media Archives - Steve Sammartino

TV Reality Check

Posted on September 9, 2022September 9, 2022 by Steve Sammartino

Who’s the biggest TV star in the world? Anyone older than 25 will probably nominate a TV star from the free-to-air (FTA) TV era. Anyone under the age of 25, that is, born after the modern internet burst onto the scene, will tell you it’s MrBeast – aka Jimmy Donaldson.

MrBeast recently passed a milestone 100 million subscribers on YouTube (now 104m) . In total, his posts have attracted more than 26 billion views and his videos are seen on average anywhere between 50 to 110 million times. To put that in context, the two most-watched shows in TV history (outside of global live events) are:

Mash – the final episode, 105 million viewers and;
Seinfeld – the final episode 76 million viewers

Clearly, it has been a long time since traditional linear TV set any viewership records.

Mr Beast Strategy

MrBeast is now more than an on-screen persona – it’s graduated to a sizeable business. According to Forbes magazine, Donaldson earned $US54 million in revenue last year and now runs a production company with over 50 employees. He has also given away more than $50 million to charity and claims to be YouTube’s biggest philanthropist. To celebrate his 100 millionth subscriber, Donaldson created a video with a hundred of his fans running a modern-day game show, competing to win an island. The production cost alone for this celebration was over $US500,000.

The story of Donaldson’s origin is as surprising as how big he’s become. Ten years ago, Donaldson set himself a clear goal to become famous by earning as many views on YouTube as possible. The ‘how’ of gaining views was less important. Naturally, Donaldson gravitated towards silly stunts and challenges to maximise reach. Some of his early videos included counting to 100,000 (a lengthy 40 hours) and tried spinning a fidget spinner for 24 hours straight. Although his videos have evolved in sophistication of production and concept, this ‘game show’ method has served him well. His key ingredients have become:

Challenges and stunts
Giveaways with often very generous prizes
Celebrity appearances

Consistent with other popular game shows like The New Price is Right, audience participation is a priority. Donaldson creates incentives for viewers to be involved – to appear in videos and compete for exciting prizes, creating a brilliant viral loop growing both views and audience. Donaldson claims to have cracked the code for making viral posts and that once you’ve mastered the art, “you can make unlimited money”. There are many lessons our local media channels could learn from him about generating views, revenue and profit.

Bonus: Follow my TikTok here for biz & life rad advice (almost 1 million views just this month!)

TV Reality Check

The financial struggles of free to air TV channels are well-documented. Network 10 ended up in receivership and was eventually bought out by CBS. Neither Seven West Media nor Nine Entertainment have done much to solidify their long-term future and may struggle.

Basically, all media sells attention. In media circles, this is known as CPM which is ‘cost per thousand’ viewers. Enter, a reality check. FTA TV currently commands an average premium per set of eyeballs of 700 per cent. No, that’s not a typo.

Nestled in the TV that fits in the palm of your hand, social media platforms including Instagram, Facebook and YouTube charge around $A7 for every 1,000 views. In comparison, FTA TV charges $A50 per 1,000 views a mid-rating show, while ratings winners like The Block costs as much as $175 per 1,000 viewers for a 30 second commercial.

The irony is that while most people are peering into their tiny phone screens, that is when these ‘premium-priced’ commercials run on the big TV mounted on the wall. TV commercials are not nearly as targeted as digital advertising is, neither psycho-graphically nor geographically.

Additionally, FTA TV commercials don’t have click-through potential, and disappear into the ether after they run. In contrast, the online variant, while it can be skipped, can continue to live on in the same social channel as a standalone video, receiving organic views and feed a content play for the brands pushing them.

These FTA numbers for reaching people simply can’t and won’t be sustained. If I were to point out a reason why the market still tolerates such an imbalance in CPM on FTV versus digital channels, I’d narrow it down to the senior executives buying the ad spaces. People buying the advertising space for large brands mostly grew up before the internet and bear a legacy mindset that TV is in some way superior.

That said, it won’t be long before a new cohort of CEOs and CMOs arrive and start challenging why they are paying such an exorbitant premium to reach the same people. When that happens, we ought expect FTA TV’s revenue to decline by 80 per cent.

