Public Service Broadcasting and the Challenges of Social Media

TVNXXX10.1177/1527476414527136Television & New Mediavan Dijck and Poell 527136research-article2014

Special section: Digital Distribution

Television & New Media 2015, Vol. 16(2) 148–164 Making Public Television © The Author(s) 2014 Reprints and permissions: Social? Public Service sagepub.com/journalsPermissions.nav DOI: 10.1177/1527476414527136 Broadcasting and the tvn.sagepub.com Challenges of Social Media

José van Dijck1 and Thomas Poell1

Abstract This article investigates how the rise of social media affects European public service broadcasting (PSB), particularly in the United Kingdom and The Netherlands. We explore the encounter of “social” and “public” on three levels: the level of institution, professional practice, and content. After investigating these three levels, we address the more general question of how public broadcasters are coping with the challenges of social media. How can public television profit from the abilities of social media to engage new young audiences (and makers) without compromising public values? And will PSB be able to extend the creation of public value outside its designated space to social media at large? While the boundaries between public and corporate online space are becoming progressively porous, the meaning of “publicness” is contested and reshaped on the various levels of European public broadcasting.

Keywords social TV, public broadcasting, social media, broadcast regulation, cross-media, public value

Introduction Over the past decade, social media platforms have gradually infiltrated all segments of everyday life—from making friends to debating politics—and have impacted the fabric of social institutions—from law enforcement to journalism. Particularly in the field of television, platforms such as Twitter, Facebook, and YouTube affect both the social practice of television and its cultural form, while also disrupting broadcaster’s conventional production and distribution logistics (Williams 1974). Television around

1University of Amsterdam, The Netherlands Corresponding Author: José van Dijck, Department of Media Studies, University of Amsterdam, Turdraagsterpad 9, 1012 XT Amsterdam, The Netherlands. Email: [email protected]

Downloaded from http://www.elearnica.irDownloaded from tvn.sagepub.com by guest on January 17, 2015 van Dijck and Poell 149 the globe is gradually integrating social media logic in its already established mass media logic (Altheide and Snow 1979; Van Dijck and Poell, 2013). Tweets, likes, and favorites are becoming a vital part of television’s sound bite and celebrity culture, while the tube itself gets extended by second screen applications. Attaching “social” as an adjective to television increasingly means braiding the conversational and creative strengths of networked platforms with the mass entertainment and audience engagement abilities of broadcast networks. “Social TV,” though still in its early stages, is evidently changing commercial broadcasting; it also has visible impact on its public counterpart. This article investigates how the rise of social media has affected European public service broadcasting (PSB), particularly in the United Kingdom and The Netherlands. We will explore the encounter of “social” and “public” on three levels: at the level of institutions, professional practices, and content. The first level, explored in the next section, outlines how national organizations for public broadcasting have faced the rapid emergence of major social platforms with a mixture of bliss and reserve. PSB understandably wanted to profit from the new opportunities offered by social media to promote user participation and encourage independent audiovisual creations, but the increasing commercialization of social network services such as YouTube, Facebook, and Twitter threatened to compromise public value. As we will argue in the second section, public service broadcasters in response tried to balance off commercial pressure of social media by redefining public value, not only by setting new standards for professional practices but also by producing its own version of “public” social television content. The third section illustrates how various national public broadcasters started experimenting with “public social TV” experiments to attract a new generation of viewers and appeal to a different type of producer. We will examine in more detail two such experiments geared specifically toward an audience of young adults: Up For Hire, broadcast by the BBC (2011), and Upload TV (2013), produced by the Dutch VPRO. After investigating the three levels of impact, we want to relate these insights to the more reflective question of how public television can profit from the abilities of social media to engage new audiences and makers without compromising public values. A major challenge for public television is especially to engage teens and young adults, the future citizens, who increasingly spend their time on social platforms. We will argue that it is extremely important for PSB to help restyle the meaning of “public” vis-à-vis “social” in an emerging ecosystem of connective media that is overwhelmingly corporate. As PSB inevitably adapts and internalizes social media mechanisms, the question whether or not PSB should extend the creation of public value outside its designated space becomes newly relevant. While the boundaries between public and corporate online space are becoming progressively porous, the meaning of “publicness” is contested and reshaped on the various levels—institutional, professional, and content—of European public broadcasting.

PSB and the Rise of Social Media PSB’s mission has always been to produce television as a form of speaking to, and engaging with, viewers as citizens. The institutional space granted to public

Downloaded from tvn.sagepub.com by guest on January 17, 2015 150 Television & New Media 16(2) broadcasting systems in most European countries came with the obligation to inform, educate, and entertain diverse audiences and involve them in public debates. Public television prioritized participation over consumption long before the emergence of Web 2.0. In recent years, social media—defined by Kaplan and Haenlein (2010) as a group of Web 2.0 platforms that allow for the creation and exchange of user-generated content (UGC)—have started to contest PSB’s “exclusive” right to address the viewer as a social participant. The issue raised in this section is as follows: How did public television respond to social media’s challenges to its core institutional task? To answer this question, we first need to situate PSB’s confrontation with social media against the historical background of public broadcasters’ late-twentieth century’s struggle with commercial broadcasting, which put an end to a long period of relatively privileged programming space (Syvertsen 2003). After the deregulation of television markets in the 1980s, commercial broadcasters quickly gained market shares in the European mediascape. A number of European public broadcasters responded to this threat by imitating successful commercial tactics and formats, such as shows, quizzes, reality TV, and talent contests (Gripsrud and Weibull 2010; Wieten et al. 2000). Commercial broadcasters complained that public broadcasters were competing unfairly through programming content void of “public value.” As Syvertsen (2003, 170) poignantly summed up PSB’s dilemma after the first round of battle with free-market regulation, “The more successful public broadcasters become in competing with commercial companies, the more they will be under fire from competitors that claim that they are abusing their position and that their privileges should be termi- nated once and for all.” Indeed, the comfortable presence of a privileged public space that heretofore formed an intrinsic justification of public value was no longer self- evident; it left PSB shaken on its foundations. At the end of the millennium, the institutional severance of public space from audience engagement and public value was a fact even before the next confrontation had begun (Gripsrud 2010). That next round in the battle over public value and participation came sooner rather than later, as the early 2000s gave rise to a multitude of interactive platforms. Early manifestations were trumpeted in terms of their democratizing potential; the promises of online services for UGC and unlimited two-way communication understandably appealed to public broadcasters as the technological empowerment of users and citizens (Benkler 2006; Jenkins 2006). Social networking services (SNS) such as Facebook and Twitter and UGC services such as YouTube and Flickr offered everyone the ability to chat, text, blog, send pictures, and distribute short videos in real time. Platforms gave users unimpeded and free access to the online production and distribution of audiovisual and textual content (Van Dijck, 2013; Hannaa et al. 2011). To public broadcasters, social media initially appeared to have Janus-faced qualities: while some were suspicious of any medium that defined citizens as media professionals, others regarded the new platforms as like-minded allies in their focus on user engagement. This duality of suspicion and attraction would mark PSB’s institutional embrace of social media for the years to come. While still in their developing stages, most social platforms lacked distinct business models; showing few signs of commercial exploitation except for a few banner ads,

Downloaded from tvn.sagepub.com by guest on January 17, 2015 van Dijck and Poell 151 they were regarded predominantly as “friends sites” and facilitators—helpful stimu- lants for users’ engagement and creative “produsage” (Bruns 2008, 2012; Shirky 2008). Social network sites commonly promoted their services as neutral “utilities,” akin to water pipes or electricity, even when their owners began to metamorphose into online conglomerates hosting hundreds of commercial applications. Facebook and YouTube, as many public broadcasters saw it, constituted a new public square where (public) mass media simply had to be present to join citizens’ attempts to reinvent media space. However, the equations of “social” to “neutral” and of “user-generated” to “public” turned out to be tricky when public broadcasters started testing the efficacy of social media after 2005. These media soon developed into commercially exploited data-driven platforms. Consequently, the ecosystem of connective media quickly began to be dominated by a handful of large global networks—Facebook, YouTube (bought by Google), LinkedIn, and Twitter featuring prominently among them. After a decade of exponen- tial and unprecedented growth, there is little, if any, public space left in the world of networked platforms (Lovink 2012; Vaidhyanathan 2011). In sharp contrast to the gen- erous allocation of airwaves and funding to public broadcasters in the twentieth century, states never considered Web 2.0 as needing a designated space for independent, nonprofit content creation. At best, net neutrality—a fiercely embattled concept to this very day—allowed the coexistence of a variety of players. Several large social media corporations (LinkedIn, Facebook, Twitter) followed Google in going “public” on the stock exchange. The concept of “social” in social media moved away from “public” as in “public broadcasting” and aligned itself with “public” as in “public company.” Notwithstanding a few exceptions, most notably Wikipedia, the space for Web 2.0 platforms (SNS and UGC) is now entirely commercial (Van Dijck, 2013). Throughout the first decade of the twenty-first century, European public broadcasting services retained their privileged institutional positions, in spite of neoliberal attacks on their status aparte and substantial budget cuts. Expansion of PSB’s position across online platforms was all but self-evident, in part due to the fact that the Internet has become a global communication system that is fairly impervious to national regulation. In some countries, such as The Netherlands, public broadcasters’ abilities to expand their public services online are also in part limited by legal constraints: the law prohibits unfair (subsidized) competition with corporate occupants of this space to secure a level playing field. While public space in Web 2.0 is increasingly scarce, public broadcasters have to cope with corporate social media invading their own public turf, not in the least because the power of social media logic impacts all kinds of institutions besides broadcasting (Van Dijck and Poell 2013). This logic, pushing the principles of programmabil- ity, popularity, connectivity, and datafication onto all sectors of public life and sociality, made it virtually impossible to keep social media’s intrinsic commercial forces at bay. Besides, avoiding Twitter or YouTube entirely on account of their proprietary algo- rithms and business models would be disastrous because it would surely result in the loss of particularly a younger generation of viewers. Even worse than losing those viewers, PSB would arguably risk deterring a young generation of makers, many of whom are attracted by the innovative potential of multi- platform production and distribution. After all, the quick rise of a new Internet space

Downloaded from tvn.sagepub.com by guest on January 17, 2015 152 Television & New Media 16(2) promised to be a boon for independent producers for whom “television’s perceived weakness in the multichannel transition opened a rhetorical and economic space for entrepreneurs eager to curate and distribute web programs” (Christian 2012b, 341). For producers wanting to develop a niche outside of conventional public broadcasters and independent from commercial social platforms, the years 2008 to 2013 mark a period of experimentation. The promise of new multi-platform, cross-media modes of production stimulated a host of young entrepreneurs, both in the United Kingdom and other European countries, to break away from institutional distribution channels, instead relying on UGC and crowd funding (Bennett et al. 2013; Christian 2012a). Unfortunately, the ecosystem of connective media leaves little or no space for non- commercial, nonprofit, or even public platforms; commercial operators such as YouTube and Twitter offer promising propositions to independent makers, specifically the ability to distribute their content globally and to monetize their programs through targeted advertising (May, 2010). Cross-media producers, as it turns out, are caught up in the paradox of exploring a new public space and achieving professional growth in a corporately ruled “social” online environment. However, without the institutional support of either public or commercial distribution systems, the viability of multi-platform “indies” operating from a public mind-set remains questionable (Chitty 2013). We will return to this paradox in the last section; first, we will focus on how social media tools and platforms are becoming integrated in the professional practices and content of European public broadcasters.

