No brand winner in Viacom/DirecTV debacle

Tom Dougherty, CEO – Stealing Share

24 July 2012

Viacom looks desperate, with no one the winner

During an almost two-week long blackout, millions of DirecTV customers were unable to watch about a dozen popular Viacom channels, including MTV, Nickelodeon and Comedy Central.

The stand-off between Viacom and DirecTV over fees might have ended last week, but neither brand comes out a winner.

“It did not matter who most pointed the finger, Viacom or DirecTV, because a lapse in service meant the service provider failed.”

viacomDirecTV was already in a tough spot. Few rave about his or her television, Internet, or cell phone provider, which means it is easy to get mad at DirectTV in this instance.

It did not matter who most pointed the finger, Viacom or DirecTV, because a lapse in service meant the service provider failed. The bright spot for DirecTV is that since all providers are viewed negatively, there is no impetus necessarily for viewers to switch. The blackout, however, did help further perpetuate a negative brand perception.

The flip side to that customer perception is the value Viacom placed on its own brand. Owners of content can thank Netflix for spotlighting just how much power they wield. Distribution once was a massive undertaking. Netflix’s DVD service was unmatched because the start-up costs for distribution of that magnitude were prohibitive. Where there was a greater dependency on physical distribution, the changing environment of digital distribution has increased control for those with the content.  I say “increased control” rather than “complete control” because content providers are not yet confident enough in their brand or their content to capitalize.

The great thing about content is that in addition to defining your market it acts as a differentiator. Make great content worth watching and customers have a reason to switch and increase usage. A good example of this is comedian Louis C.K., who avoided traditional distribution channels and sold his latest standup special digitally through his website. His success proves that, if your content is worth consuming, customers will inconvenience themselves in order to get it.

If Apple has taught us anything, it’s that there is a thriving market for simplicity – in usability, design and consumption. If ever there was an industry where simplicity was lacking, it is television. DirecTV and Viacom did little to elevate either of their brands during the recent dust-up and, in the process, demonstrated weaknesses in the system and highlighted change that might be slow but is inevitably coming.

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