Television’s Two Sides of Revenue

With the sour economy, declines in consumer spending and sagging prime-time rankings, network sales executives have had to work overtime to sale ads this summer. For more than a month, talks were stalled because advertisers were demanding steep cuts in pricing -- and the networks initially were refusing to give in. Several weeks ago, the impasse melted and the networks started to slowly ring up sales with major advertisers. Fox Broadcasting has said it is nearly finished selling airtime to advertisers for the upcoming season but declined to provide a dollar amount or say whether the revenue includes cuts in pricing. However, Fox conceded that it did not sell as many prime-time commercials this summer as it has in the past. That is an indication that the network held back commercial time rather than slash prices simply to make sales and move inventory. The network is confident that its new fall shows will perform well in the rankings, thus allowing the network to command higher prices later on in the year. Meanwhile, NBC is aggressively promoting the new Jay Leno show with different tactics. A teaser Web site is providing fans with a 24-hour Web cam inside Mr. Leno’s studio. Last weekend Mr. Leno started to show up on popcorn bags, soda cups and in on-screen advertisements at movie theaters. Later this month, an out-of-home advertising campaign will begin in major cities and include billboards and bus shelters. In early September, NBC will even adopt a portion of Interstate 10 in California to reiterate Mr. Leno’s time slot. Along with the Interstate 10 stunt, NBC will also mark the 10th aisle of about 700 supermarkets in 12 American markets. The network declined to say what it was spending on outreach for “The Jay Leno Show,” but just as NBC is saving in production costs by placing Mr. Leno at 10 p.m., it is saving promotional costs, too. NBC has scheduled a short commercial for “The Jay Leno Show” every day at 10 p.m. Early ads for the show highlighted the crime shows that dominate the 10 p.m. hour and promised “98 percent fewer murders” on Mr. Leno’s show. NBC’s promotional tactics for Mr. Leno involve infiltrating mundane activities and inserting Mr. Leno’s mainstream humor. That’s why the network made a push into movie theaters last weekend, most notably with a two-and-a-half minute segment on National CineMedia’s advertisement reel that runs on 16,000 screens across the country. Later in the month, Mr. Leno’s bits of comedy will also appear on airplanes, at gyms, in elevators and in New York City taxi cabs. McDonald’s, the fast-food restaurant chain, will be advertising its annual Monopoly game by hosting a “$1 Million Dollar Dice Roll” on NBC for four weeks beginning Oct. 6. On weeknights the prize drawing will occur during “The Jay Leno Show.”

A New Print Business Model

Print books are still selling, of course. But are they selling in a rhythm that will be sustainable over the long run? Digital downloads are selling, too, but are they selling fast enough, or well enough, to support the current editorial, sales and promotional infrastructure? Might the selling price of digital content in fact drop to zero? Agents and authors continue to license works to publishers. But they still require significant chunks of working capital at a time when publishers' own working capital is under major stress. In fact, the entire retailing and wholesaling side of the print book supply chain has been pushing inventory risk back onto publishers as fast as mathematically possible. Publisher Richard Nash would like to reconcile the traditional author-agent-publisher-printer-warehouse-wholesaler-retailer-reader supply chain with the potential power of the Internet as a platform. He uses the word “platform” to distinguish from how most publishers currently use the Internet—mostly as a logistics and marketing tool. He proposes a model that to some will seem unconscionably radical, to others unconscionably conservative: a business that properly avails itself of all the tools that now exist to enable the creation of writing and reading communities from which all else emanates—print books, downloads, marketing and publicity, editorial services—and, of course, revenue. The Cursor business model seeks to unite all the various existing revenues in the writing-reading ecosystem, from offering services to aspiring writers far more cheaply than most vendors to finding more ways to get more money to authors faster. It also will create highly sensitive feedback loops that will tell each community's staff what tools and features users want, what books users think the imprint should be publishing, how the imprint could publish better. Cursor is not designed to “save publishing,” but simply to offer the kind of services that readers and writers, established and emerging, want and the Internet enables. Were it not for the power of the Internet, all this talk of the social nature of reading and writing might remain just casual, useful little thought bubbles built around books. But especially in the Web 2.0 incarnation, which focuses on communication and sharing, technology has emphasized a simple truth at the heart of this model: we are what we read, we are what we write, and we organize ourselves around and connect with one another through what we read and write. “This is the foundation on which I hope to build a more robust, dynamic, creative, democratic version of the reader-writer relationship than what I once called publishing,” Nash says.