(The Big Disrupt) ESPN: Verizon Just Heated up the Coming Battle Between Cable Providers and Networks

While it is no surprise that ESPN are suing Verizon, it is a surprise to see Verizon actually take action in the battle between cable providers and TV networks over the future of television.

In truth, the real surprise is why Verizon is the first cable provider to take such an action after powerful and popular networks like HBO and ESPN have launched standalone services (ESPN became part of a smaller sling TV package) separate from the cable bundle while benefiting from the ever increasing re-transmission rates cable providers have to dole out to keep them there. What ESPN is really mad at is that cable providers like Verizon are now doing what they should have been doing years ago: making their bundles smaller.

Cable providers are not stupid and know that consumers have gotten sick with the travesty of paying ever increasing cable bills for channels they don't watch which makes Verizon's FIOS service a masterstroke as it shows consumers that cable providers are paying attention to the consumer while calling the bluff of networks like ESPN launching standalone services while still in the cable bundle.

While Verizon's new service won't exactly check the growing demand for an a la carte model of television, It sends a clear message that cable providers can no longer play defense. It also shows cable networks that other cable providers may be preparing to make the same move as cable providers are surely not in love with networks dangling their feet in the a la carte pool while nestled in the safe harbor of the cable package.

Cable providers (as well as cable networks) are well aware that if the a la carte model was as lucrative as staying in the cable bundle was cable and broadcast networks would leave the cable package en masse and put cable providers like Comcast and Verizon out of business. Comcast may well be the next cable provider take a hint from Verizon and start making their cable package a little smaller after they gave up on a merger with Time Warner and have been subject to astronomical re-transmission rates over the last decade.

However, this process might have the effect of making already powerful and popular networks even more powerful as smaller bundles give popular networks like HBO and ESPN in a better bargaining position than they already have. We're already seeing this trend already with cable operators like Comcast and Verizon but it's more pronounced with services like Dish Networks's Sling TV where ESPN can choose to leave Sling TV's smaller bundle if the service gets too popular and takes away from their cable bundle base. In effect, this shows that cable networks and ESPN in particular are trying to have their cake and eat it at both the cable providers's and Sling TV's expense.

This type of scenario won't last forever as congress and the FCC are both behind making the a la carte model of television the new normal in the pay TV market. If it should happen, Cable providers and a host of networks are going to have to adapt or die a slow and horrible death as the balance of power in the pay TV market has swung from the traditional distributors to content creators and it's hard to see distributors getting it back .

However, this would be the cable networks worse nightmare the last thing they want to see is cable providers die out as the big cable providers is how they get their bread buttered. Without cable providers, cable networks would have to either build their own standalone over the top service and fight for an audience in the open market or partner up with a smaller streaming services who can't (or won't) cough up the large re-transmission deals a great deal of networks rely on.

So what we will see is networks doing their best to straddle the lines between the cable package and the a la carte model but with Verizon making their packages smaller and their rivals sure to follow suit, cable networks are going to find this balancing act harder to pull off.

In any case, 2015 is going to be a truly interesting year in the pay TV market with a host of networks either launching standalone services or joining smaller bundles via online streaming services as we get to the first draft of the future of television be written right in front of our eyes.

  

(The Big Disrupt) Comcast: Did The DoJ Just Do Comcast A Favour?

Comcast has been working overtime to secure their $45 billion merger with Time Warner Cable but with the recent news of the DoJ preparing to block the merger, it look like Comcast might be unsuccessful in its bid.

While Comcast might feel like the DoJ sent a fax to Cleveland in their cornflakes, there's a strong argument that the DoJ just did Comcast a solid. Mergers are not exactly a bad thing and could, if done right, benefit both parties but as recent history has shown, mergers are particularly difficult to pull off. There are a number of reasons why mergers are difficult but the most difficult obstacle in the way of success is merging the organizational culture of the parties involved which, more often than not, are likely to clash. 

Companies have enough trouble trying to get the culture right in their own organization so just imagine the tumult caused by trying to create a new culture when both parties were more than happy with the ones they had. Why Comcast would be prepared to take on all these hard issues to merger with Time Warner might seem strange given the history of high profile mergers failing but in Comcast case, it's actually a decent strategy. If the merger happens, Comcast would bolster their dominant position in both cable and broadband. 

