Calling the Fab-5: TV's business model needs a makeover

Calling the Fab-5: TV’s business model needs a makeover.
Rance Crain, editor in chief of Advertising Age, did the television industry a disservice this week with a misleading and fact-defying commentary entitled, “WHAT COMCAST’S DISNEY BID SAYS ABOUT COMMERCIAL TV, The Traditional Business Model Is Not So Dead.” In it, Crain, whose family owns Advertising Age, Television Week and a host of other publications, suggests that because Comcast is willing to borrow $50 billion to buy Disney and ABC Television that it must mean they know something we don’t, “namely that TV will continue to be the most dominant and safest ad buy in spite of rhetoric to the contrary.” Whoa! Wait a minute, Mr. Crain. Your magazines have been at the forefront of studying and reporting on all the trends. You KNOW better.

Otherwise, what’s the point of Comcast’s trying to fix ABC if network TV’s time has come and gone? And don’t kid yourself into thinking the cable company is willing to borrow all that money for Disney’s movie business (except as fodder for TV) and theme parks. It wants TV content, to go along with its distribution facilities, so Comcast management must think commercial TV is still the best game in town.
Comcast “must think…?” He goes on to say that marketers are struggling with return-on-investment in the new advertising paradigm. He uses P&G’s Jim Stengel’s wonderful quote, “Our industry is in desperate need of new tools for measurement,” to justify stuffing everybody’s status-quo heads (back) in the sand.

Ironically it’s this very desperation that will eventually keep most marketers in TV. They are just getting to the point where their top management accepts that awareness, attentiveness, incremental volume per 100 GRPs of spending and the like can be used to measure the effectiveness of TV advertising. Why should they risk losing their credibility by not being able to prove the effectiveness of concerts in the park or product placements?
Rance Crain is a bright guy from a family of bright people, but concerts in the park and product placements are hardly the be-all-and-end-all of the new paradigm. He’s dead wrong here. And worse than being wrong, he’s giving broadcasters hope where there is none. While it may not be dead, the traditional business model of TV is certainly dying, and pausing to breathe Mr. Crain’s bogus sigh of relief just isn’t very smart.

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