Television Is the New Television

by Michael Wolff

  Its development into a near-universal compendium of video promotions, self-consciousness, and personal entrepreneurial gestures was a happenstance outcome that could hardly have been anticipated, or, except as a document of human theatrical nature, its vast server resources justified.

  Google bought it in 2006, not because it saw value in it as a going business concern, but as a new instance of human behavior. And that’s what Google does: centralize such instances, and then monetize the compulsive behavior.

  There was certainly no admission, or evidence, that Google thought it was going into the television business when it bought YouTube.

  Rather, it was an extension of the search business, a vast collection of information that might yield further information about the interests and habits and inclinations and desires of the people searching it. Against this marketing mother lode, Google figured it ought to be able to take its usually handsome vig.

  Again, nobody at Google saw this as show business.

  And, with the Viacom lawsuit, it saw the perils of stepping on show business toes. Show business, rather unlike the information business, litigated ferociously.

  And yet, there really ought to have been a threshold understanding: Video, no matter how truncated, or “real,” or the work of amateurs, is, at least to the market, performance and story. It was not going to be monetized as a mere function of data or compulsive behaviors. (In fact, to the extent it was, it seemed to show the low value of such a strategy—prices going down, not up.) It needed to be monetized for its impact—its message, its resonance, its characters and stories. If it could not be, then it seemed awfully likely it was going to stay a bizarre morass of sideshow content.

  In other words, YouTube was, whether Google liked it or not, on a long, circuitous, even quite tortured, journey into television.

  In that regard, it began to be clear that the main YouTube executive job was to undo what it was and turn it into what it might profitably be. This ended up creating a weird hearts-and-minds schism. YouTube, at least from the point of view of market logic, had to be the opposite of YouTube.

  It was something of the digital media paradigm: technology had enabled a substantially new notion of behavior and expression that, if it was going to offer a decent return, was going to have to look and act a lot more like the old notion of behavior and expression.

  The YouTube experience could not spell out media reality more clearly, a message sent to the rest of the digital media industry: video was television and the television business worked in very fixed ways. For one thing, it was not a random, or long-tail, experience. In television the valuable rose to the top. What’s more, that “top,” to realize ultimate value, had to conform to some brand’s usually quite conservative idea of cultural norms.

  YouTube, wholly advertising supported, was not just in the television business, it was in the old-fashioned, wholly sponsor-dependent, television business.

  Within YouTube itself this became a difficult and contentious notion. On the one side, there was represented the spirit of the medium, idiosyncratic and anarchic, attracting the worldwide devotion of video hobbyists and self-promoters, but unable to adequately monetize itself. On the other side, there was a new Google-imposed discipline that said that YouTube had to conform to the desires of the video advertising market but, creating further message confusion, this side, coming from digital media, knew little about the actual working of the video advertising market—in other words, television.

  A not-unexpected logic and plan unfolded. Google, starting in 2011, would turn to the professional television production industry to help it create more professional and marketable YouTube fare—or channels.

  Google money suddenly fueled a video production boomlet (one that in turn would spur the growth, and competitive furor, of digital video everywhere else on the Web). It was, briefly, silly money or dumb money. Google itself, as though to reinforce the etherealness or lack-of-stakes or get-it-while-you-can aspect, kept calling this an experiment.

  Soon enough, albeit hundreds of millions of dollars later, it revealed itself to be a failed experiment. Its results were not just bad, they were utterly perplexing. Professional television producers making YouTube-like television were not nearly as successful in attracting viewers as YouTube amateurs—and in neither instance were advertisers very impressed.

  Abandoning this experiment, YouTube refocused its efforts on its own homegrown stars and producers. There was, around YouTube videos, a growing professional culture. There were large, convention-type gatherings of YouTube performers and promoters. Hollywood talent agencies, keen to have digital bona fides, had YouTube-focused agents. Maker Studios, a native producer of YouTube videos and promoter of YouTube talent, was sold to Disney for more than $500 million.

  YouTube, suddenly excited that YouTube might finally be catching up with the market, launched a major campaign—much of it in old media—to promote, in television fashion, its own stars.

  Google sent in one of its key executives, Susan Wojcicki, who had masterminded much of Google’s search advertising strategy. Wojcicki said the YouTube strategy was to be more like television.

  In essence, it was a bifurcated strategy. The original YouTube would be relegated to a nether YouTube, a low-end and low-margin outlet, like certain low-performing areas of the cable dial. A new, sanctioned, and promoted YouTube, with content more suitable and tailored to big advertising brands, would rise to the top and become the face of YouTube. It even had a name, YouTube Preferred. Wojcicki explicitly articulated the new, adult, profit-potential YouTube rationale in an Orwellian language reminiscent of 1970s network television: “It works for advertisers, but it also works for creators. It gets back to this ecosystem issue. If you are a top creator, you want to make sure that you are in front of the brand advertisers who want to spend more dollars on the platform. And if you are an advertiser you actually want to also be with the creators who are going to complement your advertising messages.”

