The Times They Are A Changin'

Barry Diller, storied former CEO of Paramount, founder of the FOX and USA networks, QVC, and on and on, has sounded yet another death knell for commercially sponsored entertainment at this year’s CES (Consumer Electronics Show) during a keynote appearance. This means a lot to a product placement agency like HERO, because it heralds another level of importance to what we do with product placement in internet (OTT) TV shows.

Diller’s prediction sends an alert to traditional media and entertainment companies. He believes that the next five to 10 years will bring “profound dislocation” that will upend both television and movies. Much of this predicted change, he believes, is due to the internet, which has eliminated bottlenecks between content producers and audiences. “The media world has been closed since radio….Scarcity was always the thing that kept people controlling media in very few hands” and the internet “changes all of that,” he says. “And we’re just at the beginning of that.”

But while that’s dislocating, it’s also “freeing,” Diller says. “This is thought to be the best year for content, and most of that content is not on linear television and broadcast networks,” he says. “With so much quality programming appearing on subscription-based outlets including Netflix “a lot of people, most people I think, are going to opt for commercial free television.” That will leave ad-supported TV to cash-strapped audiences. “You’re going to be advertising to people who can’t afford your goods” which will make free TV “endangered.”

This suggests that the predominant vehicle for entertainment will be subscription-based programming like HBO, Netflix, etc. Even YouTube is expected to move to a subscription-based format, thus eliminating commercials. These, along with Amazon Prime and Hulu, will also be the primary outlets for reruns of popular broadcast and basic cable shows.

As we watched our integrated exposure of the Hobie Cat brand on the CBS (another mover in the commercial-free on demand space, BTW) show The Great Indoors last month we took a moment to consider the exposure’s future. While this initial broadcast was commercially sponsored, those commercials will be long forgotten when the show migrates to the on demand space. The Hobie exposure, however, will survive the removal of paid ads and continue to deliver impressions.