This past week, I have felt a bit like Michael Corleone – “every time I think I’m out, they pull me back in,” because I am now caught up in the dispute between DirecTV and Viacom. No, we’re not an agency for either of them, it’s because I have a 7-year old who can no longer watch SpongeBob or Big Time Rush (Nickelodeon). I’m going to skip thoughts about the business aspect and implications of bundling and instead offer an opinion about the handling of the conflict from an agency perspective – specifically, who is winning the fight for hearts and minds?
In this corner – DirecTV.
DirecTV has built a website dedicated to the dispute and are using social media to answer questions and critics. The core of their strategy – cost-savings. I must applaud their strategy – they have wrapped the entire debate of bundling and carriage into a simple “we don’t want you [subscribers] to have to pay more money” campaign – pure genius.
In this corner – Viacom
Viacom is rolling out all of their assets to appeal directly to the consumer. SpongeBob on the street, looking forlorn, asking little children why they don’t love him anymore. Straight to the emotional core of their target audience – also pure genius.
Who wins when the head battles the heart?
On the surface, it seems pretty straightforward – head vs. heart, but the problem is, in my opinion at least, that it isn’t that clear cut. DirecTV is taking the “head” strategy, but I have a couple of issues with the strategy – first, I don’t think I would notice a $x swing on my monthly bill. I think I pay about $150 a month – I would have to look it up – so $140 – $160 isn’t going to trigger an alert in my brain. It might if it hit $200 or so, but it’s like gas prices to me – yes, I am annoyed they are so high, but I’m not (or can’t) quit driving.
Second, the TV I do watch is for emotional purposes – primarily sports. A core strategy for DirecTV is to make money on voluntary purchases – sports packages, pay-per-view events, movies, etc. They [for me at least] recognize that people are not rational when it comes to economics. I will pay a stupid amount of money for the NFL football package, which is dumb because I have season tickets, just so I can watch Chiefs away games. I love football, but if I sat down and really added up the enjoyment I get from Chiefs football, I can ASSURE you it would not exceed the cost of programming. However, factoring in emotion, I’ve got to have my Chiefs. So, emotion does appeal to me.
Viacom is taking the “heart” strategy, but I have issues here as well – first, I don’t watch any Viacom channels. I watch Colbert and Stewart, but online – not on TV. I wouldn’t have noticed these channels were gone if my son hadn’t pointed them out to me, so I don’t have any emotion they can tap. Second, [I read and confirmed this], Viacom numbers are way down. The analyst in me can’t grasp the need to raise prices on something that is failing. It’s like asking people on crappy cellular networks with diminishing coverage to keep paying more for bad service. So, even though I am not directly affected, there is a “head” factor in making a rational decision to support higher prices.
So . . .
The truth is that I find this entire process stupid, and would rather be able to pick shows I want to watch via the interwebs. It may get there eventually, but for now, I recognize the model that exists.
From a business perspective, I think that DirecTV is winning the fight. I have scanned social networks (non scientific studies) and I think that DirecTV has taken a good position with a clean call-to-action. Additionally, my perception is that a large-enough part of their customers aren’t viewers of the Viacom channels anyway. However, in my opinion, the core customers of Viacom are much more vocal via social media. I think it’s because the target audience of MTV and Comedy Central, etc. are way more plugged in than the old people who just want to make sure that Matlock isn’t interrupted.
From a personal perspective, I want to side with DirecTV. I don’t care that the channels are gone and, once I think about it, realize that I don’t want to pay for channels I don’t watch. However, I can’t. I have to side with Viacom. I have a 7-year old. He misses Nickelodeon (well, certain shows / characters on the channels). His frustration with missing shows (especially since Nickelodeon runs new episodes during the summer) is making me frustrated. He has an iPad, but I prefer having him watch TV where I can monitor usage and viewing. The simple math is that his advocacy / emotion for those shows has greater influence on my emotion / desire for him to be happy than the estimated cost of my DirecTV bill. Or, in math terms: SonHappy = DadHappy > $1.60 / per month.
I recognize that this formula works only in this situation. If football was gone – then me VERY unhappy and the number changes a lot. Channels that nobody in my household watches disappear = don’t care. I know that DirecTV is giving the impression that they are “taking a stand” and that may be true, but as a consumer with a lot of choices, I choose to entertain potential cost increases on a case-by-case basis. I recognize that my support for Viacom this time may lead to other cost-increases, but I’ll cross that bridge when I get to it.
For now, knowing who lives in a pineapple under the sea is of paramount concern.
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