  If you can cut through the corporatese, what you see is an executive trying to stick a finger in the dike of falling ad revenues. The exact process everyone else is working to erode—with all traffic becoming equal and divided by calculable demographics rather than ranked by tastes—is the television world YouTube is hoping to recreate.

  Television was YouTube’s business, but one—perhaps because Wojcicki and the rest of Google’s management were in temperament and craft remote from it—that it was a long way from cracking.

  An analyst at the investment bank RBC Capital Markets, David Bank, summed up the dynamic and Google’s quandary in late 2014: an entire week of YouTube is roughly as valuable to major advertisers as a single, first-run episode of The Big Bang Theory.

  Wojcicki’s view of the business seemed a little like battlefield triage. Television, however inadvertently it had come to YouTube, was the hand it had to play. If this involved a subscription plan, so be it. If this involved licensing premium video content, that, too, was a viable option—that, in other words, YouTube might be Netflix. What seemed clear is that the future of YouTube was not YouTube. It was the established video marketplace.

  20

  FACEBOOK TELEVISION

  Curiously, while the Facebook News Feed was once an effort to create a new information experience, each friend a provider or filterer of necessarily personalized information, the effort, more and more, has been to focus, sharpen, and limit the News Feed in ways that are much more reminiscent of traditional media than of the flattened, random information landscape of the Web.

  Reasonably, as the Facebook News Feed goes, so goes digital media.

  In 2014, Facebook, heretofore reliant on embedded clips from YouTube and other platforms, launched its own video player—like television itself, the video is running as you enter.

  Mark Zuckerberg’s notion of a mostly video News Feed is both obvious and disingenuous. Digital media is more
and more image based; an increasing proportion of those images are video; video is now trivial to make and upload; Facebook’s player, as well as many others, makes it seamless to watch; video offers many more “premium” advertising opportunities than text. What’s not to like?

  But in another way it is an entire remaking of Facebook, a remaking that offers any number of ultimately divergent outcomes, starting with the question of how much you want to be in the social media business or how much you might rather be in the television business—or which is more dominant when you try to marry the two.

  Asked another way: is the move into video guided more by advertising and revenue growth, or by Facebook’s notions of social stimuli and changing modes of behavior? (Both, they will say, of course, but if only for argument’s sake, choose one.)

  In a sense, Facebook video seems inevitably and merely to be YouTube—and, at that, YouTube of four years ago—with your friends using Facebook to showcase their personal and promotional videos. This may be the natural water level of the form: transient, low-value, shared media keepsakes (keepsakes nobody keeps). And, anyway, in a sense the form, and its inherent value (or lack of value), may hardly matter. The greater point is the competition between the two ruling digital media platforms: Facebook and Google/YouTube. Basic platform theory is that dominance will win you the future (even if the shape and strategy of the future is unclear). Hence, Facebook, the upstart, tries to steal market share and ad dollars from Google in as many categories as possible, launching products like search and now video to do so. In other words, the choice between social media business or television business is a faulty one; rather, it’s a consistent effort to achieve dominance in the platform business.

  On the other hand, it’s still video, a demanding and expensive form.

  As the value of amateur video sinks, the hope at YouTube, and now, too, at Facebook, is in “premium video.”

  It is worth a moment to consider just what premium video is: It is the opposite of native Internet video. It is not that it is better, but it has a clearer provenance; it has a brand; it is produced, according to Facebook, by a publisher. This in itself is odd, because publishers publish, they don’t produce (true, the act of publishing has taken on some highly attenuated metaphorical meaning in digital media; nevertheless, it still means what it means). But the premise here is that video has become so artless to produce that anybody can do it, including publishers without particular video expertise, but who nevertheless have a brand authority. Hence, Time Inc. became the first publisher to upload videos to the Facebook video player. Now it is worth noting that Time Inc. was spun off from Time Warner precisely because it was not in the video or television business. And that rather is an indication of Facebook’s level of video play: it’s reliant on a new, low-level entrant in video, albeit with a well-known name, though not one in video. That’s premium. A code word for second-rate, but openly better than third-rate. (Also worth noting, Time Inc. was the first mainstream contributor to AOL, helping it vault from message board to media—to ultimate calamity.)

  But premium is relative, of course. Today’s premium easily becomes tomorrow’s dross. The competition among publishers with no particular expertise in making videos is already resulting in a glut of underproduced, underwritten, underpresented, more or less desperate-feeling videos from heretofore quality-conscious brands. Hence, soon enough, the game will kick up a notch—and then another.

  The point is that premium means better than the average, whereas Facebook’s basic business has all been based on the average, on the glut, on the dross—it didn’t matter what people posted as long as they posted a lot.

  Premium changes that. It requires the act and the process of distinguishing your product. It means you have to economically incentivize the makers of your product to do more—in other words, the price goes up.