What Free to Air TV Should Do

Like all disrupted businesses, traditional TV is filled with growth opportunities if they’d only embrace them. The first of these should be realising that the world is no longer segmented in 30-minute slots.

The simplicity of online videos running for as long as a few seconds to a few hours is telling. It seems as though the TV stations would rather things be neat, instead of relevant.

They need to lower the barriers to entry on their digital catchup TV. Tuning into catchup TV is not nearly as easy as it should be. It requires registrations and most shows are removed after a few weeks. In what should be a competitive play against YouTube, the on-demand digital platform is treated as a departures lounge for the TV you missed.

In fact, all channels would do well to leave their entire corporate back catalogue of TV shows online forever, share the revenue with existing content owners and even allow it to be mashed up by new content creators. Then they could create new layered versions of what has already been made. This is already happening, but just TikTok and YouTube. It’s not even a secret…. they only need to copy what is happening!

Search for your favourite TV show from the 1980s and you’ll see it published on YouTube with Google collecting the revenue for advertising running before and beside it. Simply embracing long tail content, asynchronous viewing and allowing the audience to upload and re-interpret their content could change Free to Air’s business model dramatically. But it seems they love the business model they had yesterday more than the reality of today.

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Keep Thinking,

Steve.

The Social Media Game Show

Posted on July 21, 2022July 22, 2022 by Steve Sammartino

While undertaking my TikTok experiment, I’ve noticed my feed being filled with ‘Random acts of Kindness’ – and I’m wondering, How random can it be when it is clearly a content play?

Contrived Acts of Kindness

For the uninitiated, these ‘random acts of kindness’ are a bit like a new genre of game show. The acts often include;

Handing bunches of flowers to people then walking off
Giving people money on the street, sometimes thousands of dollars
Paying strangers’ bills in supermarkets, gas stations or shopping centres
Asking people what makes you happy – and then going to buy it for them.
Arriving at homeless encampments and giving goods to the residents
Driving round town looking for people to help …. always with gifts or money

Of course, the camera is never off. The video is often made with someone hiding around the corner, and it’s mostly uploaded without permission. The whole thing is an act, and in my view, a distasteful one. They are turning people’s lives into content. This is what the Attention Economy has created, a world where the only goal is to get views. A world where it matters not what people are watching, just that they are watching.

The ugly reality is that these so called acts of kindness are just a cost of doing business. A small financial outlay that is later offset by monetary gains the channel makes for the creator. In today’s digital age, attention equals money.

If you manage to garner enough eyeballs around what you do – people will pay for access to your audience. It’s old school media, in a micro way.

Fee for Audience

On TikTok the going rates for an audience are quite significant. People’s reach can be accessed for fees based on their level of ‘influence’. Cost per single post below:

Nano: $50–$300 (1-10k followers)
Micro: $300–$1,250 (10-75k followers)
Mid: $1,250–$3,500 (75-250k followers)
Macro: $3,500–$12,000 (250k – 1m followers)
Celebrity: $12,000+ (1m+ celeb status)

Just last week – a famous TikTok-er known as @LifeofHarrison gave what he described as an old lady some flowers by asking her to hold them – and then says have a lovely day and walks off.

This garnered 65 million views with the comments fawning over the act. The lady however, Maree, said she felt dehumanised and said she didn’t like being described by others as an old lady. In an interview on TV @LifOfHarrsion, aka Harrison Pawluk said, “I want my content to make people feel happy….” Interesting that the word ‘content’ was featured in that sentence. Rather than him just wanting to make people feel happy.

A Legal & Ethical Minefield

While it is legal to film someone in a public space, it’s illegal to use people for commercial purposes without their explicit consent. When we record my TV show The Rebound, every person who appears needs to sign a release form. The only exception, is if you’re part of a larger public audience at a place like a football match. It’s another example of technology companies having a different set of rules to traditional media. But we all know, they’re a really just media companies in disguise.

Of course we shouldn’t blame viewers for watching these acts – they just want to see something positive. But we ought also remember that the creators have been influenced by the media landscape they now live in. First we shape our tools, thereafter, they shape us. While I don’t question that most people would be happy to receive something valuable for free, it does seem a little opportunistic and avoids all of that difficult stuff like working on the structural issues to alleviate hardship. I guess real solutions don’t really suit the short video format.