Incorporating Social Media in PSBs Professional Practices As already mentioned, public broadcasters welcomed the new Web 2.0 platforms that seemingly subscribed to the same principles of audience engagement as citizens. In 2004, the BBC issued a policy report embracing digitization for public broadcasting as a means to encourage co-creation of content and the growing involvement of users (BBC Report 2004). Online participation was considered a key-strategy for public broadcasters in an attempt to regain their position in national arenas (Enli 2008). The BBC enthusiastically endorsed the possibility of including more UGC in their programming. In 2005, BBC News started the “Hub,” inviting citizens to send them audiovisual footage as well as commentary, which they did in large numbers (Wardle and Williams 2010). Although Web 2.0 platforms helped spike the contribution of digital audience material, Wardle and Williams conclude it did not substantially change the editorial practices or values of BBC News producers over the years. PSB employees were often among the early adopters of social media, integrating Facebook and Twitter in their professional routines and judgments as editors or producers of media content. As Norwegian media scholar Hallvard Moe (2013, 118) has meticulously inventoried for the Scandinavian countries, public broadcasters resorted en masse to Facebook and YouTube to reach their audiences, and “social networking sites were starting to get more seamlessly integrated with the remaining public service content.” In 2010, when public broadcasting and social media increasingly became uneasy bedfellows due to the latter’s growing commercial ambitions, the Swedish

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Media Authority intervened in PSB’s incorporation of social network sites. The regu- lator argued that Facebook and Twitter are commercial sites rather than public squares where journalists need to be present. PSB employees, both in Norway and in Sweden, entered a new stage of guarded social media use. By 2012, Facebook buttons, Twitter logos, and YouTube extensions had been removed from the broadcast organizations’ sites and, according to Moe, a revised set of internal guidelines regarding social media use for employees was put into place. A similar dilemma of PSBs wrestling with the incorporation of social media in jour- nalistic and television production practices can be witnessed in other European countries. The BBC gradually became more cautious in its social media use over the years. In 2010, it first implemented a set of “social network guidelines” that helped employees walk the tightrope between public BBC content and Facebook or Twitter’s commercial intentions. These guidelines were carefully crafted and regularly updated to underwrite the powerful positive amenities of social media in general but alerted professionals to the commercial mechanisms embedded in these tools (BBC. “Social Networking, Microblogs and Other Third Party Websites: BBC Use Guidance in Full 2013). The BBC guidelines divulge the pervasive influence social media have on the professional values of producers, editors, and journalists working in the public realm. Not surprisingly, the guidelines pay ample attention to the BBC as a brand—a beholder of public values—instructing its employees to use BBC’s own tools whenever they can. If they nevertheless have to resort to social media (e.g., using Twitter because the BBC does not have its own microblogging platform), staffers are warned for the technical and commercial conditions inscribed in “following,” “trending,” or “retweeting” buttons. For instance, staffers are not supposed to simply retweet a message on Twitter without adding additional comments because this may be understood as endorsing someone else’s message. Another guideline welcomes social media’s ability to support communities, but as turns out, the word “community” carries a different meaning on social media platforms than it does in the context of public television:

We should take care not to give users the impression that we are interested in setting up a fully interactive profile or page if that page is then neglected or abandoned after it has achieved a one-off short term purpose. This is particularly true if a community of interest has formed around the page or profile. It may be possible to hand a limited-life BBC page or profile over to the community which has grown around it, after a broadcast-led engagement has come to an end. This needs thinking about before the page is created. (BBC. “Social Networking, Microblogs and Other Third Party Websites: BBC Use Guidance in Full)

In contrast to YouTube or Twitter, where “communities” are typically fan pages or public relations pages that are as easily started as they are abandoned, the BBC protects the public notion of community by applying this term only to groups it serves in relation to certain programs and which are durable rather than evanescent.

In The Netherlands, the wager between public broadcasters and social media is reflected in public stations’ weighing social media’s potential for audience engagement against the commercial intentions and technical interventions that are incompatible with public values.1 Google’s YouTube is considered the most cannibalistic of all

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UGC platforms, because the platform tends to “re-brand” public audiovisual content on its own terms. In the wake of the BBC guidelines, there is a growing consensus among Dutch and other European public broadcasters that a maximum of five minutes of any PSB program can be streamed on YouTube, on the condition that the snippet is clearly branded and linked back to public channels for at least a year after the broadcast. The same rule applies with regard to audiovisual contents streamed on Twitter and Facebook. In contrast to the BBC, Dutch public stations have not yet issued strict guidelines for their employees in terms of Twitter’s and Facebook’s editorial use. In sum, it is undeniable that YouTube, Twitter, and Facebook have genuinely impacted editorial and other professional practices and standards at European PSBs. The dual attraction–suspicion attitude toward social media as public platforms has resulted in a cautionary approach toward their monetizing intentions, varying from an outright ban on “social buttons” on PSB platforms to professional sets of guidelines on how to use them responsibly. The struggle between “social” and “public” did not only take place at the institutional and professional levels but also played out at the level of content. As said before, social media not only affected PSB stations’ abilities to lure young generations of viewers to the television set but also to attract a demographic of young makers. The next section examines how public broadcasters experimented with incorporating elements of social TV into public broadcast formats to engage young audiences as well as to allow young makers a “public” space to experiment with the “social.”

When Public Meets Social: Experiments in Television Content Social media have introduced new formats and aesthetics, which are gradually min- gling with forms of mass media content (Müller 2009; Peters and Seiers 2009). Formats culled from social media are typically programmed across platforms where they combine short texts, video-fragments, images, and audio. They tend to privilege brief forms and ephemeral links: tweets (140 characters), snippets (two- to three- minute videos on average), “likes” (intuitive evaluations), and snapshots (casual images). These innovative cultural forms appear a good fit with formats typically produced by commercial mass media; for instance, live talent contests on television often include short video clips and increasingly involve viewers through Twitter voting and online conversations with fans via second screen applications. But what happens when these popular social media forms are integrated in public television programs? The appeal of these formats stimulated some European public broadcasters to experiment with their own public version of “social TV.” We will describe two such experiments— one produced by the BBC in the United Kingdom and another by the VPRO in The Netherlands—and will explore how both programs attempt to balance “social” with “public.” These two examples are illustrative of public service programs experimenting with new forms and techniques inspired by social media. In 2011, the BBC launched Up for Hire, a television format that explicitly incorporated social media elements. Up for Hire was a live event addressing one of the biggest social issues tormenting the U.K. economy: youth unemployment. Featuring five live

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TV shows within one week, the event concomitantly played out on BBC3, Radio 1, special blogs, a Facebook page, and a live Twitter feed.2 During live studio debates, television hosts interacted with the in-studio audience and people at home, trying to fuel a conversation about opportunities and challenges for young people entering a competitive job market. Four young recruits competed for real jobs—the reward for winning the shows’ contest element. Each of the five shows focused on a specific theme, such as starting your own business and finding a job with no prior experience. Raising questions such as “Does business take young people seriously?” and “Is per- sonality more important than qualifications?” the audience was drawn into the conversation. During the five broadcasts, studio audience members were also invited to contribute their views. Most elements of this format had been tested out in live shows over the years. The confrontation between social media elements and mass media format played out in various ways. Interspersed with studio conversations and contest format were video clips—also accessible through the site—featuring advice from industry experts and celebrities on how to boost your job seeking skills. Another element was the inclu- sion of viewers’ voices through a live tweet stream, featured on a big screen behind the studio hosts, who occasionally read some tweets aloud. These comments often served as counterpoints to the many positive stories brought up by youngsters in the studio. For instance, live stories of successful young entrepreneurs were alternated by tweets such as “I would love to go out working for myself but as a single parent I feel it would be too big a risk.” The tweet stream, even though presented in real time as a seemingly random series of comments, was carefully edited to offer only counter-voices in line with the encouraging tone of the program—not too critical, never outrageous or angry, and if desperate, only mildly so. Clearly, the taming of the tweet stream signifies the BBC’s prioritizing of its own editorial logic over Twitter’s algorithmic logic, stressing the broadcasters’ public mission while adopting social media’s form. We can also witness the clash between social media’s form and public television’s content in Up for Hire’s attempt to reconcile the popularity principle ingrained in Facebook’s “liking” and YouTube’s “favoriting” buttons with the BBC’s mission to address serious public issues. Indeed, the popular format uncomfortably fitted with the program’s focus on youth employment. Some critics found fault with the format and accused the BBC of sensationalism, exposing struggling job seekers to the vagaries of public voting. To the charge of taking advantage of jobless youngsters, the BBC retorted that Up for Hire was a “documentary” rather than a contest and that the recruits in the program were prudently guided and counseled, much in line with their public responsibility (Daily Mail Online 2011). Inevitably, the mixture of social media format and public television content forced the BBC to make choices regarding how their production values extended to online services. For instance, Up for Hire was supported by several second screen applications, such as a website featuring nine short “how to find yourself a job” video clips. These videos were produced by BBC Learning and embedded in a proper BBC context rather than distributed through YouTube. In addition, the BBC also collaborated with Lab UK to create the Get Yourself Hired Test for the Up for Hire website. In