  What you are doing is moving out of that strictly Internet form, one-to-one, nonhierarchical, no filter, come as you are, into the opposite form, which is produced, selected, sanctioned, curated. Yuri Milner’s idea that, in social media, you don’t have to pay for content is, in other words, wholly disrupted. The Internet ethos of unmediated conversation and contribution is cast aside if not obsoleted.

  Facebook is, too, in its premium efforts and in its market share war with Google and YouTube, trying to attract YouTube stars into its own News Feed firmament. This represents a curious homogenization. It also sets up something of an inevitable bidding war. The economic model for acquiring entertainment product in digital media becomes no different from the model in traditional media. Facebook and Google are merely competing networks. (CBS was the fledgling network in the mid-1950s until Bill Paley stole much of NBC’s talent.)

  And likely, in the hunt for limited top-of-the-top premium content (i.e., proven hits), Facebook and Google both become competitors and collaborators with traditional networks and producers, reestablishing the offline pattern of networks fighting for ratings but at the same time, through syndication and other production deals, selling one another’s products.

  On the one hand, in its sales pitches for video ads, Facebook is touting its ability to steal ad dollars from network and cable TV (this is from a purloined Facebook sales deck that made the rounds):

  1. You want to be where people are. Changing consumer behavior should shape where you spend your marketing dollars.

  2. You want to reach all of the people who matter to you. Facebook has unparalleled targeted reach.

  3. You want to be in the most engaging digital real estate, which, as you just saw, is Facebook’s News Feed.

  Forbes, echoing Facebook’s pitch and, as well, the twenty-year promise of digital media, intoned in its coverage of Facebook’s new sales initiative: “TV networks, Facebook is coming for your business. Don’t say they didn’t warn you.”

  But at the same time, Facebook was playing up its value as a TV partner. It sees itself as the perfect promoter for television shows, being able to combine previous “likes” of similar shows, and intersecting friends’ likes with your likes in some hit-making data wonder. The next step seems as natural: Facebook, in Netflix, Hulu, or Amazon fashion (but, as possibly, in combination with Netflix, Hulu, or Amazon and with all other producers and distributors), becomes an OTT bundler delivering video streams within its platform. See an ad for How to Get Away with Murder on Facebook, then, with a new pay-TV authentication function, you can click to watch it via the appropriate app on the device of your choice.

  In other words, Facebook sees itself as a potential new sort of dial, serving up television recommendations from your friends as well as through paid promotions, all seamlessly toggled to your existing accounts or credit card info for single-episode purchases.

  In the digital worldview, this remains an example of the coming and inevitable disruption of the old media world, but that’s just a continuing solipsism. Facebook might now still exist in something of an independent world of its own making, but in a world of exclusivity and of ultimate premium content, leverage is at best divided between producer and distributor, between buyer and seller, and invariably tipping toward the hit maker.

  21

  PREMIUM PLUS PLUS PLUS

  Everyone was, in their way, suddenly in the television business, albeit mostly the cheap television business. The New York Times, which, in sixty years of coexistence with television, had not confused what it did with what television did, or presumed that it could do what television did, was suddenly an aggressive video producer. Every reporter who hoped to go anywhere at The New York Times had to be able to produce video and to be a video star, to turn his or her own maladroitness, bad wardrobes, and ungainly features into some kind of charming shtick.

  In some sense the perception was, digital allows us the freedom to produce bad (and low-cost) content.

  That seemed to be one of the fundamental new media advances: low content costs. Produce so much content at s
uch low costs that no one would quite notice it was dross. At least, they wouldn’t feel like they could complain.

  Indeed, Google, Facebook, and Twitter, along with most other digital publishing platforms, have had virtually no content costs.

  The premise has been that technology itself—functionality—provided the media’s reason for being. Users and the new tools available to them would create the interest and frisson and habituation that would propel the medium—and give it an unbeatable cost advantage over traditional media.

  Even content-specific sites have largely and rigorously held to this new spend-less standard: a smaller revenue base simply means a smaller budget. (A continuing and perhaps insuperable conundrum for traditional media trying to adopt a digital form is the transition of costs. The New York Times’s digital product—what it says is its future—would be impossible without the content provided by and paid for by its paper.) An argument has been that, along with user-generated content—a kind of economic digital media grail for the past several years—digital tools and conventions can create a much lower content cost basis than has existed in traditional media.

  One key aspect of this has been aggregation, a constant reprocessing and redistribution and ultimate universal sharing of the same material, with its attendant effect of sameness and brand dilution and lower value.

  Part of the effort to break out of that downward spiral has been the wide adoption of original video. But this, too, was looked at in low-cost digital terms. Here was the possibility of a unique product, one that commanded significantly higher advertising fees, but that was yet cheap to make. A revolution in camera and editing technology had reduced the basic cost of production to practically nothing. And YouTube had established a set of production-value conventions that even seemed to make more expensive television conventions largely irrelevant—even a negative.