It would also allow Comcast turn the screws on Netflix (which has both Comcast and its nearest competitors beat combined in subscribers) even more than it has already and check the trend led by HBO (who just happen to be owned by Time Warner) and other popular cable networks of raising transmission fees while launching their own standalone services to reach out to millennial who largely get their entertainment fix online.

These rising transmission fees is why Comcast is known for its exorbitant monthly cable fees and why there's a whole generation is cutting their cable or avoiding cable altogether. Simply put, Comcast can see the blood on the leaves and a merger with Time Warner is a move in the right direction to make sure it's not theirs. But, in the end, the blood on leaves will be theirs as regulators, cable networks and most importantly consumers see the merger attempt for what it is.

What angers most about the Comcast and Time Warner is not the merger itself but that Comcast has other options, the first being that the Philadelphia company could go on the offensive and tackle issues with its service and the new trends in their marketplace head on but instead, Comcast has resorted to playing defense, badly. The executives at Comcast are smart enough to know that a whole generation is more likely to flick on their laptop or smartphone than their TV sets when they want to watch their favorite shows but fail to meet the new demand for unbundled "al a carte" television or even address its notoriously bad customer service adequately.    

Comcast isn't necessarily doing anything wrong merging with Time Warner but they're employing a defensive strategy that might buy them time and some leverage but not for long. While Comcast is largely adopting a strategy of mergers and acquisition that has come to define the cable and media industry, it only points to the weakness of the industry as a whole as they try to arrest the winds of change by huddling around a dimming camp fire.

In sum, whether the DoJ and/or the FCC (which they likely won't) approve the merger or not, Comcast fate is largely in their hands.

(The Big Disrupt) Interview: The Carnage Report Talks With Jason Long, Founder And CEO Of BrainLeaf

The Carnage Report was lucky enough to catch up with Jason Long, founder and CEO of BrainLeaf, a brilliant service that helps designers and developers tackle with efficiency and ease an issue that has plagued designers and developers for years, the difficultly in controlling the scope for projects. Read this great interview where we talk about Brainleaf's beginnings, entrepreneurship, managing multiple businesses, new features, and Long's long term plans for BrainLeaf. Connect with Jason via Twitter @jasonmlong and also pay visit and sign up to use BrainLeaf and find out just how great a service it is for yourself at brainleaf.com

What inspired you to start Brainleaf?

Developers are optimists. Well, at least most of them are. And the problem with optimists is that their estimates are very often, optimistic. Telling someone that you're going to be at a meeting 5 minutes early then being 10 minutes late is annoying, but telling someone a job is going to take you 50 hours and it taking you 150 can kill a service company. So after running a web studio for a few years we realized that this was a problem that wasn't going to just go away, and that if we were going to make any money at all, our estimates had to be solid.

So we built a simple system to help us figure out how many hours projects were going to take. It was a good internal system, but needed a lot of work, and didn't have any way to reuse aspects of old projects. So after 7 years of using this system, we decided it was time to make some improvements, and maybe, just maybe everyone else would like to give their clients accurate estimates as well. Thus BrainLeaf was born.

Have you always been interested in starting a business?

From the time I was a kid, I always knew I would own my own business. It runs in the family. My grandfather owned hotels, my mom has had something like 10 businesses, and I have had 8 now (some worked better than others though). I really wish that I knew then what I know now though, but I guess that is what everyone says.

When you started BrainLeaf, what was important for you to get right first?

We still run a web shop, so my main priority was getting a system that would actually work for us. We're still making improvements every day, but starting off, I just wanted a system where I could create a scope of work, know how long things were going to take, and be able to give this to our clients to sign off on. Getting accurate scopes of work that can be reused was our phase one goal.

Our upcoming features are going to make it so much better though, and are a quick phase 2 goal set. We're working on a web-based approval process and contract management system so you can write up a scope of work, send it to your client, and have them sign off on a legally binding contract all within a few minutes. For us, this will save hours of work each week and enable us to close jobs so much faster and keep track of them so much better. We've also got a set of integrations with other tools like JIRA, Harvest, and Basecamp upcoming which we are really excited about!

Project management tools and applications has become a crowded market, what do you do to stay ahead of curve and deal with competitors?