Downloaded from tvn.sagepub.com by guest on January 17, 2015 156 Television & New Media 16(2) accordance with the BBC guidelines, as discussed in the previous section, this website has been up for several years and is proof of the station’s commitment to building and maintaining relationships with the community generated by the program. The BBC’s efforts to combine a multi-platform, user-centered format with the editorial judgments of public television resulted in a hybrid, experimental form. It is precisely this contentious mixture of “public” and “social” elements that also surfaces in the Dutch example. In the spring of 2013, public broadcaster VPRO aired four live editions of the experimental show Upload TV.3 The purpose of the four programs was to familiarize the television audience with the finest selection of web-based videos and to promote user- generated audiovisual productions as a new cultural form. Much like BBC’s Up for Hire, the format tried to combine features of social media—Twitter feeds, showing uploaded content from viewers, live chats via Google Hangout—with typical live television ingredients, such as conversations with studio guests, contest and game elements, as well as prerecorded videos featuring interviews with prominent YouTube stars. In contrast to the BBC example, Upload TV focused particularly on producers of cross-media content as to inspire and attract a young generation of makers. In an attempt to reconcile “social” and “public” ingredients, Upload TV paired off instances of commercially successful social media stars with examples of citizen participation. For instance, an eighteen-year-old student (“Fitness Jerome”) explained in the first program how he successfully monetizes the exercise videos he regularly posts on YouTube. A topic more amenable to the goals of public broadcasting was an interview with one of the founders of Moroccan-Muslim TV, who boasted their community-based channel to attract almost one million monthly viewers. The careful mix of “social” and “public” content choices was mirrored in the program’s blend of format elements. Two young studio hosts alternately interviewed the nation’s favorite blog- gers and prominent videomakers—a format typical of a television talk show. However, a “social” element was inserted into this conventional TV-form through a wall of screens in the studio, each screen featuring an active “uploader” with “big screen ambitions”—whether making it in Hollywood or appearing on Dutch television. Through online voting, active viewers decided which uploader would become the next sidekick in the program. Unlike the BBC example, the Dutch program Upload TV explicitly addressed the differences between mass media’s and social media’s clashing production styles and logics. An independent producer of online content, who once was a freelance television producer, explained in Upload TV how he took refuge to online cross-media productions after his work had been repeatedly turned down by (public and commercial) broadcasters. He articulated his plea for independence and creative autonomy launching provocative statements such as “We no longer trust the professional,” “No more TV bosses,” and “Internet makers need to take over TV.” Ironically, his claim that a young generation of video adepts turns away from television because TV is unsuitable for cross-media production is undermined by his very need for television to propagate this point. Along the same lines, several independent online producers used the opportunity offered by this program to advertise their search for sponsors. They emphasized the Internet’s possibilities for crowd funding, while downplaying (public) television’s

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ability to play a meaningful role in the creation of multi-platform content. As one interviewee states, “The old TV is dying. I want to decide for myself what I produce and it is up to the viewers to judge me.” In more than one respect, the experiment to combine social media with public television results in hybrid content. It is therefore no surprise that Upload TV harvested both criticism and praise from reviewers and viewers. Some lauded the experiment for its courage to promote entrepreneurship in video production and for stimulating young people to make their own content. Others loathed the VPRO’s attempts to package television content in a popular “social media” format. The format itself, they argued, prohibits serious reflection, rendering Upload TV into a YouTube sales pitch for the most popular videos (Bakker 2013). Yet others alleged that many questions that would have made this topic interesting for television viewers remained unasked; and for public television, the popularity of YouTube stars is simply not enough to warrant serious public television treatment (Beerekamp 2013). While the Dutch VPRO struggled to tailor social media formats to make them fit the public value framework, they heavily relied on platforms such as YouTube and Twitter for promoting its content; some critics even called Upload TV a “YouTube adverto- rial”—implicitly critiquing its commercial overtures. Part of the problem is obviously the mixture of an older generation’s expectations about public television’s content and social media’s appeal to a young generation of makers and viewers. On the level of content, the two PSB experiments show that there is a perceived tension between what ingredients of social media fit in with “public social TV.” As explained in the previous sections, public broadcasters struggle with a meaningful incorporation of social platforms into their institutional mission and daily practices as well as with the integration of social media elements into television content. To avoid “public social TV” turning into an amplifier for YouTube or Twitter, PSBs are obviously challenged to rearticulate the adjective “public” as a self-evident set of values; these values were traditionally carried by its makers and viewers, but appear increasingly at odds with those of a new generation growing up in a media landscape dominated by social media and its pervasive logic—a landscape where public television has lost its privileged niche.

Redefining “Publicness” in a Social Media Environment If we look at the current predicament of European broadcasters trying to redefine their position in the larger ecosystem of connective media—an ecosystem comprising everything from conventional mass media to social media, and from commercial television to alternative websites—two questions need to be answered. First, how may public television engage with social media and use their tools without compromising PSB values? Second, and perhaps more poignantly, what happens to public value outside the designated space of public television, in a cross-media environment where boundaries are porous? Now that the Internet has evolved into a connective media landscape almost entirely dominated by American companies, it becomes more urgent to identify “public value” outside the self-legitimizing boundaries of PSB. If European broadcasters want to sustain a meaningful proposition of public value, they need to

Downloaded from tvn.sagepub.com by guest on January 17, 2015 158 Television & New Media 16(2) look into effective ways to make it spreadable outside its own safe harbor. Both questions redress the issue of public value at the institutional level as well as at the levels of professional practice and content. To start with the former question, the previous sections have tried to explain how PSBs are tackling the dilemma of deploying social media’s powerful tools to reach and engage young audiences without compromising their intrinsic nonprofit and participatory principles. There is no single recipe for proper social media use as each national PSB regulates the professional practices of its producers and editors differently. With regard to content, the examples from Britain (Up for Hire) and The Netherlands (Upload TV) demonstrate the delicate balancing act involved in integrating platforms such as YouTube and Twitter as well as social-media-inspired forms and styles into a justifiable public television program. However awkward the hybrid results, these two experiments offer a poignant window on the dilemmas faced by public television’s limitations vis-à- vis the incorporation of networked platforms. It is only through struggles with guidelines and content experiments that channels may find out to what extent public values can be reconciled with the amenities of social media. Of course, these two examples are mere illustrations. More experimental formats produced in various European countries could be compared and evaluated to find out how social media may be deployed to strengthen PSB’s mission and yet appeal to a generation with a cross-media mind-set that is basically agnostic to its (public or commercial) context (Murphy, 2011). The boundaries between these contexts have become increasingly permeable as a decreas- ing number of young viewers have no more historical framework for understanding the distinction between public and commercial in spatial terms (Lunt 2009). In the face of this growing contextual agnosticism, the second question may become more urgent: What happens to public value outside the designated space of PSB, in a multi-platform environment? There are several possible ways to address the issue of public value at the institutional and professional level, and each answer is colored by ideological as well as pragmatic principles (Hawkins, 2013; Burns and Hawkins, 2013). One line of argument proposes to change “public service broadcasting” (PSB) into “public service media” (PSM), underscoring the importance of extending public services beyond radio and television to encompass the full specter of the Internet. As some argue, the Internet can be employed within a public service environment to involve and activate citizens, while making sure that core public service values of deliberation, reciprocity, and free and universal access are realized (Coleman 2004; Lowe and Bardoel 2007; Moe 2008, 2010; Murdock 2005). A more radical proposal to extend PSB into PSM comes from Australian-American media theorist Mark Andrejevic (2013, 123) who argues that the public sector needs to broaden the scope “beyond content production and distribution to include social media, search, and other information-sorting and communication utilities.” He urges the public sector to invest in an alternative media-ecosystem by building upon existing initiatives and create connections between “media-centered domains that serve the public interest: public service broadcasting, libraries, community centers, public museums and so on” (Andrejevic 2013, 131). In other words, expanding PSB across various established

Downloaded from tvn.sagepub.com by guest on January 17, 2015 van Dijck and Poell 159 institutional domains and organizations should help safeguard the standards of public value—an ambition that has been explored in a BBC policy document (BBC Trust 2011). Other scholars have been skeptical of the possibility to reform the public service system as a safeguarded institution. Elizabeth Jacka (2003, 188), for example, claimed, “Positions that give [PSB] an automatically privileged position with respect to quality, democracy, and citizenship can no longer be sustained.” Other skeptics warn that tax- funded media, just like subscription-based legacy media, will face hardships in a media world saturated by “free” or “freemium” business models (Newman 2012). Besides the business model of exchanging data for free services (e.g., Facebook and Twitter) and data-driven advertising platforms (e.g., YouTube), we have witnessed the surge of all-you-can-view experiences offered for a low monthly fee (e.g., Netflix). In addition, it is not unthinkable that future budget cuts warranted by long-term government overspending leave the entire public sector permanently underfunded (Collins 2011). Most scholars agree that public broadcasting requires new forms of justification, not simply to save PSB as a public institution but to educate a generation growing up in a global multi-platform world—a world where the institutional providence of much content is often vague—about the meaning of “publicness.” As stated above, the current media system has rendered boundaries between institutional spaces even more porous than before. Media organizations can decreasingly be divided into clear-cut private, public, or corporate enterprises. And while all media users and producers (not just professionals) are now part of a global information and communication exchange, most of us are still mired in dichotomous thinking: public versus commercial, independent versus advertising driven, quality content versus entertainment value. Therefore, it may be necessary to strip down the institutional concept of public broadcasting to its core “naked” public value. What exactly do we mean by public value and how can it be produced outside a designated space? Here we would like to highlight the six core values of PSM, as defined by the European Broadcasting Union (EBU 2012): universality, independence, excellence, diversity, accountability, and innovation. “Universality” refers to the need to address issues that are both locally and globally relevant. “Independence” means impartiality from commerce, government, and specific audience demands. “Excellence” stands for standards in quality content and expertise. “Diversity” anchors the principles of democratic representation and equal opportunities for all civic groups to express themselves. “Accountability” obviously denotes a high level of trust in the accuracy and relevance of information. “Innovation” entails a pledge to the exploration of new technological, aesthetic, and cultural forms. To this set of values, we would like to add “not-for- profit,” which refers to using surplus revenues toward achieving its public goals rather than distributing them as profit or dividends. To ensure that these seven core values affect public communication at large, all of them should be produced inside as well as outside the institution of public broadcasting. So how can public value be produced outside a designated PSB space? It should be noted that the notion of public value or “publicness” resounds powerfully with individual producers who, as we noticed in the third section, are driven by the prospect of

