates copyright law. Dish filed pre-emptively in New York, where a federal court restraining order bars further action on the lawsuit for a month. Unlike ReplayTV, whose ad-skipping technology was likewise challenged in court but never struck down as illegal or affirmed as legal because its owners declared bankruptcy, Dish is willing and able to litigate.

On what grounds are the broadcast networks suing Dish? The Betamax case established that timeshifting itself is not copyright infringement. Fox is claiming that Dish, not the viewer, is making the recording, thus, PTA is not covered by the Betamax decision; however, since the viewer must choose to record, it’s hard to see how this will hold up. CBS is claiming that recording programs with the intent to skip the commercials is a form of copyright infringement. Mike Masnick points out the absurdity: “CBS seems to be saying that merely wanting to avoid commercials is, itself, direct copyright infringement. And, given that Auto Hop doesn’t work until the day after the shows air, does that mean that it’s legal to record the shows if you intend to watch them the same day… but the second your intention is to watch them later, it’s copyright infringement?”

Media scholars are aware that disruptive technologies bring out litigiousness in legacy industries; intellectual property litigation is a time-honored method for stamping out competition. However, the television industry’s vociferous reaction to Auto Hop is puzzling. Haven’t viewers been able to avoid commercials since the advent of the VCR? Haven’t viewers muted audio, channel surfed, left the room, or taken up other activities to avoid engaging with commercials since radio?

The claims of copyright infringement could be the networks’ way to delay and distract their antagonists. Instead of focusing on copyright issues, I suggest that we should track how this case may reflect 1) the redefinition of the market for television services and 2) the viability of the broadcast business model based primarily on advertising revenue.

The television market is changing. Despite assurances from MVPDs that subscribers are not “cord cutting” and from broadcasters that their airtime is worth increasingly more to advertisers, both are worried about over-the-top (OTT) program providers, such as Netflix, that provide viewers with a variety of choices at a lower price than MVPDs and without commercial interruptions. Auto Hop may be Dish’s effort to stanch subscriber defections to OTT services. Networks and MVPDs have long benefited from their tacit agreement to keep raising affiliate fees (the price MVPDs pay to networks for carriage) and subscription prices (the price viewers pay to subscribe to an MVPD). Dish, then, in attempting to appeal to their “end user,” the viewer, instead of the networks, may be redefining its view of the television market.  According to one analyst, “The fact that Dish would be willing to anger some of its most important content partners just goes to show how desperate these times we live in really are.”

The broadcast networks are positioning their fight against Auto Hop as their effort “to aggressively defend the future of free, over-the-air television.” This is disingenuous on two counts. First, only a minority of viewers (10-15%) actually enjoy free, over-the-air viewing today in exchange for viewing commercials; the rest pay high subscription fees to MVPDs and endure commercial interruptions. Second, broadcasters have invoked the defense of “free” over-the-air commercial broadcasting to protest subscription radio in the 1940s, the importation of distant signals by early cable operators (CATV) in the 1960s, and the dissemination of local broadcast signals by direct broadcast satellite in the 1990s. Despite predictions that each of these would destroy “free” commercial programming by undermining advertising revenues, broadcasters made their peace with these technologies and continued to profit from their ad-revenue model.

Nonetheless, today the broadcasting business model is under stress. Despite lower ratings, broadcast networks have been reaping higher CPMs (the price advertisers pay per thousand viewers) in part because their program services provide “tonnage” for advertisers. But the networks’ ability to harness viewer attention and, more important, to prove to advertisers that they are delivering that attention to ads, is eroded daily by evidence of changing audience behaviors. Auto Hop makes explicit what networks prefer to keep implicit: that audiences paying for programming would often prefer to watch it without commercials. Although networks are providing advertisers with brand integrations, product placements, and sponsorships (the so-old-they-are-new-again strategies), none of these can replicate the profitability, mobility, and flexibility of the separate 15-30 second commercial.

Whatever the outcome of the Auto Hop litigation, shifts in the television market and changing audience behaviors will eventually force change to the broadcast business model. To track where that change is going, we should keep a close eye on what the advertisers are doing.

In advertising, the “creative” department makes the ads. Distinct from agency account executives (who service the client) or agency media buyers (who buy media time and space), the “creatives” are responsible for generating the advertising concept and executing it textually and visually. Through the first half of the twentieth century, copywriting departments produced text (“copy”), often guided by account executives, and art departments illustrated it. Historically, what is now called the creative was regarded as a service supplemental to media buying.

Before the 1960s, hard sell advertising predominated. Hard sell’s repetitive, annoying, grating “reasons why” to buy was the favored strategy when advertisers believed consumers were “stupid” and the market an undifferentiated mass. By the 1960s, however, advertisers realized that consumers could be sophisticated and that markets are varied and segmented. Advertisers turned to the strategies of subtle, humorous, high concept, and emotionally appealing soft sell advertising. Doyle Dane Bernbach’s 1960s Volkswagen ads, a humorous critique of 1950s hard sell automobile advertising, became the iconographic campaign of the “Creative Revolution.” Copywriters such as Bill Bernbach championed the idea that advertising is an art, not a science.

The post-1960s emphasis on creativity solves a problem for the ad industry. Despite the scientistic behaviorism dominating market research, advertisers cannot predict which advertising appeals will resonate with consumers. So if advertising is not a science but an art, creative advertising may succeed where data-driven advertising may not. Hence, since the 1960s the creatives have rhetorically positioned themselves not as instrumentalists pursuing selling goals but as artists expressing authentic meaning because only though artistry will advertising succeed in touching and moving consumers.

As depicted in The Pitch, the advertising industry is a hotbed of artistic romanticism. In each episode, two agencies meet a client, who explains a marketing problem. The agencies retreat to their offices to develop an advertising concept and a pitch to win the account. Scenes of brainstorming follow, intercut with talking heads explaining themselves directly to the camera. Finally, each agency presents its pitch and one wins the account.

Dramatic tension centers on which agency can prove they are the most creative. Their creativity, however, must be rooted in authenticity, as one agency leader explains in episode 102: “It doesn’t need to be clever, it needs to be honest.” In fact, being glib could undermine them: “We don’t want to outsmart ourselves with clever lines.”

Creative success in advertising should reflect a commitment to meaning; referring to a creative director, another explains, “He’s not in it for the power or the ego, he’s in it for the work.” Referring to careers in advertising, one man explains, “If you’re not committed, if you’re not passionate, you’re not going to be here a long time.” Passion, the byword of the creative industries, is something that cannot be learned. As one agency director explains, “You can’t teach passion, you have to hire passion.”

For one creative director, “The creative process is baring your soul.” Describing pitching to potential clients, another explains, “When you get up in front of them to present your ideas, it’s like being naked and hoping they don’t laugh at you.” Hence, whatever instrumental goal they may be working towards, such as improving the public image of a trash company or selling Subway breakfast sandwiches, these advertising makers insist on their artistic integrity, claiming “the work” is an authentic revelation of self.

The cult of romanticism, and its rhetorical strategies of passion and soulfulness, will continue to thrive in advertising because advertisers are not able to predict which ideas resonate with consumers, despite market research data. The Pitch documents the legacy of the Creative Revolution by showing proponents of creativity in advertising insisting on the value of artfulness over scientism.  Whether or not we believe that the advertising creatives featured in The Pitch believe in the authenticity of their creative work, they are certainly selling it. Hard.