There were reports this past week that NBC profits were up 17% partly due to Co-Chairman Ben Silverman.  He sold content based advertising (product placement) and developed some good new content.  The caveat is that viewership is still down.

I as well as others in the industry see this race to the bottom for viewership amongst the network broadcasters.  Because of this decline, there needs to be a value added to the content for advertisers and sponsors.  I read Beyond the Box by Sharon Ross last week.  She talks about tele-participation from fans.   Since 2004 and the show Lost the idea for the value added is extra content, vignettes, and other participatory elements on the internet.   I think this is great for some people, the comic book convention people, the big fans.

There are the others though, which this has not worked for, truists.  Truists are those who want the whole story to exist within the content itself, a start and an end.  I cannot say if the majority of the people are part of this category, that would require some more research, but I would assume so.  There is a point that the story told by television ends and the imagination begins.  Advertisers understand this imagination.  They are hoping by placing their wares with the content when you think about the story, you think about them.  They also hope to start embedding their product in your conscious.  Repetition works.  It is a fabulous thing.  To go back to the original point, how does that add value?

The large questions is how will consciousness of these in content advertisements be tracked?  There are two points of view here, the advertsers and the regulators.  In the advertisers’ corner, there are also the broadcasters and producers.  On the regulator’s side there are the viewers and advocates.  These sides can help each other.  Oddly enough on TV like on the internet people want to support the websites or programs (shows) that they enjoy.  Those who use Adblock for the Firefox browser will enable ads on the sites they like.  On TV, the shows that are DVRed (Digital Video Recorded), one will watch the show’s commercials, instead of skipping past them.  If the list of advertisers for a program was published likely online, it would be easier for the advertisers to get in touch with the customers and potential customers because customers will find them. Yes there is a risk for sneaky advertising, but those days are pretty much over.  Honesty is still the best policy, and if everyone is forthright, everyone will win.

Mr. Silverman, give your customers permission to connect with your clients.  Let everyone win, and the profits will rise along with your CPM.

Today in the New York Times, Brian Selter writes that NBC is planning a variety show staring Rosie O’Donnell, cleverly called Rosie’s Variety Show.  Fox is planning their own variety show with the Ozzy Osbourne family.  Surely this is a sign of the times when the networks resort to their successes from the days when the television industry was emerging from the decade of the picture box.

Television is being sponsored, variety shows are back, and soup is flying off the shelves of supermarkets with their stock prices going up,  while everyone one else goes down with the ship.  There is hope for the future, but the networks are looking to cut costs early the hedge their economic bets without another Survivor reality clone.  Its about time.  The cable networks like Bravo and Oxygen and … have taken the reality tv crown away from the networks for some time now.

I hope this bet pays off, but I hope even more that the economy can recover faster than you can say, “canceled.”

Jeff Zucker, CEO of NBC Universal told Reuters that his networks are loosing local advertising due to the economy.  He says it is not on a national level yet.  This is a good thing, but it may only be the beginning.

NBCU, this past year made some moves to protect its interests and start investing for the future.  They launched Gemini Division an online program a little while back.  It seems more like an experiment than an actual plan of action.   The episodes are short, about 5 minutes, but then four of them are stitched together that makes it seem like a weekly TV episode, except for the production credits at the end of each short.   There is a lot of product placement, which is present throughout the story.  I think it is a fairly clever and successful way to make up the production budget, but there is a problem with this strategy.

The issue comes back to the advertising dollars.   As those monies dry up, NBCU will need some system to appease the affiliate stations around the country.   The internet only investments will be for nothing if NBCU plans many more internet only programs to hedge the economy downturn.   As the affiliates tire from their arrangement with the parent company, what will be their course of action?  WIll they have any at all?