We're not a project management system. Internally, we've used Clarizen, Wrike, and now JIRA to do actual project management, and we have absolutely no interest in competing with these guys. Atlassian does such an amazing job on everything they do. The thing that is truly missing in this industry is a way to get and give accurate estimates. Additionally, developers and designers are often sloppy with their contracts and sales, so a system that just enables them to write up their scope of work, calculate hours, and get signatures from clients, then pass it on to their project management tools is so badly needed, and that is what we do.

Do you plan to expand your service beyond developers and designers?

Yep. We've actually been contacted by a number of different groups in different industries about using our system. We want to finish up with our web-based approval process system first, but once we do, you can expect to see this system coming out in at least one other completely unrelated industry.

What advice would you give to someone starting their own business?

I feel like I could write a book on this question. I'll try to do this in a quick bullet list though.

Businesses can be grouped into two categories, lifestyle businesses and high impact businesses. A lifestyle business is something that you do because you love it. It is something that you want to do every day and must be present for all the time. For example a designer, architect, or lawyer, if you are the craftsman, is often this kind of business. A high impact business would be something that you plan on building into a system that is professionally managed and you can step away from. There is, of course, overlap, but in general you need to know what you are getting into before you get started. I didn't realize this and started a lifestyle business years ago when I wanted to do a high impact business. It took me years to understand how I needed to set things up in order to make it work the way I wanted to.

Always be working yourself out of a job. Nowadays, in whatever I do, I try to find ways to automate or delegate pieces of my job. As a CEO you will NEVER run out of things to do, so figure out the best way to do what you're doing, set it up properly, then get something or someone else to do it for you, and finally make sure they are incentivized and accountable for that job.

Keep your goals in mind. Every year at the end of the year for every business we review the past years goals and set up goals for the coming year. Every month we have a company meeting for every company where we do the same thing for the previous and upcoming month. Always know where you're going or you can't get there. Sometimes you have to break it down into just 'what are we doing right now', but if you don't know your end goals or intermediate goal, how will you accomplish it?

You people are always, always, always, always your best and most valuable resource. Don't forget that. Everyday find ways to make your employees hopes and dreams come true while simultaneously growing them and you will find success. At the same time, don't forget the adage 'hire slow and fire fast'. If someone isn't the right person, do them and yourself a favor and let them go right away. Don't wait, don't hope, just let them go if they're not working out.

Like I said, I could probably write a book about this, but this is a good start.

When starting a new business most people, unlike yourself, start a business in a field they have no experience in, why do you think that is?

When I first started in web-design, I had no idea what I was doing. After losing tons of money, being completely stressed out for years, and almost dying (true story) I only start and invest in businesses I know a ton about now. So thinking back on myself as a younger person, I just had no way to know what I was getting into. I didn't understand the complexity of the system, what it took to make things actually work, and how much work it was going to be. My feeling is that entrepreneurship should be taught in schools, so to answer your question, I think it is just being uninformed about what is actually involved.

Where do you see Brainleaf going in the next five years?

I want it to grow into the system that developers and designers use to scope their work and deliver those times and prices to clients. Pretty simple. There are so many features that we want to add to make that happen. Here are some of our improvements upcoming:

•  Web-based approval processes
•  change order management systems
• permissions setup for project managers, resources, and sales team members integrations into JIRA, Intervals, Harvest, Wrike, Asana, Basecamp, and other systems
• API development and release
•  feature linking within scopes
•  commenting and discussions
•  composition and page approval systems so that clients can approve work through the system
• integration into code repositories 

And so much more!

You’re involved in other businesses as well as Brainleaf, how do you find the time meet the goals and ambitions of these businesses?

Amazing people work with me. We work so hard to find the right people who are enthusiastic, innovative, and hardworking, and they drive the business. I just set the direction and create the initial workflows, incentives, accountability systems, and oversee to make sure everything is moving well. When working with these amazing people, I work every day to support them and help them accomplish their dreams in life. I wish I could say there was some magic thing I did beyond that, but it is really just that.

And finally, what’s your favourite business book?

The books that had the greatest impact on business for me were "Good to Great" and "The E-Myth". But if you're in development, I also really recommend "The Mythical Man Month".