But if we want to teach our kids anything in a surveilled society, it should be that what we do when no one is watching is what really matters.

The only problem, is that the spaces where we are able to do something without anyone watching, are in rapid decline.

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Keep Thinking,

Steve.

Don’t Be Evil? – COVID-19 series

Posted on August 21, 2020August 21, 2020 by Steve Sammartino

Don’t be evil…? To your shareholders, at least.

You may have noticed on the homepages of Google and YouTube this week an announcement claiming that the way you search on Google and use YouTube is at risk. The number of alarmed people who forwarded it to me was astounding. If anything, it highlights the importance of Google’s services to our daily lives, how much people love the products, but above all, how powerful Google actually is. Therein lies the problem.

Like everyone, I use their products all day, every day. They are incredible. As far as tech goes, I love it more than most people and have built an entire career around it. In my view, Google is the most powerful organisation in the world by far. Just think about this for a second:

The only thing you never lie to is your search engine.

Really, think about the implications of that for a few moments. It knows all your habits, locations, ideas, proclivities, and your deepest and darkest secrets. I can promise you that none of your searches are anonymous.

Google (owned by Alphabet) is the fabric that holds together modern society. If this power were to be left unchecked, it wouldn’t end well for anyone. Absolute power never does. So you can regard this post as a quasi public service announcement from the Sammatron.

What happened: The ACCC has put forward a new regulation called the News Media Bargaining Code. This code says that Google and Facebook, who collectively control almost 60% of digital advertising revenue in Australia, will have to negotiate and pay news content creators for their contribution. The reasoning behind the mandatory code is to ensure we have a healthy news media sector and that the financial rewards of creating such journalistic content are not redirected towards the gatekeepers.

How Google responded: This week Google put out an Open Letter to all Australians to scare them into believing this proposal would fundamentally change their services for the worse. Which, quite frankly, was propaganda.

The letter: The appeal from Google Australia’s CEO Mel Silva was placed on the homepages of Google services search and YouTube. This reached 95% of Australian internet users. Google has more reach to Australians than any other media organisation, or commercial entity, in our country’s history. Of course, the irony is that the placement of this call to arms was on the homepages of its key services – an archetypal demonstration of their absolute power. The letter claims that the proposal for Google to pay news content creators is unfair!

The letter is incredibly misleading and in my opinion, deceptive conduct – a view echoed by the ACCC.

Here are my rebuttals to verbatim quotes from Google’s open letter:

“Dramatically worse search results” – Not true. A lie. (News is a tiny percentage of search. In fact, only 20% of Google search terms is new, ie never been searched for before by anyone.
“Data being handed over to big news business” – Not true. A lie. Nowhere in the proposed regulations states that Google is required to hand over user data. By comparison, Google is now valued at $1.3 trillion (AUD), while Australia’s two biggest news organisations have a combined value of only $13 billion (AUD). They are not even 1% of the size of Google. It turns out Google is the big news company trying to trick people into thinking it is a cute little startup. (See financials below.)
“Free services at risk’ – Very unlikely. Google chooses to its own usage policy and decides whether its services are free. Their entire business model is built around data surveillance to sell to advertisers. I’d bet my net worth that this won’t change.
“Artificially inflate news rankings” – Well, it’s their search engine. They control the algorithms to decide their rankings. This is a classic red herring.

Since Covid, the power of big technology firms has only increased. Alphabet’s share price is actually up 50% since April. As I’ve said before, opting out isn’t an option any more.

The world is watching: Google fired such a heavy-handed response because the world is watching. What happens here could influence policy around the world and further focus regulatory scrutiny on the behemoth. This is an important global play for Google, as the issue of dematerialising news resources is being raised in every democracy. Rather than caring about the citizens they purport to serve, they’d rather maximise their short-term profits. We should be very suspicious.

Monopoly power: The real issue of course is that the internet is broken. The web we grew up to love and believed would make the world more equal has become very unequal indeed. It’s essentially become five giant websites with screenshots from the other four, each with monopoly powers in their dominant sectors. Not only are they monopolies, they contribute little to our country as corporate citizens. Google has earned more than $5 billion (AUD) revenue from the Australian market place, yet only contributed $40 million to our tax coffers last year. That’s right, not even 1% of their revenue. A reminder here that the corporate tax rate in this country is 30%. At their global gross margins of 19%, its tax bill should’ve been closer to $1 billion (AUD). That would build a few new hospitals and schools.