Downloaded from tvn.sagepub.com by guest on January 17, 2015 160 Television & New Media 16(2) working outside the channels of professional media organizations (Couldry 2009). A number of start-ups—not just civic organizations but also small companies—are currently developing new online spaces where they try to create public value content that is produced independent from audience ratings, television channels, and advertisers, and which is produced at a (minimal) profit. Media scholars Bennett and Medrado (2013) inventoried British organizations that produce content at a profit without compromising public service value. They explore two examples of multi-platform producers (Keo and Maverick) that manage to integrate television and digital platforms into cross-media content (Bechmann, 2012). In line with the British examples, The Netherlands counts several start-ups aimed at the creation of public value content, including Fast Moving Targets, Submarine, Seven Digits, and Ximon. These companies are either privately funded or organized as nonprofits, but they all aim at producing and distributing content with a public value mind-set. It is important for public broadcasters to keep up its role as facilitator and promoter of cross-media content, even if, as some researchers have pointed out, “increasing competition and diminish- ing security of PSB funding may reduce the commitment of independents to producing content with PSB characteristics” (Bennett et al. 2013, 111). The production of public service content outside PSB proper is not novel at all, as independent production firms have produced content for public broadcasters for many years. European public broadcasters commonly acquire their content from three main sources: they either produce content themselves (in house), they outsource production to (commercial) companies, or they buy content from foreign producers (commercial or other public service broadcasters). Hence, PSBs have historically not only played a role as creators of public programs but also as promoters and facilitators of public value outside their institutional space. If expansion is impeded, it may be a good idea to start spreading public value beyond PSB compounds. The power of “spreadable media,” as Jenkins et al. (2013) called them, lies in their ability to promote audience engagement and push public value content through the transnational flows of media circulation. The challenge in this new online environment is to develop and nurture, through financial incentives and institutional support, opportunities for producing and distributing content informed by key public values. Such productions can involve public broadcasters and independent producers as well as commercial social platforms. Of course, the “spreadability” of content never guarantees a neutral transmission of public value because the ecosystem as a whole is principally inflected by corporate and algorithmic mechanisms. But even if the export of public values uncomfortably fits corporate infrastructures, it is essential to keep testing its limits and negotiate the very definition of what counts as public in an environment increasingly shaped by social media logic. While the future of PSM need not depend on the survival of public broadcasting service as a content-producing institution, it is unlikely that the conventional role and functions of PSB will disappear from the radar of European policy-makers any time soon (Debrett 2010; Hendy 2013; Kackman et al. 2011). Nevertheless, it goes without saying that in the current neoliberal political climate—aggravated by a sustained period of economic distress—it is essential to discover ways of promoting public

Downloaded from tvn.sagepub.com by guest on January 17, 2015 van Dijck and Poell 161 value beyond traditional confinements. These shifts from PSB to PSM, from public space to public value, and from content production to content selection and distribution require an international dialogue between creative producers, policy-makers, and academics to develop new perspectives on public value and on the technologies and practices through which such values should be created and facilitated. Supported by the EBU, national PSBs have to face these profound challenges, perhaps at the expense of their current institutional status, but they may come out of this process more robust and more “public” than before.

Declaration of Conflicting Interests The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding The authors received no financial support for the research, authorship, and/or publication of this article.

Notes 1. Personal communication with Eric van Heeswijk, head digital production for the Dutch public broadcaster VPRO (Vrijzinnig Protestantse Radio Omroep). The Dutch public broadcast system consists of several different broadcasters, of which VPRO is one. The combined Dutch public broadcasters are currently negotiating with their European coun- terparts in the European Broadcast Union (EBU) how to align professional practices and institutional guidelines. 2. Up for Hire was broadcast from October 17 to 20, 2011, on BBC3, the channel targeting an audience aged eighteen to thirty-two years. Viewer-submitted social media comments were harvested using never.no’s Social TV technology, and read out by studio hosts and also displayed on air using real-time graphics systems by Mammoth Graphics. Viewers were asked to send short messages through the hastag “upforhire,” by e-mail, website “bbc.co.uk,” or through a special Facebook page. Up for Hire was advertised by the BBC (2011) as follows: “Five shows in four days, 30 work placements, four happy recruits who completed the work experience of a lifetime and hundreds of thousands of you who took part in the conversation online.” 3. The first edition of Upload TV was broadcast on April 5, 2013, and three subsequent editions were aired on Friday nights that same month. Each edition lasted about fifty minutes; Dagan Cohen, founder of Upload Cinema, hosted the show.

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Author Biographies José van Dijck is a professor of Comparative Media Studies at the University of Amsterdam (The Netherlands). She has published widely on media technology, social media and television. Thomas Poell is assistant professor of New Media and Digital Culture at the University of Amsterdam. He publishes on social media and the transformation of public communication.

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Special section: Digital Distribution

Television & New Media 2015, Vol. 16(2) 165–179 Entering the Graveyard Shift: © The Author(s) 2013 Reprints and permissions: Disassembling the Australian sagepub.com/journalsPermissions.nav DOI: 10.1177/1527476413505919 TiVo tvn.sagepub.com

James Meese1, Rowan Wilken1, Bjorn Nansen2, and Michael Arnold2

Abstract This article analyzes the operation and subsequent failure of TiVo in Australia. Drawing on actor-network theory, we unpack the TiVo assemblage throughout our paper, and look at the various human, technical, and institutional interventions that constituted it and constrained its possible futures. This analysis will be conducted by tracing how TiVo attempted to establish itself as a viable social and technical assemblage and assessing its influence on “new locales of regulation, new practices, new ethical stances, and new institutions.” Our approach offers an inclusive analytical lens by considering how a collection of actors—large and small, human and nonhuman— were actively involved in assembling and disassembling the network required by TiVo for an ongoing presence in Australia. It also contributes to a growing body of work that outlines the usefulness of ANT to media studies scholarship.

Keywords television, TiVo, digital video recorder, actor-network theory, postbroadcast, assemblage.

Introduction The Australian arm of TiVo appears to be in terminal decline. Despite an aggressive introduction in mid-2008 by TiVo Inc. and its local business partner Seven Media Group (Neiger 2008; TiVoHD 2008), TiVo Inc. are currently battling rumors that they are shutting down the Australian arm of the company. A journalist inquiring into TiVo’s status in Australia discovered that “units are no longer being sold online via

1Swinburne University, Melbourne, Victoria, Australia 2University of Melbourne, Victoria, Australia Corresponding Author: James Meese, Swinburne Institute for Social Research, Swinburne University, 399 Burwood Rd. Hawthorn, Victoria 3122, Australia. Email: [email protected]

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TiVo’s website or listed on either of their retailer websites, Harvey Norman or Joyce Mayne” (Cartwright 2012). TiVo Australia’s social media accounts have not been updated for some time, and cold calls to local retail outlets confirm that many stores aren’t expecting to receive any new stock from the company (Cartwright 2012; Kidman 2013). In a matter of years TiVo has almost vanished from Australian shores as a corporate and cultural presence, and journalists are suggesting that the technology itself is falling into obsolescence (Turner 2012). TiVo’s failed antipodean excursion, standing in stark contrast to the technology’s enthusiastic adoption in the United States, underlines the specificities of new media cultures and offers a valuable vantage point to assess the processes through which particular technologies become either sta- bilized or, as in the case of the Australian TiVo, superseded. This article uses concepts drawn from actor-network theory (hereafter ANT) (Callon 1986a, 1986b; Latour 1999, 2005; Law 1992), and their use in the study of markets and media (see Callon 1998; Callon, Millo, and Muniesa 2007; Couldry 2001, 2008; Goggin 2009; Teurlings 2013) to explore why TiVo failed to establish itself as a viable technology in Australia. Rather than accepting TiVo as a “single and coherent object” (Law 1992: 384) we unpack the TiVo assemblage throughout our paper, and look at the various human, technical, and institutional interventions that constituted it and constrained its possible futures. This analysis will be conducted by tracing how TiVo attempted to establish itself as a viable social and technical assemblage and assessing its influence on “new locales of regulation, new practices, new ethical stances, and new institutions” (Goggin 2009: 163). Using ANT to disassemble the TiVo allows us to understand why it failed to establish broader social acceptance around its sociotechnical affordances in Australia and reveals the contingency of new media cultures and the level of social construction present in the take up of new technologies. We have previously written about the arrival and reception of the TiVo in Australia (Wilken et al. 2011), taking a cultural economy approach to examine issues of ownership, representation, and consumption. This research considered the TiVo’s introduction in terms of licensing and functionality issues, in terms of marketing and media discussion, and in terms of the ways users first engaged with the device. In this paper, we shift our attention from the emergence and reception of TiVo, to consider its stabi- lization and subsequent unraveling. This alternative analysis of TiVo is predicated on ANT, which offers a more inclusive analytical lens by shifting from questions of culture, representation, and economics to consider a broader collection of actors—large and small, human and nonhuman—actively involved in assembling and disassembling the network required by TiVo for an ongoing presence in Australia. Our approach also contributes to a growing body of work that examines the usefulness of ANT to media studies (Couldry 2001, 2008; Goggin 2009; Muecke 2009; Teurlings 2013). The following section will outline how ANT operates as a theoretical framework and the benefits that ANT can bring to the study of media.