(The Big Disrupt) Interview:The Carnage Report talks to Robert Brill of Brill Media Consulting

Thanks to the disruptive winds of change brought about by the advance of technology and the proliferation of new platforms and channels, the media and, by extension, the ad industry has become more interesting and complex than it's ever been. The Carnage Report is lucky enough to talk to Robert Brill of Brill Media Consulting who makes his living helping his clients see the forest through the trees in this new paradigm of programmatic media buying as we navigate the ins and outs of this relatively new and complex reality. Connect with Robert via Twitter at @RobertBrill or make a visit to Robert's site at brillmediaconsulting.com

Hi Robert, what inspired you to start Brill Media Consulting?

I had spent 12 years helping marketers large and small develop paid media strategies, and certainly enabling agencies large and small to develop their digital media practices.  During that time there was always a desire to have control over the direction of the clients I work with, control over my time, and the ability to take on projects that stoked my passions.  Now I have all that!

What’s your view on the current state of media and advertising industry?

Media today is amazing.  It’s completely democratized.  If you have a story, a voice or even simply an idea the rest of the world has already developed for you the elements that, in the past, would have been insurmountable hurdles.  Those elements are distribution channels, content creation tools and ultimately the ability to develop an audience. 

Anyone can create or curate content, develop that audience, and command the attention of advertisers.  Stars in the traditional sense are competing with creators.  There is someone out there right now who has to choose between spending time paying attention to a TV star, a Vine Star, a YouTube Star, etc.  That’s immense power for creators and consumers. As a result we’re seeing the golden age of content creation, and the formation of a new content landscape.  Everyone with a voice turns into their own format, that if developed, turns into a new type of interactive media channel that advertisers are paying attention to. 

The ad tech side is equally as interesting.  The hard work of developing proprietary solutions simply to operate a media sales enterprise has gone by the wayside.  By connecting to the programmatic ecosystem buyers and sellers meet to exchange value for ad inventory.  And, it’s not just ad inventory.  The matrix of solutions is multi-dimensional – ad placement, user data, creative and pricing are all important in ascertaining when and where to serve an ad.  The marketplace is so much more complex today than simply using context as a proxy for age and gender.

Can you, in your own words, provide a definition of programmatic media buying?

It’s the use of data and automation to make smarter ad serving decisions.

What form of programmatic media buying is better in your opinion, RTB (Real Time Bidding) or Non RTB?

It’s less about better and more about use cases. Better, in your question, is really a way of describing the set of factors that are best applied for a single advertiser’s unique situation at the current moment.  If you are a direct response advertiser you may prefer RTB channels to find the lower priced inventory that others couldn’t find value in. 

If you are a brand advertiser then you may be interested in non-RTB inventory that is bought today and fulfilled tomorrow; the forward markets.  If you’re a trading desk then you may develop a proprietary set of premium publisher relationship that you turn on at will to give clients your premium network solution. 

Not so long ago publishers complained about programmatic affecting their ad prices negatively and advertisers pointed to fraud. In your opinion, what obstacles do you think are in the way of both advertisers and publishers making the most of programmatic media buying? 

There are a few.  The first is naming.  If you look at the IAB chart that details the four types of programmatic buying you’ll see each category is also called three or four other things depending on the platform that’s being used.  Invitation Only Auction is also called: private marketplace, private auction, closed auction or private access.  Can we just have one name for it?

Education is the next challenge.  Programmatic buying seems to be a more complex mode of operations today than traditional (digital) media buying was just a decade ago.  That’s really because we’re in a state of profound change.  At some point there will be parity in the marketplace, but for now programmatic media requires smart executives to really figure out the nuances of this space, and then filter up and down the organizational hierarchy the elements that are important to each level.

The senior management needs to know how programmatic is changing the landscape, presenting opportunities and creating threats.  They need to use that information to make smart enterprise decisions. The middle management group needs to see programmatic as a way of meeting revenue goals, or losing them if they don’t adapt.  The operations staff needs to know the how to use programmatic toolsets, how to test and adapt for business success, and how to drive revenue. 

The junior operations staff needs to know how to setup campaigns, to pull reporting, ensure campaigns don’t over-spend and ensure the senior folks have all the client data they need to make smarter strategic and account decisions.  The sales group needs to see programmatic media as a source of either protected revenue today (if they already implemented programmatic), earned revenue tomorrow if they adapt to programmatic media today, or lost revenue tomorrow if they don’t adapt to programmatic methods.

