MIAMI \u2013 From a perch like that of Joanna O\u2019Connell at Forrester Research, it\u2019s hard not to see the big picture in the roiling television business and what needs to change. Whether it\u2019s the \u201cinsane\u201d practice of continually chasing lower CPM\u2019s or the \u201cchicken-and-egg\u201d Netflix business model.<\/p>\n
Overall, the Principal Analyst believes that things are moving from \u201cconversations about how the TV industry is evolving to action in the TV industry,\u201d O\u2019Connell explains in this interview at the recent Beet Retreat Miami 2017<\/a>.<\/p>\n \u201cIt\u2019s a massive industry. It was been very, very slow to change. And I think it\u2019s still moving relatively slowly in a lot of ways for a lot of reasons. But the energy this time feels meaningful, as though we are graduating to action.\u201d<\/p>\n Because of her grasp of the complicated adtech ecosystem, it\u2019s easy for her to boil things down when the issue is consolidation of players. She notes that some companies are interested in owning the full technology stack, \u201ceverything from data management and analytics and data as an asset” through to execution.<\/p>\n Then there are \u201cthe other set of companies who, at least so far, seem less interested in getting into the execution game. When you look at consolidation, to me that\u2019s the most interesting dynamic,\u201d O\u2019Connell<\/a> says.<\/p>\n The bottom line: will execution inevitably become \u201cpart of these massive clouds? It sort of feels like it will. And yet if you ask them, some of them deliberately take a stance that it won\u2019t.\u201d<\/p>\n While she appreciates the efforts of media companies like NBCUniversal to accelerate the shift from buying demos to audiences, O\u2019Connell believes that things can only progress so quickly. There\u2019s a lot of inertia in basic business dynamics.<\/p>\n For example, the traditional, procurement-driven practice of \u201cgetting CPM\u2019s lower than the CPM\u2019s that the agency achieved the prior year. Which is insane. I don\u2019t know what else to say about it. It\u2019s a crazy model.” A model of “rewarding efficiency and effectiveness needs to become more of the norm,\u201d she adds.<\/p>\n Asked whether Netflix will go the ad-supported route, O\u2019Connell evokes the chicken-and-egg causality dilemma. Are consumers demanding ad-free services like Netflix, or is the company driving change that consumers embrace?<\/p>\n Either way, Netflix has made some companies up their game, according to O\u2019Connell.<\/p>\n \u201cSo when we are in an ad-supported model, it\u2019s one that consumers don\u2019t hate but actually find valuable. Let alone not annoying, can you imagine if they actually found it valuable?\u201d<\/p>\n