Actor-Network Theory and Media Studies The broad theoretical framework of ANT developed through the work of Bruno Latour (1999, 2005), Michel Callon (1986a, 1986b, 1998) and John Law (1992), establishes

Downloaded from tvn.sagepub.com at Hacettepe Univeristy on January 18, 2015 Meese et al. 167 a radical symmetry in its treatment of actors of all kinds, refusing any agentic hierar- chy between the human and nonhuman. ANT also avoids dualist conceptions of society and nature or subject and object and instead welcomes hybridity. It repositions such dichotomies as heterogeneous assemblages—“society-nature” or “subject- object”—in which humans and nonhumans are inextricably mixed together (Nimmo 2011). Rather than focusing on institutional history and questions of control and ownership, as is the case with political economy, ANT attends to the politics of everyday life, a politics that is constituted by humans and a range of other nonhumans, all of whom express agency. Thus, when thinking of the wider media environment, ANT might look at how a range of actors—fiber, screens, people, laws, factories, regulations, money, scripts, policy documents, and musical products—are assembled to constitute an actor network. There are at least two essential points of difference between this analysis, and an analysis founded in, say, a cultural studies or political economy approach. The first is that ANT avoids a human-centric perspective in which all chains of agency begin and end with human action and reaction. In ANT, nonhumans also act in the world, and their actions need to be attended to. The second is that ANT proposes a “flat” ontology in which all networks of actors, no matter how small or vast, are neither transcendent nor subject to reductionism. In this ontology TiVo is not reducible to its disk-drive, user-interface, electronic program guide, and so on, nor is it subjugated as a by-product of market forces, government regulation, or a changing mediascape. TiVo, disk-drives, user-interfaces, electronic program guides, market forces, government regulations, a changing mediascape, and many others are all actors on the same ontological plane. They jostle with one another to negotiate relationships and settle into stable networks. As explained by Latour (1999: 19), these negations constantly circulate, and there are no privileged and subordinate levels of analysis: “The social is a certain type of circulation that can travel endlessly without ever encountering either the micro-level or the macro-level.” Furthermore, ANT also understands all actor-networks as contingent. This is an important methodological realization, one that can more fully account for the dynamic nature of contemporary media environments and why particular actors succeed or fail. Actors are constantly in a process of making themselves indispensible to others through a variety of strategies (see Callon 1986a, 1986b). This process stabi- lizes the identities of each actor, cuts them off from alternative realizations of their identity, and “transforms weak, provisional, and generally defined identities into durable and seemingly irreversible ties” (Shiga 2007: 41). By noting this procedural aspect of “assembling,” ANT highlights the compromises made by each actor in the name of an assemblage, the work that needs to be done to maintain the integrity of the network and extend its life in time and space, and the process through which weak connections can become reified. Such a theoretical approach allows us to acknowledge the messy and contingent relations that exist between the technical and the social, and productively accounts for the presence and deployment of power in a nonhierarchical setting. ANT has started to be deployed in media studies, with a number of scholars noting its potential usefulness to the field (Couldry 2008; Goggin 2009; Muecke 2009; Teurlings 2013). Signaling his interest in the material-semiotic assemblages that

Downloaded from tvn.sagepub.com at Hacettepe Univeristy on January 18, 2015 168 Television & New Media 16(2) constitute actor networks, Gerard Goggin (2009: 153) argues that ANT’s focus on assemblages “brings into relief something quite distinctive about media cultures”:

[The framework] radically questions the constitution, production and reproduction of the social, how assembling culture occurs and what its significance is. To take a Latourian perspective is to radically question the givenness of its structures. (Goggin 2009: 153)

This framework evokes a very different sense of media from established political or cultural economic approaches (Goggin 2009: 153). The intensification of contemporary media leads to media “claiming a wide range of areas and investments” (Goggin 2009: 153). However, they are doing so in ways that traditional political and cultural economies find difficult to adequately comprehend and this process of intensification— of media that operate across or beyond “given” institutional or structural systems—is something that needs to be traced and accounted for (Goggin 2009: 153). Nick Couldry (2008: 2) also emphasizes the value that ANT brings to media studies, noting that ANT could help scholars avoid “the implicit functionalism in much media theory.” Echoing the concerns of Goggin, he points to ANT as a useful theoretical tool that allows us to shed light on the various human and nonhuman elements that make up “the social.” Rather than assuming that media is the social, Couldry calls for scholars to challenge the “mystifying effacement of the vast linkages of networks that make up the media process” (2008: 4), which has typified so much work in media studies. For Couldry, the benefit of ANT is that it allows a materialist approach toward the social embedding of technology to emerge. In the context of the analysis of TiVo that follows, ANT is useful as it allows for an account of media that moves beyond traditional structural approaches to media that fail to account for the “intensification” of media and an increasingly convergent media environment that operates through and across these traditional structures. In short, it allows us to study both the granular interrelations between small-scale actor networks such as an electronic program guide, and large-scale actor networks such as an international treaty, providing a means of following their interrelations to account for the highly dynamic nature of media systems (see Goggin 2009). ANT also emphasizes the generative and transformative potential of the connections between human and nonhuman actors—media cultures are not just there; they are constructed and they do things. As Joshua Braun (2013) notes,

. . . studies oriented around traditional industries tend to omit the contributions of players coming from unexpected quarters.

Considered within such a theoretical framework, TiVo can only emerge as a viable product through complex and shifting arrangements that are influenced by the inter- connected performative assertions of hardware and software, specific local regulatory contexts, local, national and international legal maneuvers, changing viewing cultures and technological environments, and industry upheavals. Rather than presenting a meta-narrative of disruption and obsolescence, ANT allows for a fine-grained account of how technological innovations integrate themselves into the world.

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Establishing an Actor Network around TiVo We now turn to the story of TiVo in Australia and our analysis proceeds in two stages. In the first stage, using ANT we detail the prehistory of TiVo and its subsequent emergence, and outline how TiVo was able to enroll a collection of actors and their networks—consumers, law, television, broadcast networks, hard drives, the Internet, politicians, the Freeview symbol, VCRs, and PVRs—and establish a space from which the TiVo could operate in Australia. In so doing we “disassemble” TiVo, and reveal the various actors that were enrolled and networks that were disrupted to create a viable actor network around TiVo, and to support TiVo’s attempt to configure the technology as a natural part of the social. Following this analysis, we then explore how ANT can productively account for the creation as well as the failure of these networks, and assess the longer-term lack of success of TiVo in Australia through this theoretical framework. We begin this account by examining the broad socio-technical network of relations that constituted the arrival of TiVo in Australia. To facilitate the successful introduction of a new technology into a world saturated with existing actor networks, a significant amount of repositioning, and reassembling must occur. What was strange and innovative must become natural and necessary as the new and the old jostle for allies, coherence, and durability and take new shapes. As Michel Callon (1986a: 21) notes, this demands a particular generative capacity from advocates of new technology:

[T]echnologists may be sometimes endowed with the capacity to construct a world, their world, to define its constituent elements, and to provide for it a time, a space, a history.

As part of this process they must enroll various actors, negotiate their roles, bind them together coherently and thus delimit a vision of the actor’s particular place in the actor network and their actor-network’s particular place in the entire collective that is often (mis)named “the social.” Establishing these complicated arrangements and developing a viable narrative of coherence became the first task of TiVo Inc. as they looked to introduce TiVo to Australia. TiVo took almost a decade to reach Australian shores after it launched in the United States. This significant delay meant that Australian consumers were already aware of TiVo as a brand; however this did not mean that the introduction of the technology would be a simple matter. In a 2005 deal, Australian Pay TV provider Foxtel put together a network around a digital video recorder called iQ (Foxtel iQ PVR launches with OpenTV software 2005), which allowed subscribers to record and replay cable television. The exclusivity of this deal meant that unlike its U.S. counterpart, the Australian TiVo would not be able to compete in this market. TiVo Inc. also found that it was introducing TiVo into an already crowded commercial environment in which the software and hardware it had assembled did not in themselves offer a compelling inducement to consumers, or in early ANT idiom, an “obligatory passage point.” There were already plenty of sociotechnologies available that enabled television to be recorded and replayed. In these circumstances TiVo needed to turn from its failure to

Downloaded from tvn.sagepub.com at Hacettepe Univeristy on January 18, 2015 170 Television & New Media 16(2) connect to cable or connect in a unique way to free-to-air and instead establish a new narrative. The attempt to establish this positioning narrative becomes apparent when looking at the launch of TiVo in mid-2008. TiVo was framed as a revolutionary new technology that would respond to the needs and wants of Australian consumers, as well as freeing them from the strictures of free-to-air broadcast programming schedules. It also suggested a linking bridge between the old free-to-air broadcast media and the possibilities of cable broadband, with the introduction of TiVo representing the future of television, and a technology that “lies at the intersection between broadcast and broadband” (TiVo HD 2008). TiVo was also presented as a populist device in an attempt to distinguish itself from Foxtel iQ. Unlike the United States or the United Kingdom, Australia has seen a relatively slow take up of subscription cable television with only around 30 percent of the population subscribing to pay television (Groves 2013; McDuling 2012). Therefore TiVo was able to develop a viable narrative that positioned itself as a technology providing viewing “freedom” to the bulk of the nation’s television viewers. This discourse was continued in early advertisements that introduced the technology to the Australian public. The most instructive ad sees an everyday man pause his television program—newly equipped with TiVo—before turning to the camera and informing the audience that his life has changed. He walks out his front door to join an advancing army of everyday consumers, brandishing remotes, and continues talking to the camera:

This is a revolution, no more being told what to watch, when to watch it. This is TV your way, in your time . . . no-one’s going to tell us what to do, when to do it, because we’re Australian . . . and we’re taking control . . . join the revolution . . . TiVo, TV your way. (TiVo Australia TV Ad 3 2008)

Throughout this process TiVo Inc.’s narrative is one that emphasizes its trusted brand name, but more importantly outlines the process through which TiVo would alter and influence the “social.” Unlike the Foxtel iQ, a marker of status, TiVo positions itself as a technology “for all Australians.” Through interceding in the relationship between viewers and broadcasters, TiVo hoped to destabilize a long established and extensive actor network, and to position itself as a passage-point between the extant world of broadcast media and the new world of digital media. In this new world, TiVo would mediate relations between viewers and broadcasters, and in so doing, enhance the agency of viewers. By studying this narrative, we also begin to see who TiVo Inc. enlists as actors in its actor-world in order to realize its vision, and sustain TiVo’s position in Australia’s wider media culture. Most importantly, TiVo established a corporate partnership with one of Australia’s largest media players, the Seven Media Group, enlisting them as an actor in their actor-world, one who would happily espouse TiVo’s narrative of “revolution” (see Bodey 2007). Strategically important due to the membership of broadcast television network Channel Seven in the Seven Media Group, this partnership allowed