On a more practical level it’s still difficult to activate Private Auction (aka Invitation Only Auction) deals between some buyers and sellers.  Because ad tech is so flexible it also becomes a little complicated to use.  So, when something is wrong it’s not just the agency (for example) and the publisher who need to communicate.  Now you also need the DSP rep and the SSP or ad exchange rep to be involved. That means more people to get on the phone, finger pointing and people who really aren’t sure who’s at fault.  Fault in this new and really complex transitional period should be less of an issue, but buyers will always look for opportunities to ask for added value.

Sales people are worried about their commissions.  Many times they are only interested in getting programmatic developed when they start seeing the clients are changing their ad spending patterns, or worse, they start losing buys.  The challenge is that the media press sensationalizes when networks or publisher terminate their sales staff.  If the publisher has a differentiated offering then they need sales people to evangelize that offering.

If the publisher doesn’t have a differentiated offering they still need people to educate programmatic buyers about their programmatic offering: different RTB opportunities, proprietary data offering, private marketplaces, unreserved fixed rate inventory and certainly automated guaranteed opportunities.  If you have something to sell then you need a seller to educate buyers about the opportunity. 

So, sales people are concerned about their jobs and their commissions, so there’s an interest to push away from programmatic products.  Relationships still matter.  In a few years programmatic will simply be called advertising, so the more you do today to become a programmatic operator the more business you are protecting from tomorrow’s competition.

Why do you think TV networks are prepared to sell their inventory programmatically when they command high prices currently and programmatic media buying having the reputation of lowering ad prices for publishers?

Some of the info above applies to TV ad sellers. When buyers demand to buy space using programmatic pipes sellers will cave to the demands of the marketplace. Premium and high quality inventory are important.  So, programmatic pipes will make the selling of premium TV inventory a viable solution.

A second component of that buyer demand will be the ability to tie back viewership to audience data.  Buying towards data segments or customer segments will become an important way TV evolves.  There is so much research that goes into understanding the customer, but then buyers for 60 years have had this really blunt force tool to buy TV ads: age and gender reach augmented by frequency.  Exponentially more information about the consumer journey exists, relating to use cases, user experiences and the value that products bring to consumers. Advertisers have this information, so programmatic TV is a way for buyers to be more precise with their TV buys.

Many, including you, have talked about the upsides of programmatic media buying. What, in your opinion, are the downsides of Programmatic media buying?

It’s change and change causes problems for institutions, companies and people.  This disruption means that new players will win that would not have had a chance had programmatic media not developed.  Certainly people who aren’t interested in learning about advertising’s future will be left out. 

There will be a human cost, and that’s unfortunate, which is why we are always interested in educating the marketplace about programmatic media.  But that doesn’t stop innovation from happening.  During this 10-15 year transition period that started in 2009 companies who don’t adapt face mounting costs from missed opportunities and the need to adopt multiple new technology solutions like viewability measurement, audience data measurement, SSPs, new programmatic experts, sales training, etc.

Publishers are facing challenges with RTB pricing, although recent reports I saw claim that RTB CPMs are now leveling off or even increasing. Agency buyers have to be well versed in modes of operating that they were not prepared for.  So, it’s hard, but really I see this as an upside.  For the right buyer they can make their way to be the star of an ad agency because they get ad tech.  For established executives who don’t adapt this could be their death knell.  The same holds true for those on the sell side who won’t or can’t wrap their head around the programmatic approach.

Do you think iHeart Media quite recent move to offer ad space programmatically is a wise move given the medium continued decline in audience and ad revenue?

Of course.  If the entire advertising business is looking for more operationally efficient ways of buying air time of course iHeart Media wants to be part of the evolution, especially if ad revenue is declining.  I’m sure there are media agencies all across the US who are also looking for those operational efficiencies and are pleading with these traditional media companies to simply adopt even a very basic programmatic approach.

That operational efficiency helps the agencies too. I think this is a great move for iHeart Media because it gives them a chance to maintain legitimacy, along with their new products like the app and their live streaming stations, in the rise of a changing marketplace.  Streamlined operations, easier access to buyers and an easier path to purchase all enhance the opportunity for iHeart Media.

