Techonomy President Josh Kampel recently sat down with CTO Jeremy Legg of entertainment giant Turner, to talk about how tech’s progress is changing this global company that owns and operates everything from CNN to the Cartoon Network. This interview transcript has been edited for clarity.
Josh Kampel: As we see new platforms and over-the-top services emerge, will content or distribution be more important in the new media landscape? Is it an advantage for Turner that it grew up in linear, broadcast TV?
Jeremy Legg: Many different types of companies are coming into the market. There’s direct-to-consumer OTT services such as DIRECTTV NOW or Sling, which generally involve repackaging linear television networks, putting them on broadband and charging a fee.
However, the underlying business model on the channel selection is generally largely the same.
Then you’ve got folks like Amazon, Apple and Netflix building content, with their own means of distribution to get it into the marketplace. So what happens to companies that historically used content as their differentiator? That’s the challenge for media companies. Content has historically been the differentiator. The good news for us is that we still have an enormous television footprint. And people easily lose sight of the fact that an awful lot of people still consume their content that way.
There’s no question that media companies have to get much better at the technology that underlies how content is delivered. They have to adjust and adapt toward the sort of very good consumer experiences those platform companies have built. Media companies have to figure out economies of scale to deliver content to consumers, by looking at how we build platforms and the consumer experiences that folks enjoy.
Kampel: Obviously the consumer represents one type of customer, but another customer is the brand, the advertiser. Talk about how you can serve both markets.
Legg: That’s a good question. We have historically distributed content through distributors [cable companies]. Digitally, we didn’t instrument our applications and websites to capture levels of data that we needed to truly understand the consumer. Over the last few years, we’ve shifted quite a bit and can now capture television viewing data as well as digital viewing data. We now have a much better understanding of what people actually watch, and just as importantly, what they don’t watch. We now have the ability to create personalized content, personalized feeds, and deliver Spotify-like VOD playlists.
The second part of your question is about building the consumer experience itself, and how that works around a brand. And that depends on the brand. When you’re working in general entertainment, when there’s such a diverse set of constituencies, often times the brand or the show becomes somewhat interchangeable. Whereas a brand like CNN or Bleacher Report or March Madness Live each have a distinct voice. They stand for something.
You have to treat them in different ways. The first piece is you want all brands to have a unique voice. So we’re transitioning our general entertainment brands to have more unique and distinctive voices. You see that across TNT and TBS. But then we have to tailor how we deliver those experiences to consumers. So, as you think about a TNT or a TBS or a Cartoon Network, why do we have a single stream that goes to a consumer if we actually know that consumer doesn’t want to watch what’s on right now?
In some ways the industry perfected the art of sending content to people they don’t want to watch. So if we do know what you want to watch, let’s tailor that experience to you but also keep it relevant to the brand. This is where you get into personalization. In a stream of content, if you know someone only wants one type of show, you give them the option to binge on that show and stand up what is in effect a personal network.
We will link from social media where we are able to target people and get them watching the content in one or two clicks, either by casting out on television or seeing it on a mobile device. We have to be much better about how we deliver those experiences for consumers, but also keep them within the context of the brands we’re trying to promote.
Kempel: So a lot of the technology that you’re building to deliver this personalized experience also benefits the advertisers. Talk about how they fit into the equation.
Legg: There’s the concept of over-stuffing the bird with too many ads, but I think the industry is really largely done with that. What we’re trying to do instead is figure out how do we make the advertising more targeted while reducing the overall ad load and keeping the economic model intact. That means we’re going to have to have very different types of ads than we do today.
It’s not going to be simply stuff more 30 second spots or 15 second spots into an online- or television-based viewing experience. How do we create different types of ad inventory that are less obtrusive? If you have opening intro music for a series, that may be an ad inventory event where you can display different types of content, and there will be other ways to insert ads that deliver value to the advertiser in a targeted way without ruining the consumer experience.
As we look at the types of technology we build and how to deliver those experiences to consumers, we’re trying to take it from their point of view. They have spoken about the types of experiences they like and don’t like and we need to deliver that to them, and then work backwards towards monetization. That’s the inverse of how we thought in the past.
Kampel: How does Turner coexist with and embrace the startup community?
Legg: I’ll give you an example that’s been very successful. We participate in a program called The Bridge, along with Mercedes-Benz and Coca-Cola. It’s a commercialization initiative for tech startups, a bridge between the entrepreneurial community and major global markets. Through this program we get help solving real day-to-day problems within our companies, while the startups get help connecting with well-established global companies.
We focus on Israel in this program. We go to Tel Aviv, meet with dozens of companies and select the ones we want to bring back to the United States. We ask them to solve for a set of use cases and business problems. They then come to the U.S. and we work with them on a commercial basis. We can take equity stakes. We might even purchase them outright if they are willing, and integrate them into our respective businesses. On our side we work to turn their product ideas into enterprise level systems. So a piece of ad technology may get integrated into a broadcast advertising stack, for example.
We teach the startups what commercial scale looks like. They learn about our global brands and work closely with us to help find where products can fit in to help benefit us. As a startup, that’s what you want—more scale, more business, more revenue, and more growth.