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TiVo to present itself as a friend to traditional media. In doing so TiVo avoided con- flict with broadcast organizations that had previously raised legal concerns about the disruptive aspects of DVR recording and instead was able to position itself as a wel- come addition to the existing media environment (see Fitzgerald and Atkinson 2008). As part of its enrollment into TiVo’s actor world, Channel Seven would publicize the new technology and use its local celebrities and its knowledge of the Australian market to push sales (see TiVo Australia TV Ad 3 2008). Harvey Norman, a national retailer with more than 190 stores in Australia, was enrolled as a launch partner and stood as a mediator that would quickly introduce TiVo as a purchasing option in the retail stores across Australia (Dahdah 2008). Consumers were to be enlisted through the “enhanced agency” narrative deployed at the launch and through the following months were expected to be willing participants in a televisual “revolution.” The television set itself stood as a necessary actor in the entire process. It was enrolled and reshaped semiotically in its relation to the viewer through TiVo’s aforementioned “enhanced agency” narrative. This implied a concomitant reduction in the television’s agency, and the television was linked materially through the aforementioned hardware and software. The VCR and other “televisual extensions” to the traditional television (Thomas 2008: 93), were connected to the material-semiotics of TiVo in two ways. On the one hand they were made materially redundant by TiVo’s superior hardware and software, but on the other hand, they were important semiotically as well-understood exemplars of a technology type that TiVo could position itself within and ultimately transform. TiVo Inc. also enlisted the Internet as a material-semiotic network, with the company encouraging consumers to engage with online televisual consumption solely through TiVo, redirecting consumers away from the myriad of consumption options online to a usage of broadband that was constituted largely through the TiVo device. For its part, the Seven Group benefited from the alliance with TiVo through giving the group access to TiVo’s associations with “the future of television.” Along with the Seven Group, the Freeview network was the most important ally recruited to TiVo’s actor world, and the link to Freeview further cemented TiVo’s stability and growing power in Australia. Freeview, a network constructed and maintained by the vast majority of Australia’s free to air digital networks, had made numer- ous attempts to resist the introduction of PVRs, but in 2007 decided to “make their program listing information available to manufacturers of set top boxes, [PVRs] and other service providers” as long as manufacturers complied with a range of “requirements designed to protect copyright, protect the integrity of the program information and facilitate collection of ratings information” (Free TV Australia 2007). Compliant manufacturers would be formally endorsed by Freeview in the form of a “Freeview” logo on their device. Thanks to the articulation of the Seven Media Group and the TiVo, it is unsurprising that TiVo was considered an exemplary PVR, earning its Freeview endorsement soon after launch (Broughall 2009). Considering all of TiVo’s efforts to reshape its actor-world, it is important to re- emphasize the agency of nonhuman actors and their significance at every scale of analysis. As Callon (1986a: 23) explains, one can identify the significance of an actor

Downloaded from tvn.sagepub.com at Hacettepe Univeristy on January 18, 2015 172 Television & New Media 16(2) and their agency by considering whether the network under examination would break down and fall apart if that actor were to be removed from the actor world. Turning to the TiVo then, we consider the small-scale nonhuman actors such as disk drives, remote controls, and EPGs, and judge that TiVo would fall apart without their coop- erative agency. At a larger scale, heterogeneous actor networks such as the Seven Group and Harvey Norman are also vital, and TiVo would again cease to exist without their cooperation.

Translation: Sustaining and Extending TiVo Inc.’s Actor Network Given that all actor networks are unstable and require active maintenance, how does the Australian TiVo protect its linkages, build new ones, and avoid the possibility of its own demise? According to actor-network theory, TiVo can only survive through a process of circulating translations, a “contingent, local and variable” process that “generates ordering effects such as devices, agents, institutions, or organizations” (Law 1992: 386). By 2008 TiVo Inc. has established an actor world that is heterogeneous, robustly linked, and relatively stable. It is now part of a broader narrative of social and technological change that supports TiVo’s disruptive influence and provides it with legitimacy. However, there are many other actors outside the network who have contrary goals, who resist TiVo’s narrative and the position the TiVo network imposes on them, and seek to at least reshape and at most disassemble the TiVo network. Within TiVo, too, actors are restless, and we see “a heterogeneous set of bits and pieces each with its own inclinations” (Law 1992: 386), and each ready in principle to mutiny. At this point in our story TiVo had established a relatively stable and extensive network of associations whereby it was able to speak on behalf of others. Callon (1986a: 24) deploys a useful term—Translator-Spokesman—to explain how this process of translation operates. He notes that each actor is assigned “an identity, interests, a role to play, a course of action to follow and projects to carry out.” The translator speaks on behalf of each actor and reconfigures their aims with the goal of establishing coherence between the actors, collectively linked to the preferred vision of the actor world. Part of this process of translation is simplification. Actors—who are always complex and retain their own intricacies and lives—will be “black-boxed,” with the process of translation ignoring these complexities, as each actor is slowly reduced to be a serviceable part of a particular actor world, providing each actor with context, significance, and limitations (Callon 1986a: 30). In the case of TiVo, we see a series of translations occur in an attempt to stabilize itself in Australia. It “translates” Channel Seven—one of the three large FTA networks in Australia—repositioning it as an advocate of TiVo, with its identity and indeed its televisual future, no longer linked to its long history of broadcasting, but rather read through the possibilities and freedom inherent in the TiVo. This translation is even supported by Channel Seven CEO David Leckie at the launch, where he claimed that “TiVo [would] play a key role in the future of free-to-air television in Australia” (TiVo

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HD 2008). A range of large-scale heterogeneous actor networks, including Channel Seven, their employees, the Seven Media Group as a whole, and indeed—according to Leckie—the entire functional infrastructure of FTA television, is simplified and redi- rected, positioned inexorably in TiVo’s actor world, and is given a new identity as a media resource and a new dependency on the success (or failure) of TiVo. Further translations would follow. TiVo Inc. spoke on behalf of a range of actors, reshaping their identity, their position in the world of the social, and oriented them around the TiVo. Harvey Norman’s “retail distribution and logistics” (Dahdah 2008) were deployed as infrastructural support for the TiVo to access all of Australia’s hardware consumers. Viewers, televisions, VCRs, hard drives, the Internet, and the Freeview consortium were also translated through TiVo’s own narrative of the social and technical, and TiVo’s attempt at translation was to this point successful. It sold five to six times the volume of any other PVR in the first 5 months following its launch—14,000 units all up—and found itself with AUD$9.8 million in revenue to be shared between stakeholders. Emboldened by its success, TiVo Inc. sought to enroll more actors to its expanding actor network, sensing that this would further entrench the TiVo in the Australian media ecology (Avenell 2013). A range of new retailers were allowed to sell the TiVo from late-2008 onward, with JB Hi-Fi, Clive Anthony’s, David Jones and The Good Guys officially added to the list of distributors alongside Harvey Norman. JB Hi-Fi CEO Richard Uechtritz spoke con- fidently of TiVo durability, claiming that TiVo would “stay relevant over time” (Avenell 2013; TiVo retail expansion 2008). Consumers were also able to purchase TiVo’s directly from the TiVo website, making the hardware increasingly accessible. New software was also deployed when TiVo released a subscription service—CASPA On-Demand—allowing downloadable content to be delivered directly to users of a TiVo device. Internet service providers Internode, Primus, and iiNet were added to the actor network, with TiVo Inc. engaging in a series of corporate partnerships that allowed ISP subscribers to perform unmetered downloads on CASPA (Avenell 2013).1 Throughout this time of expansion and consolidation, TiVo Inc. continued their narrative of significant social and technological change, with the TiVo positioned at the heart of a new media environment. By 2009, TiVo made another dramatic move forward through successfully associating itself with the biggest game in town—the National Broadband Network (NBN). The NBN is the largest infrastructure project in Australia’s history, providing fiber to the premises of 93 percent of Australian homes, and a minimum 100 Mb/s download performance. The NBN was clearly an actor network that would change the entire media-scape and alter the foundations on which all media actor networks stood. In this context, TiVo and the NBN were directly linked through a strategic project in an early rollout area in Tasmania. Robbee Minicola, CEO of TiVO in Australia, translated the NBN, repositioning this infrastructure as just another actor vital to the success of TiVo in Australia:

Many people do not understand what the NBN is—let alone the impact it will have in our own home . . . Our aim is to demystify what the NBN means, remove technological jargon

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from the equation and enable Australians to understand how a product such as a TiVo can be turbo-charged by an Internet speed up to 200 times faster than the average Internet connection. (Lui 2009)

TiVo Inc. engaged in the range of additional activities across 2008–2010 that spoke to its transformative potential, signing content distribution agreements with leading studios, broadcasting 3D TV directly into homes ahead of its rivals, and starting trials on the new 4G spectrum (Avenell 2013). At this stage in the development of TiVo, we see the signs of a successful translation; the point at which an “actor-world renders itself indispensable,” when the actors that form a part of such a world have “no future” outside of the world (Callon 1986a: 26). Sales were intimidatingly strong, a range of corporate and government interests had centered around the technology, the television itself was reconfigured around the notion of the PVR, and their social and technical narrative was not only being sustained it was also enrolling new interests as time went on. Over a long period of time, successful translation has a significant impact. It makes people forget the history of objects. It leads to the emergence of durable organization and institutional forms, establishing a new “natural order” (Callon 1986b: 28) of televisual consumption with TiVo at its heart.