What do you think of AOL’s announcement last year to launch ONE, a “single, unified (programmatic) platform”?

I really like this solution because it represents a big step toward differentiation of buyer platforms.  For a few years there has been a general level of parity in the marketplace for buyers.  DSPs have generally provided the same 90% of functionality across the board.  AOL One, to me, represents diversification away from that parity and into new grounds.  Of course AOL is fundamentally a seller of inventory, but they can certainly be a provider of great opportunity for the right buyers who get onto their platform. 

Also, it’s clear that the unified measurement tech is being trotted out as a differentiation point across multiple vendors, all of which use that functionality to differentiate themselves.  At the end of the day what matters to the buyer is the effectiveness of the tech.  If it works than that’s a win.  If it is simply a tool to get buyers in the door, and then sell them a parity product, or AOL’s inventory than that’s a great job by AOL to sell inventory, but it doesn’t fulfill on the promise of pushing the industry forward.

On the prognostication front unified measurement is definitely a point of opportunity, and I’d say a foregone conclusion. Unified DSP / DMP dashboards on the buy side use technology for a unified consumer engagement measurement.  It’s a matter of making this tech work with existing privacy challenges in place.  Certainly Google can do this, but doesn’t dare touch this space for fear or toppling an immensely profitable empire.

What would do you think is the biggest misconception of Programmatic media buying?

I love how mystical people think this space is.  It’s not.  As advertising experts we owe it to our professional value to ensure that it’s not viewed simply as a great opportunity for others to capitalize on.  No.  This is the knowledge that advertising experts need to have.

What do you see happening in the future of programmatic media buying?

Programmatic media goes away.  It’s called advertising.  The amount of conversation about this space is due to how new it is, and how much of a change it’s causing.  At some point it because part and parcel of advertising.

It integrates into the Internet of Things, ingesting data from all the data points a human and its things creates daily, and turns that information into actionable data about product / service opportunities to be sold. The unification of data and attribution of data across devices becomes a defacto way of doing business. Audience information is infused into more traditional media and TV for ad decisioning  and reporting. Buyers use a centralized interface consisting of a DSP and DMP to ingest their entire advertising infrastructure and deliver data that turns informs future planning decisions.

Workflow automation is picking up importance. Publishers have to work with the same programmatic companies that offer RTB to be available and pay for the opportunity of being able to accept a direct deal.  Agencies are outsourcing part of the Automated Guaranteed buying process. 

Similarly, companies will realize they need a forward markets supply side platform. Current order management solutions that already let sellers understand their available inventory will become a competitive threat to traditional SSPs as Automated Guarantee buys become more important.  These forward market SSPs will end up facilitating the most premium programmatic opportunities (Automated Guarantees) just as RTB SSPs end up approaching the same challenge from an RTB angle.  Fundamentally though, it seems that businesses who have historic success with enterprise guaranteed inventory will have a leg up on RTB solutions who patch on to an Automated Guarantee module.

Local media and their agents become very important.  I’m building a business called AudienceBoom.com (site is almost live) to help local business leverage these immensely powerful platforms, along with social platforms, to outsmart their competitors at spend levels that are scalable for the corner restaurant, coffee shop or dog walking service.

And finally, what advice would you give to someone thinking of getting into programmatic buying?

Three months is like 9-12 months in other industries.  Standstill doesn’t exist, because once you’ve mastered a tech solution it either evolves into a new version, or a new competitor creates a better solution altogether.  Don’t be afraid to make decisions.  This marketplace changes so quickly that bad decisions are really just decisions that aren’t made.

Everything else can be rectified if the outcome doesn’t match your expectations.  Likewise, every perceived market leading decision can be easily trumped in a few months by a new provider, so don’t stop.  Business fundamentals are still critical: be smart with your money, provide great customer service, maintain your integrity, and build long term relationships.

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(The Big Disrupt) Interview: This Week In Startups talks to Pebble Founder and CEO Eric Migicovsky

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Check out the powerful first and official international trailer of new film, "The 33", depicting the dramatic events behind the famous 2010 rescue of 33 Chilean miners after a mining accident starring Antonio Banderas, Lou Diamond Phillips and Gabriel Bryne.

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