Is the ACCC code the right action? I am of the view that the ACCC has got it wrong here. If they believe there has been a monopolistic abuse of power, then they should act to prevent that power. The shape of the Australian news ecosystem, while affected by Google’s revenue redirection, shouldn’t be propped up by transferring money from one behemoth to a select number of local news arms. The real solution should be anti-trust action and other forms of data and algorithm regulation.

Digital sovereignty: Australia lacks sovereignty over the most important technology in the modern era – digital infrastructure. If we want to remain a sovereign nation, then we must hold corporations to account, by having a thriving news sector and not permitting monopolies mislead consumers. We need to get better at ensuring all companies pay their fair share of taxes like we residents do. To go one step further, our country needs to start investing in its own digital infrastructure for key products like search, social, maps and video platforms.

If we don’t own and control the connecting fibre of our modern economy, then we sure as hell should not be afraid of regulating it. If there’s anything this country doesn’t like, it’s a bully – and Google is being one. At times like this, we should never confuse services we like with the behaviour from the companies who provide them. Stand tall and push back. We need you to speak up.

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Keep Thinking,
Steve.

Choose your own Adventure #2 – COVID-19 series

Posted on July 9, 2020July 9, 2020 by Steve Sammartino

As we enter our second lockdown here in Melbourne, Australia, I thought I’d do my second Choose Your Own Adventure blog post. Here are five things:

(1) This week I was on Charlie Pickering’s The Weekly, interviewed by the hilarious Judith Lucy on All Things Future in crazy 2020. Many people have said it was the first time they’ve ever seen me lost for words. Click here to watch (4 min video)

(2) As you go into ‘iso’ hiding from the ‘rona’, get ‘woke’ with your future! On ABC radio this week I talked about how technology influences language and how quickly it is changing – and how changing the way you speak could drastically improve your future. Listen here (11 min audio)

(3) Wow, Tik Tok is so damn entertaining – it is seriously lots of fun. It’s also a terrific way for a foreign government to hoover up all manner of information about its users – much more than we think. For those who haven’t read the terms and conditions (and that’s nearly everyone!), I was interviewed on Channel 7 National News discussing security risks and the emerging Technology Cold War. Watch here (3 min video)

(4) One of my fave blog posts: 20 things in 20 years – lessons I’ve learned since school.

(5) My fave ever chill out song. Give it a try if things are getting tough for you. Click here for secret reveal.

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Keep thinking,

Steve.

Content & distribution always beats resolution

Posted on August 16, 2018August 17, 2018 by Steve Sammartino

This week Australian pay Tv operator Foxtel announced the launch of its IQ4 box. The key selling feature is that it enables 4K resolution of content like sports, documentaries and concerts. An interesting move considering all those around them are growing not based on ‘resolution’, but different business models. The numbers for subscription TV services are already telling this tale with Netflix already well ahead and growing, while Foxtel declines.

Number of Australian subscribers at August 2018 (and % change vs last year):

Netflix 9.8m (+30%)
Foxtel 5.4m (-3%)
Stan 2.0m (+40%)
Youtube Premium 1.0m (+40%)
Fetch 700k (+40%)
Amazon Prime Video 300k (+90%)

When was the last time ‘high resolution’ was the deciding factor to subscribe to any content platform? I can’t remember anyone ever saying;

‘You know, I’d totally sign up to Amazon Prime or Netflix if I could watch it at 4K’.

At best, resolution is a hygiene factor – hardly a reason to buy or switch when it comes to content. Are our eyes really that special?

What is clear though is that there is now a 2 speed economy when it comes to content. It needs to be either all-you-can-eat for one low price (streaming services) or a la carte (such as Apple tv). The mash-up package model is clearly broken.

