Electronic Retailer - May 2012 - 20

FROM THE EXECUTIVE’S DESK

BY TONY BESASIE

DRTV’s ‘Moment of Truth’ Requires HD Programming

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In 2003, A.G. Laffley, then CEO of Procter & Gamble, coined the term “first moment of truth” to crystalize the time and place when the consumer encountered a P&G product at the point of decision at retail. P&G was so committed to this crucial event in the purchase cycle that FMOT became a core strategy and a driving force behind the company’s nine years of growth. The FMOT strategy was designed to present P&G products in the most favorable condition possible to prompt a consumer purchase. P&G took great care to ensure the design and quality of the packaging, messaging and ancillary point-of-purchase materials all worked to showcase the brands at retail when the consumer was making a critical decision. For the long-form DRTV industry, I contend that our FMOT is that period of time when a viewer is exposed to a program and contemplating whether to stay tuned-in or switch to another channel. DRTV marketers clearly understand the importance of presenting their brands in the most compelling manner, which is why they make significant investments in the scripting, construction and production of their shows. I find it puzzling, however, that long-form DRTV programs are broadcast in standard definition even though many of the shows today are produced in high definition. To put it into perspective, it’s the equivalent of P&G putting a color-faded, slightly scratched, lower quality package on the shelf after investing millions of dollars on package design and merchandising. I contacted Adam Carrillo from Script to Screen, who confirmed that 100 percent of the shows they produce are filmed in HD and that it costs no more to shoot in higher resolution. For all intents and purposes, the production industry has migrated to HD and thus is not the obstacle to high quality viewing. Carrillo did mention, however, that there is a slight upcharge for editing HD content, but he believes the larger challenges to airing in HD are the high dub costs and the perception that few stations and networks accept HD formats. Recent studies suggest that the latter is becoming less of an issue. A 2011 report from DG Systems and Kantar Media claims that 82 percent of the major television networks and 70 percent of the national cable networks broadcast in HD. On the local level, 73 percent of TV outlets in the Top 25 markets are equipped to telecast in HD, according to published reports. In addition, Nielsen states that nearly 70 percent of

U.S. households are equipped to watch HD programming. Thus, it appears the media outlets are capable and ready to air HD programming and the viewers are ready to receive it; so where’s the disconnect? Is it possible that the cost to distribute an HD dub to the media outlet isn’t worth the expense? In prior conversations with Andy Donato at Treehouse Media, he confirmed that HD dubs are more costly than SD, but he added that he and others continue to work on developing affordable options to delivery HD-quality infomercials. In the meantime, the industry is faced with the decision to air programming in SD or pay the higher costs for HD distribution. In the aforementioned 2011 study by DG systems and Kantar Media, a compelling case is made for investing in HD now. The study found a decline in viewership due to brands advertising in SD instead of HD. They monitored viewer behavior in more than 100,000 homes using set-top-box data to measure the tune-away rate (percentage of advertising viewership time) of SD versus HD 30-second television commercials. The comparative analysis revealed that HD ads had 18 percent better holding power regardless of the spot’s position in the ad pod. Even more convincing, HD advertisements that held the first position in the pod (the clean lead-in from programming) performed 28 percent better than the SD control. This data is consistent with a survey by Leicthman Research Group that found 76 percent of consumers agree or strongly agree that they “can tell when content that is not HD is shown on an HD channel.” Armed with evidence that HD content drives better viewership, one could argue the long-form DRTV community should champion the HD movement, especially given our dependency on television to generate purchases. To help drive this initiative, in the next several months, Cannella Response Television will launch a series of HD versus SD programming tests and will share the results of our study. Regardless of the outcome, I believe it’s safe to surmise that, within the next five years, technological advancements will make HD long-form distribution affordable. That’s good news for an industry that depends on television for its first moment of truth. Tony Besasie is president of Cannella Response Television.

Armed with evidence that HD content drives better viewership, one could argue the long-form DRTV community should champion the HD movement, especially given our dependency on television to generate purchases.
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Electronic Retailer - May 2012

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