The Failure of TiVo Despite the above, TiVo is now struggling in Australia and it is equally possible to understand its demise through the same process of translation. Translation is a difficult process, never fully completed or entirely stable, and is always under threat from actors attempting to create their own actor-worlds (see Callon 1986a, 1986b; Law 1992). This process of creation is therefore always relational, with actors engaging with a push and pull of narratives and organization as they attempt to inscribe their vision on to an actor world. The fact that these processes are contingent does not mean that we cannot ascertain clear evidence of enrollment. The statement of Channel Seven CEO David Leckie, who links the future of FTA directly to TiVo, is evidence of clear and strong enrollment between Channel Seven and the social and technical narrative of TiVo (TiVo HD 2008). But resistance does occur from less invested actors, which ultimately can lead to the breakdown of an actor world. The first signs of resistance in TiVo’s actor world came from consumers, who had initially been enthusiastic about their recruitment. Sales dropped in early 2011, with somewhere between 70,000 and 100,000 rumored to be sold from its launch in 2008 to February 2011, suggesting a dramatic drop off in consumer engagement, with the targets well below the internal goals the company set for itself. The failure of the TiVo-Channel Seven consortium to reach their mid-2011 target of 500,000 units led to redundancies, leaving only five or six staff to manage the entire country and the down- grading of customer support to email-only (see Cartwright 2011; Showbridge 2011). Resistance to the actor-world of TiVo was also eventually seen through previously enrolled actors, from an array of nonhuman actors including televisions, the Internet,

Downloaded from tvn.sagepub.com at Hacettepe Univeristy on January 18, 2015 Meese et al. 175 the NBN, and hard disks to ISPs and eventually retail stores. A series of industry developments meant that, by the 2010s, streaming video was increasingly becoming an attainable reality for Australian consumers, shifting their television consumption from the couch to practically anywhere. A range of comprehensive IPTV services were launched by a number of Internet service providers severing the link TiVo Inc. attempted to consolidate between the TiVo device and the Internet since its launch. iiNet broke from its previous relationship with TiVo by launching iiNetTV, selling a PVR device and content access through its own ISP; Telstra’s BigPond released an on-demand service available on their proprietary T-Box device or through select Internet-enabled TV manufacturers; on- demand content was provided by traditional cable provider Foxtel on the Xbox 360 console; over-the-top (OTT) services such as Quickflix, expanded its mail delivery DVD rental service to include online streaming for Internet-connected devices; and finally so-called “super aggregators” such as Apple TV and Google TV, continued to offer content using OTT services such as iTunes and proprietary set-top boxes (The Australian Communications and Media Authority [ACMA] 2012). While many of these new Internet TV services incorporated set-top boxes or PVRs similar to TiVo, importantly much of this new content was to be routed directly to Internet-enabled devices, including TV screens. Hard disks continued to become cheaper and larger (see Walter 2005) meaning that TiVo Inc. needed to add storage capacity to maintain relevance, considering the first TiVo only carried 160GB of data. TiVo Inc. allowed consumers to add on external hard drive to increase capacity, and also released a 1TB version of the TiVo in 2011. Despite the increased capacity, the new TiVo failed to engage with recent innovations in the PVR market leading influential technology reviewer Adam Turner to declare TiVo “the dinosaur of the Australian market.” Instead of offering smartphone apps with remote scheduling, extra online content, extra tuners or content streaming, all TiVo could offer was “a bigger hard drive and a hefty price tag” (Turner 2011). The total breakdown of the actor world was seen when it was revealed that the original exclusive retailer Harvey Norman had stopped stocking TiVo at the end of 2012, ultimately spelling the demise of the Australian TiVo (Cartwright 2012). Returning to the concept of translation and actor-network theory we can explore the process and ramifications of this decline. At the end of his landmark study of the scallops and fishermen in St Brieuc Bay, Callon (1986b) notes dryly that “from translation to treason there is only a short step.” This process is essentially what we saw during the rapid decline of TiVo in Australia. TiVo had an initial burst of popularity in mid to late-2008, which saw TiVo Inc. able to speak on behalf of a range of representatives and stand as a legitimate spokesperson, not just of their own product, but of a particular vision of society and indeed of the near future. For a brief moment in time TiVo’s future as a sociotechnical device in Australia seemed assured and it was understood as a natural part of the media environment. However, a sudden drop in sales saw their vision of the social challenged and important actors rebelled, separating themselves from TiVo’s actor network, redefining their identities, enrolling in new projects, and ultimately damning the Australian TiVo to obsolescence.

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Conclusion: The Value of Actor-Network Theory This article has explored the broad socio-technical network of relations affecting the arrival and ultimate fate of TiVo in Australia through the framework of ANT. We have detailed how such a framework operates and then turned to the case of TiVo, explaining how TiVo Inc. enrolled various actors in their actor network and engaged in a process of translation to sustain and maintain such a network. We have also outlined how the ultimate failure of this network eventually led to TiVo’s demise in Australia. Throughout this process we have treated actors of different kinds in a symmetrical fashion, attended to the negotiations and compromises made to add to an assemblage and maintain its membership, and have detailed the dynamics of performance within and between assemblages. The significant complexity of these processes involved in TiVo’s rise and fall underline the benefit that ANT can bring to analyses of media objects. What ANT does so usefully is unpack these complexities, which are often hidden in “simplistic notions of causality and impact narratives” that are often deployed to explain technological change (Shiga 2007: 53). John Shiga explains that ANT and the theory of translation:

[P]roblematizes dominant themes in studies of new technologies and artifacts such as the notion of instantaneous information transfer, direct political/economic influences as the prime mover of technological change, and nonhuman agency as the imitation of human action. (Shiga 2007: 53)

This approach, which we have deployed throughout this article, suggests that concepts like “impact” and “revolution” obscure a much more finely grained process that explains how new technologies integrate themselves into the social. It also privileges the role of human actors when—as seen through the example of the TiVo, which was so reliant on technical objects such as hard drives and VCRs—nonhuman actors had a vital role to play in its success and failure. In concluding our analysis of TiVo, we suggest that ANT has much to bring to the discipline of media studies. As well as providing a valuable tool through which to tell the story of TiVo’s dramatic rise and fall, ANT allowed us to attend to the variety of alliances that make up the contemporary media environment and account for the contingency of such alliances. It also highlights links between a range of actors, which allowed us to account for a number of influential actors regardless of their apparent “size.” ANT reveals the constructed nature of the social and the constant possibility of failure in these alliances. It makes the natural fact of technology and media strange again and suggests more productive and detailed forms of analysis and understanding.

Declaration of Conflicting Interests The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

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Funding The author(s) received no financial support for the research, authorship, and/or publication of this article.

Note 1. The licensee of TiVo in Australia, Hybrid Television Services, owned by Seven Media Group, has announced that the CASPA On-Demand service will soon be available on other Internet- enabled devices. This has yet to be realized or made available (see Hybrid Television Services 2010). Furthermore, unlike many other countries, Australian ISPs often have a monthly download limit on many of their plans. Once consumers exceed this limit their Internet speeds are “shaped” and run significantly slower. Therefore, “unmetered” downloads would be of great interest to many households who consume significant amounts of data.

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Author Biographies James Meese is a doctoral candidate at the Institute for Social Research, Swinburne University of Technology, Melbourne, Australia. Rowan Wilken holds a Discovery Early Career Researcher Award in the Swinburne Institute for Social Research, Swinburne University of Technology, Melbourne, Australia. Bjorn Nansen holds a Discovery Early Career Researcher Award in the Department of Computing and Information Systems at the University of Melbourne. Michael Arnold is a senior lecturer in the School of Historical and Philosophical Studies, at the University of Melbourne.

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Special section: Digital Distribution

Television & New Media 2015, Vol. 16(2) 180–195 Clouded Visions: © The Author(s) 2014 Reprints and permissions: UltraViolet and the Future sagepub.com/journalsPermissions.nav DOI: 10.1177/1527476414524842 of Digital Distribution tvn.sagepub.com

Gregory Steirer1

Abstract This article uses the neoclassical economic principles of substitutable goods and switching costs to examine how the Digital Entertainment Content Ecosystem (DECE) intended its digital media ecosystem, UltraViolet, to intervene in the U.S. market for long-form digital video. The article provides a detailed blueprint of the ecosystem’s industrial arrangement, an account of its bungled rollout, and an analysis of the DECE’s long-term strategy. The piece also contributes to a dialogue on the use of economics within the field of digital distribution scholarship by arguing for the value of neoclassical principles within this field.

Keywords digital distribution, ownership, streaming, neoclassical economics, substitutable goods, switching costs

In the final quarter of 2011, the Digital Entertainment Content Ecosystem (DECE), a consortium made up of film studios, tech companies, retailers, device manufacturers, software security vendors, Internet service providers, and other Internet- and media- related companies, launched UltraViolet, a new “digital media ecosystem” that sought to both standardize and vitalize the electronic sell-through market for Hollywood products by offering consumers their “movies and television in the cloud.” Despite heavy investment by the studios and a major public relations (PR) campaign spear- headed by Warner Bros., UltraViolet debuted in the United States and United Kingdom with little fanfare, and today it remains largely unknown to a substantial portion of its

1Dickinson College, Carlisle, PA, USA Corresponding Author: Gregory Steirer, Department of English, Dickinson College, 5 N. Orange St., Carlisle, PA 17013, USA. Email: [email protected]

Downloaded fromDownloaded http://www.elearnica.ir from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 Steirer 181 target consumers. In Paul McDonald’s 2012 study examining connected viewing habits among teenagers and young adults in the United Kingdom, not a single participant reported having heard of UltraViolet (McDonald 2012, 34). In January 2013, more than a full year after the launch, a promotional survey conducted by Sony Pictures in the United States found that slightly less than half of all home entertainment consumers were still unaware of the ecosystem (Tribbey 2013).1 By most criteria, UltraViolet has thus been an unmitigated failure, and it is tempting to blame this failure on the studios’ flawed premise that today’s consumers still want to own films and television series at all. Read this way, the failure of UltraViolet represents a much larger failure on the part of the studios to understand their market, accept the loss of sell-through revenue as irreversible, and come to terms with the power of newer tech companies within the digital distribution space. Reading UltraViolet’s failure in this manner, however, precludes a more nuanced interrogation of the economic logic upon which the ecosystem was based. Such interrogation has the potential to advance our understanding of the economics of digital distribution as a whole by bringing analytic focus on those economic premises informing UltraViolet’s design and complicating some of the common “truths” we hold about digital distribution. UltraViolet’s failure can thus serve as a valuable opportunity to reflect upon how we as media scholars study digital distribution and how we account for the failure of industrial initiatives. In what follows, I thus use neoclassical economic principles to examine how the DECE intended UltraViolet to intervene in the U.S. market for long-form digital video and explain why the ecosystem has so far failed to have any notable impact. Beginning with a description of how the DECE organizes and defines the relationships between market participants, I then analyze the DECE’s strategy using the principles of substitutable goods and switching costs. Although an understanding of UltraViolet as both an ecosystem and as a strategic venture is valuable in its own right, my goal in analyzing it through the lens of neoclassical economic theory is to demonstrate the value of neoclassical economics to digital distribution scholarship and to contribute to a dialogue on the use of economics within this field. The article thus concludes with a discussion of neoclassical economics as a toolkit and an argument for its value for future research in digital distribution. Before I begin the analysis, however, a brief explanation is necessary regarding the national specificity of this study. The DECE, though made up largely of multinational companies whose home is the United States, has intended UltraViolet to function as a global brand; the ecosystem is thus meant to be broadly replicable in different national and regional markets. However, because different nations/trading regions involve different businesses, different laws, different technological infrastructure/penetration, and different social practices around the use of technology and the viewing of long- form video, both the actual working of UltraViolet and the strategy behind it inevitably vary by trading region (Strover & Moner 2014). Partly because of the challenges involved in adapting UltraViolet for each region, the DECE has thus been introducing it only gradually from region to region. At the time of this study, the ecosystem had been launched in only three national markets: the United States, the United Kingdom,