The overriding point is simple – all screens are now created equal. People care less about how shiny the content looks and more about availability, simplicity and price. This is why iMax theatres are still niche at best. And sport won’t save Foxtel either, as we can expect these two things to happen:

Tech firms like Amazon and Facebook to start hoovering up rights to major global sporting properties. FB already has rights to Major League baseball, La Liga Football in Spain and the World Surf League, to name a few.
Sporting organizations will very soon realise they don’t even need a media partner – they can sell their own advertising and subscriptions directly for more than their broadcast rights deals generate.

While Foxtel have moved a towards streaming, it seems that they still love their historic infrastructure more than the truth of where the market is headed.

When it comes to business strategy in any realm, it pays to be agnostic about the tools and to remember what our audience are really buying.

Why other industries need to call out Facebook’s advertising policy

Posted on October 5, 2017October 6, 2017 by Steve Sammartino

Let’s for a minute imagine these as Corporate Policies:

Car Manufacturer: We’ll take a car off the road if an unsafe model gets out of the factory and is sold, but we can’t promise all our cars are safe until you start driving them. If you see an unsafe car out there, please let us know.

Fast Food Outlet: If our pizza has salmonella or listeria, you can return it, but we can’t promise all our food is safe to eat. If you get sick or know someone who did, please let us know and we’ll take the pizza back.

Packaged Goods Manufacturer: If our shampoo has chemicals that are unsafe and burn your head, we’ll change the formula, but we’re not sure until we sell it if it’s OK. If you see anyone with a burned head, ask them what shampoo they used, and if it’s our brand, we’ll happily take it off the shelf.

This is essentially what Facebook Inc. have just announced as their Global Policy for Advertising. All I’ve done is paraphrase their policy, and changed the product and industry. Here it is below for your reference:

Joel Kaplan – Global Policy VP

“We try to catch content that shouldn’t be on Facebook before it’s even posted, but because this is not always possible, we also take action when people report ads that violate our policy”

Facebook claim it isn’t possible for 2 simple reasons:

Because it isn’t profitable for them to check every advertisement before it goes out.
Because they haven’t been regulated in the same way other media organisations are.

While I understand 2 billion peoples comments can’t be moderated before they’re published, maybe paid advertising on Facebook should be. Facebook at least ought to be held to account financially when their ‘platform’ creates problems for society. Their current MO when anything outside their policy happens is ‘oops, sorry about that’ . They get away with it because society and regulators let them. A good starting point to fix this is to start calling out Facebook for what it actually is – a media company, not a technology business. There is a certain responsibility that goes with being a media company and its resultant influence, yet Facebook continues to flout the responsibility that is incumbent upon such power. To call it a technology company is ridiculous. All companies employ technology – Boeing and Ford have a far greater breadth and use of technology than Facebook, but at least they admit they sell airplanes and cars. Facebook sells advertisements to their audience, not technology – seems like a media company to me.

It’s also worth noting that the update from Facebook policy resulting from controversy surrounding fake ads and alleged Russian influence on the US election didn’t address the problems of false information, only ‘transparency’ of what was published, promoted and who did it. The extreme targeting possible on Facebook is itself one of the problems. Those likely to spot a misleading advertisement are unlikely to see it. In this sense the promise of transparency is a moot point. A further quote from the statement in relation to advertising via Russian accounts below is quite telling:

” All of these ads violated our policies because they came from inauthentic accounts”

Not because the information was misleading? And further on…

“Our ad policies already prohibit shocking content, direct threats and the promotion of the sale or use of weapons.”

Apparently advertising false information is OK? No mention of it anywhere… You can read it for yourself here.

While Facebook promises to create a more open and connected society, it is in reality creating a more silo-ed and disconnected society. When governments first gave out spectrum at the birth of the TV era, it came with the responsibility of providing unbiased news and balanced data on issues affecting society. We didn’t let the idea of innovation or new technology interfere with creating the kind of society we all want to live in.

I think social media is one of the most amazing things to evolve in my lifetime. The power provided through connection and sharing thought has helped me re-invent my career, find like-minds and gain knowledge that just wasn’t available in the mainstream media era. For that I’m grateful.

But it is time that we took its power more seriously. It’s time to add seat belts and brakes to the data vehicles driving our lives and admit that no technology out of control or without failsafes ever benefits society.

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If you liked this post – you’ll dig my new book – The Lessons School Forgot – a manifesto to survive the tech revolution.