Why a Former Current TV Exec Believes in the Economics of Local Video
Last year, Al Gore and Mark Hyatt sold Current TV, the cable media upstart, to Al Jazeera for a reported half billion dollars. The deal marked the end for a project that many considered a model for video media as it moved into into digital world.
One of the minds who helped shape the project in its early days was Mark Goldman, a long-time television executive who served as chief operating officer for Current TV from its founding in 2004 to 2008. Before Current TV, Goldman spent a decade at Universal, helping the media giant navigate the transition into digital video distribution and enter the business of owning and operating television networks. Then in the late 1990’s, he was recruited by News Corp to develop its first satellite television service, where he ran Sky Latin America.
Now, Goldman runs ExtendTV, a demand-side video platform that specializes in location targeting. The company’s strategy focuses on helping existing broadcast and cable companies sell digital inventory to small business customers as an extension of an existing legacy advertising purchase.
Street Fight caught up with Goldman recently to talk about missed opportunities with Current TV, why he believes digital will not kill television (completely), and where he sees the local video market heading in the next few years.
After a lot of fanfare, CurrentTV ended up selling itself to Al Jazeera. Talk a bit about the project, and help us understand what others overlooked in its potential.
Current was at once an amazing experience and huge missed opportunity. What we were doing, which nobody realized and nobody understood with Current, was building a system to facilitate people telling their own stories. We had created an archive of all of these short snippets with people from all over the globe creating these three-to-five minute segments for us, which we owned for perpetuity.
The idea was to eventually build a range of ways for people to connect with those stores. Initially, it was to develop a TV network. But in the future the idea was to build websites and mobile properties and connected TV channels that people access to the vast repository of content. It’s where the industry is headed now. We were very early in the process, but we were well on our way to creating something extremely powerful both from a social perspective and business model standpoint.
A year and half after the sale, and you’re building a video startup for small business. What insights from Current TV helped drive you to build a product for the small business market?
I absolutely believe in the power of the video medium to shape public opinion and get people to take action. That relates to both content as well as advertising. If you look over the past 20 years, digital has exploded: newspapers have been dramatically impacted, radio has been reasonably affected, but television is pretty much as strong as it ever has been. That’s because video remains the most important medium for these companies to communicate their message.
If you look at the history of video advertising as medium it always starts off as a national phenomenon — largely, because the costs of production are much higher. But eventually, it develops locally. It happened with broadcast television, it happened with cable television, and we believe it’s about to happen with digital video advertising.
You have spent the better part of two decades helping legacy companies adopt new technologies. In the local media industry, the introduction of digital has been devastating for print and radio. When you look at the television industry, do you think it’s only a matter of time that they see the same fate?
So, traditional television companies, both broadcast and cable, still play a very significant role in the marketing scheme from a reach perspective. It’s very hard to replicate the reach of broadcast television.
If you look at the statistics about viewership habits, yes there is some erosion off television, but not nearly as much as you would think. Video consumption is actually just increasing as a whole. There’s a little bit of erosion in television, but a significant increase in digital consumption. It’s the growth of video consumption, not the decline of TV, that is creating the market for digital video.
Do you really believe that television will avoid the same fate as print or radio — albeit, at a slower rate?
I believe the shift will, and is, happening. But it’s just happening at a much slower rate than what we saw in newspapers. However, I do not believe there will be the same degree of complete disruption of the medium that we saw in the other businesses. It isn’t happening and there are some fundamental reasons why it’s not going to happen. There’s still a role for television in this whole ecosystem.
First of all, live sports and live news are a very different animal than a newspaper that was getting delivered to you once a day — a model that gets completely obliterated by the immediacy of the internet. I don’t think there’s any comparison.
And while the technology exists to deliver video over the web and mobile, the economics of digital video distribution break down much quicker than the economics of delivering audio and data. There’s still an efficiency in delivering this content through the television. I’m not saying that it’s not going to change: the technology is getting more sophisticated. But the economics of video are still much more in favor of the broadcast than these other mediums.
Let’s talk a bit more about the economics of content. Prices have never been higher for television ads, while the cost of video advertising on web or mobile is much less. Do you think an advertisement, delivered via television is more effective, and thus more valuable, than one delivered over a mobile device?
Actually, I think that when you’re watching video on a mobile device you’re likely more focused on that video than even television. You’re more engaged. I still believe that television is an extremely effective medium, but what we have seen this that what we’re offering compliments television basically adding frequency and engagement of a video message.
Steven Jacobs is Street Fight’s deputy editor.