April 13, 2010

My Dinner with Stanley, Part 3.


Earlier this week, Stanley shared his views on the new Madison Avenue and government's role in changing the dynamics of the marketplace. As a result, the business of communications today is different and in some ways is more restrictive to conduct business. Conversely, just as the business has become siloed, the programming restrictions have been relaxed to a new level that challenges the sensibilities to some of what was once considered tasteful vs. tasteless.

Yet, in Part 3, Stanley addresses the forces in the marketplace that are correcting this and the direction advertisers and agencies need to take to utilize television effectively in the 21st century.

Tim: Once upon a time, the stations at one time had to be sensitive to "serving the public interest" and overseen by the FCC to make sure they did that. Besides consolidation, programmers have no restraints from airing almost anything. What's the effect of that and its effect on the television medium? Some of the advertising out there is pretty raunchy too.


Stanley: When you ran Casablanca, you never saw intimate scenes between Humphrey Bogart and Ingrid Bergman. You knew what was going on even though you never saw it. Today, they show everything. Now when you do that over and over, you numb the public. And the public today is numb. That's not healthy. People stop thinking about what's right or wrong. In entertainment, in government and in their communities. They just shrug their shoulders. It's become no big deal. Everyone agrees but few discuss how this rubs off on the advertising that runs in controversial programming.

Tim: It's even more provocative in film.

Stanley: You're right. There was a time that the movie business still had some theater screen advertising in the previews, double features. The movies were made by professional movie makers. When I say professionals, I mean they made King Kong. They didn't do a $210 million remake. They didn't do a $150 million remake of a $5 million dollar movie called the Poseidon Adventure. All these remakes have nothing to do with artistic quality. They're being remade to hopefully make a ton of money. Then, when half of these films or more lose money, they're like deer caught in the headlights. You can't formularize creativity.


Tim: So art has suffered. And culture.

Stanley: There's no question. That's why George Clooney made "Good Night and Good Luck." It's based on a speech that Edward R. Murrow made before in 1958. Did you see it?

Tim: I loved it!

Stanley: It's a populist speech. I have it here. There's a mistake in the movie. Few people will catch this but the film opens saying with the date "October 25, 1958" on the bottom. The speech was actually made on October 15, 1958. I've been listening to that speech at least every 3 months in my career, and have for the last 15 or 20 years. Nobody knew it was recorded. Murrow did it for himself. It's a remarkable speech because in it he said that if broadcasting does not educate and inspire as well as entertain, then TV and radio are nothing more than a bunch of wires in a box. That's just part of the speech. The rest of it is even more important.


Tim: Is it like - has it become like Orwell's 1984, except...

Stanley: Except what?

Tim: Except that instead of big brother controlling everything...it's been dumbed down so that it has very little control over society. It's all background noise. Murrow's message was that the media has a responsibility to inspire society but it's done the exact opposite.

Stanley: In my opinion, many of the people who are running the media don't trust the public. If they did they would produce more things of substance. In Murrow's speech, you will hear him say that once a week each network should take an hour and devote it to education. He came up with this idea knowing that one hour of programming would not hurt the networks profit. In fact, a network could make money. Many years ago, the president of a major TV network told me that one day TV would become like radio. He was right. TV has become radio. When cable started, it started to cannibalize the networks.

Tim: More and more channels.

Stanley: Now cable is cannibalizing itself. One cable network has just set up a new division that will eventually split itself into another 35 networks. Soon, we're going to see the auctioning off of channels 2 through 13 to the major media networks, which will create an even stronger monopoly. Instead of monitoring the marketplace, the FCC done nothing at all to consider the consequences.


Tim: What's the impact of all this on Syndication TV? SFM Entertainment created the TV barter syndication model. The same idea now is to re-create that model on the Internet. The focus on broadcast-like content is now the hottest element on the Internet. The Internet companies produce something--or form relationships with traditional TV production and networks--to get it distributed on as many online channels as possible.

Stanley: Yeah, but our model was set up with shared risk. I would barter away 50% the time to the station who went out and sold it to local advertisers. I would keep 50% the time, and then I had to go sell my portion of the time. What's the time worth on the internet? Other than the large portals, which all have sizable audiences, the time it would take to develop deals with dozens or hundreds of sites to create a mass medium is still very difficult. That's a problem. The difference between the Internet and TV for a syndicator is that there is still very little revenue for the program provider.


Tim: Isn't that in part because Madison Avenue media agencies that control the money are going to continuing to steer the bulk of cash to TV, which is what's best for them? What a Network Buyer is going to get a $50 million budget for TV, will they ever come back to the client and say, "Hey we only needed $45 million. Here's $5 million back. Put it into the Internet." It seems to me that most people at agencies now just doing their job to protect their butt. They're just following management's behavior, which trickles down culturally. The bulk of what all CEO's think about these days is head-count. It's all about satisfying the stockholder. If the CEO only worries about that, why shouldn't his team?

Stanley: You're right. If things are going to change, the burden will be on the client-side. The problem is that the client has their own set of problems. They're under just as much scrutiny from Wall Street as everyone else. Everything's changed. Once you're smashed the model, you can't put it back together. And it's not only broadcasting, it's advertising and marketing.

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Tim: The client has been consolidated, in publishing and in agencies. You now have these three huge silos--publishers' agencies and marketers--which have changed everyone's focus away from average consumers, the real market they are supposed to be serving. The consumer is now secondary to the interests of the company. What's the impact of that in the media marketplace?

Stanley: Some of the world's biggest advertisers used to have an in-house agency. There's still one or two that have them but by and large they've all disappeared. They don't have them anymore. They let the agency make all the media decisions. Is anybody really worried about the Internet? Not that much. Today TV is losing audience. In order to make up their revenue they're adding more commercials. The FCC under eliminated any restrictions of the number of commercials networks could run per hour. Take a look at what's in "Desperate Housewives". I guarantee you there's a heck of a lot more than 20 commercials in the programs like that which have high ratings.


Tim: Which is going to kill the program.

Stanley: Now when we deliver a show to the network we deliver a 42 minute hour. It used to be 52 minutes. Where did the other go? On air promos. The amount of non-program material is turning the public off and the effectiveness of TV is wearing very thin. And that's why you see a whole new thing like product placement. SFM was doing product placement but in a very different way than it's being done now.

Tim: How did you juggle opposing pressures such as with SFM Media who was trying to plan and buy creatively which meant working hard to get as much promos and sizzle for the clients, as compared to SFM Entertainment which was focused on delivering the quality of the communication, without all the distractions? Now every single PGA golf event has a title sponsor. With so many sponsorships today, collectively they weigh the total impact of all of them down. The line between church and state is a now a blur and is getting worse.


Stanley: It's not impossible to do tastefully and effectively as long as there's natural synergy. We did it on a case by case basis. If there wasn't a natural fit, we didn't' do it. I give Mindshare a lot of credit for marrying Sears with "Extreme Makeover" for the household. That kind of synergy and relationship is perfect. It's a wonderful marriage. Perfect for Sears. They put a deal together with ABC and it's terrific. All the shopping for the makeover takes place at Sears. There's nothing wrong with that. It's perfectly fine. When we brought back the original Mickey Mouse Club shows for Disney in the 1970's into TV Syndication, we could not run a Disney commercial in the Mouse Club because it was already a "program-length commercial". That's what they called it back then.

To be continued tomorrow with Part 4. Stanley discusses new media and integrated solutions today and tomorrow.

The Editors

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