Wednesday, December 09, 2009

In The Shadow Of The Medicis

If you look at the Medicis and the Rothschilds and the banking world today, they have one thing in common: they are global whilst countries act in their own narrow interests. Therefore, bankers threaten to leave for other shores at the hint of taxation, and they already move most of their revenues around the world with impunity (Goldman Sachs, pro rata, pays one tenth of the tax that TV Everywhere pays in the UK. It should be pointed out that pro rata TVE also gives more money to charity). The benefits are huge, and they have any government over a barrel, as today’s pre-budget in the UK makes patently clear. The UK has basically transferred a couple of hundred billion into the bank accounts of a tiny number of people in order to preserve the semblance of financial normality for the rest of the population and asked for half a billion back. What a raw deal for the 'hard working Britons' the politicians pretend to represent.

In reality the world’s leading nations should have acted in concert and got the banks to pay an operational or transactional tax that would act as insurance against any future bail out of their mad excesses. But as current goings on in Copenhagen shows, getting the leading nations to work together is impossible even when all of their interests should be aligned.

The power of the bankers is therefore such that they operate globally with pretty much impunity.

So, how does all of this ranting impact on the internet TV industry ?

The biggest problem facing the internet is, quite ironically, that it is a global medium with local reach. Advertising budgets remain territorially based and therefore revenues are local. Even the most targeted web services will be lucky to attain a 75% local audience – by its nature audiences, expat or otherwise, will be discounted as part of the campaign spend. The wastage is enormous. The leverage is non-existent and the structures, built in the 50s, that power the advertising/media status quo are yet to be challenged in any real way.

The result is that value is destroyed and the industry constantly bids itself down. Lower CPMs may seem to be a result for media agencies, but, in my experience, this inevitably leads to a degradation in audience and delivery.

When will global brands start to operate globally ? When will global agencies use their global reach ?

There are still lessons to be learnt from the Medicis...