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 182 Television & New Media 16(2) and Canada. In this paper, I focus solely on UltraViolet in the United States. Although this focus reflects my own location as a researcher, it also corresponds to the DECE’s own priorities at the time this research was undertaken: in 2011, the United States was seen by many members of the DECE as both a key testing ground and the market about which they felt most knowledgeable. Despite the U.S.-specificity of this study, however, its general conclusion about the DECE’s strategy should prove applicable to markets similar to that of the United States, including the United Kingdom and Canada.

What Is UltraViolet? UltraViolet has been variously characterized by entertainment and tech journalists as a “digital locker service” (Graser 2011), a “bridge technology between physical media . . . and pure digital media” (Goldberg 2013), a “wholesale platform” (Orlowski 2011), and a “digital rights authentication and cloud-based distribution system” (Hachman 2011). The official UltraViolet website, managed by Neustar, defines it as a “free, cloud-based digital rights collection,” (UltraViolet.com 2013) while Jim Taylor, Head of Technology and Product Development for UltraViolet and author of the UV Demystified FAQ, describes it as a “branded set of specifications and agreements along with a centralized rights clearinghouse that allows retailers to sell movies that play on UltraViolet-compatible players and services” (Taylor 2013b). Not all these character- izations are themselves fully compatible (how exactly, for instance, would a consumer- geared digital locker service also function as a wholesale platform?), but neither are any of them incorrect. Indeed, one of the challenges in studying or even using UltraViolet is that it does not function like a traditional media service, retailer, or digital file format but may at different time resemble any of these depending upon what one is attempting to do with it and from where one is situated within it. Partly to reflect this protean quality, the DECE itself describes UltraViolet primarily as an ecosystem (Digital Entertainment Content Ecosystem 2013a), a nomenclature I adopt in this article. To describe how a consumer is meant to use UltraViolet, it is first necessary to define the different “roles” that make up the ecosystem and briefly map their paths of interaction. Excluding for the moment the role of consumer, the ecosystem can be dis- sected into six formally defined, distinct roles. The DECE has designated these as coordinator, content provider, retailer, download service provider (DSP), locker access streaming provider (LASP), and client implementer (Digital Entertainment Content Ecosystem 2013b, 10; Taylor 2013b). The role of coordinator is filled by a single company, currently Neustar, whose function is to maintain the ecosystem’s central clearinghouse of UltraViolet rights tokens. These rights tokens, purchased or otherwise acquired by consumers, provide their owners with access rights to individual films or television episodes. The coordinator currently also provides a web-based access por- tal, through which consumers can log in to their accounts, see a list of their access rights, and navigate to providers to stream accessible content. The major Hollywood studios except Disney function as content providers (though independent studios can in theory also fill this role), publishing content that is licensed for use within

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UltraViolet. Retailers, such as Best Buy, Walmart, and Flixster, sell this licensed content to consumers by depositing rights tokens into the consumers’ UltraViolet accounts, which are held by the coordinator.2 DSPs and LASPs then provide access to the purchased content, the former by providing consumers with downloadable files in a proprietary format named the Common File Format or .CFF, the latter through streaming. At the time of this writing, however, the .CFF format has not been implemented and no functioning DSP exists. The final role, client implementers, is filled by consumer electronic and software companies, which produce UltraViolet Players—as either physical devices (smart TVs, Blu-ray Players, etc.) or apps—capable of playing the .CFF files downloaded from DSPs. Like DSPs, functioning UltraViolet Players do not currently exist. Although each role has a distinct function, a web of licenses links the different roles together, ostensibly justifying the label of ecosystem: Retailers and LASPs require licenses from content providers for each film or television show; DSPs require provider agreements from retailers; and all roles require an UltraViolet license from the DECE. Two points are worth noting about this network of relationships. First, the ecosystem divides service provision into two separate roles, streaming and download fulfill- ment, each of which requires its own distinct UltraViolet license. LASPs and DSPs typically work “behind-the-scenes” on behalf of retailers, but with the right content licenses an LASP can also function as a “consumer-facing, standalone” service providing consumers access to UV content purchased elsewhere (Digital Entertainment Content Ecosystem 2013b, 10). Currently, however, no standalone LASPs exist.3 In addition, some retailers, such as Vudu, offer what the DECE calls “proprietary downloads”; these downloads are not dependent upon DSPs and are deposited as hidden files in proprietary formats (Digital Entertainment Content Ecosystem 2013b, 10). Second, the studios are the keystone or linchpin of the whole ecosystem. An UltraViolet license does not substitute for bilateral licenses with each content provider—that is, the studios—for each film sold or streamed. These studio-specific licenses come on top of UltraViolet licenses and must be worked out individually between the retailer or standalone service provider and the studio (Taylor 2013a). Because such licenses are necessary at the two major nodes in the ecosystem—and because such licenses require regular renewal—the studios effectively control the pipeline for UltraViolet content. How is this web of relationships supposed to translate into a consumer experience? Let us imagine a hypothetical consumer—we will call her Jenny—who wants to buy an UltraViolet film from ParamountMovies.com, an UltraViolet retailer. As a subsid- iary of Paramount Pictures, ParamountMovies.com has a license from its parent company to sell many Paramount films. Jenny settles upon Spongebob Squarepants: The Movie and purchases the film. When her purchase is complete, ParamountMovies.com reports this purchase to the UltraViolet coordinator, which then deposits a Spongebob: The Movie rights token into Jenny’s UltraViolet account. Jenny now has a number of viewing choices available. She can watch the film through a stream at ParamountMovies. com via a website, mobile app, or console app or download it using ParamountMovies. com’s proprietary player, powered by Microsoft Silverlight. She can log in to the service of another UltraViolet retailer with a license for Spongebob: The Movie, such as

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Flixster or Vudu, which will check with the coordinator to ascertain what rights tokens Jenny’s account possesses and then provide her streaming access to the films associated with those tokens. If a Spongebob: The Movie-licensed, UltraViolet retailer, such as Vudu, offers proprietary downloads, Jenny can also download the film through that retailer’s proprietary player. Jenny can exercise any of these viewing options at any time—though each service will require her to set up a new, service-specific account. Spongebob’s availability through a specific retailer’s LASP may change, however, if Paramount Pictures ends its licensing agreement with that retailer. As the above example should suggest, purchasing and viewing an UltraViolet film is a complicated process that would seem to bear little in common with the stream- lined, one-stop consumer experiences provided by Apple, Netflix, and other leading digital video services. Largely due to this complexity, the ecosystem fared horribly among consumers at launch, their prevailing sentiment, according to TechCrunch journalist Devin Coldewey, that of “preemptive rejection” (Coldewey 2012). Such rejection was due not only to the ecosystem’s complexity but also to the rough state in which it was launched: advertised features, such as downloadable copies and UltraViolet-compatible devices, were and still are missing; providers were virtually non-existent (besides Flixster, there were none until March 2012); and seemingly unanticipated windowing conflicts resulted in the temporary disabling of consumer’s access to purchased films. In response, consumers lashed out at the fledgling ecosystem in blogs, online forums, and social media, alleging fraud and exhorting others to stay clear of UltraViolet-branded product (Amazon.com 2011; Brooks 2011; Nakashima 2011). On the Amazon.com pages for the digital video disk (DVD)/Blu- ray releases of Warner Bros.’s Horrible Bosses and Green Lantern, the first home video releases to be packaged with “UltraViolet digital copies,” consumers left scath- ing one-star reviews targeted at the ecosystem. “DISGUSTED at WB’s fraudulent selling of a digital copy that does not exist,” wrote one reviewer (The Taminator 2011). “The Digital Copy, you say? Well, there is no digital copy for the customer, but the ‘right’ to stream the movie over the internet from Flixster. THIS IS COMPLETELY FALSE ADVERTISING AND FRAUD!!” complained another (Yates 2011). Although consumer responses were overwhelmingly negative, complaints were made by only a small percentage of UltraViolet’s potential consumer base. Having debuted, as Reuters journalist Brett Lang observed in 2012, “with a murmur, not a roar” (Lang 2012), UltraViolet appears to have simply gone unnoticed by the majority of home entertainment consumers.

Digital Economics Given UltraViolet’s confusing design, bungled rollout, and poor reception, it is tempting to respond to the DECE’s creation by impugning the validity of the Consortium’s vision of the current and future market for digitally distributed film. The poor performance and eventual disappearance of MovieLink, Hollywood’s previous venture into digital distribution, lends this view some plausibility (McDonald 2007, 172–74). In what little scholarly conversation has so far occurred around UltraViolet, this has,

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 Steirer 185 indeed, seemed to be the general approach—and one to which I myself have contrib- uted (Steirer 2012). Faced with a system for digital distribution that seems to contra- dict our understanding of what consumers want and how media flows, we naturally question the rationality of the companies who created and support it. In this section, however, I examine two key neoclassical economic principles structuring UltraViolet to tease out the underlying—and quite rational—economic logic upon which UltraViolet has been based. First, UltraViolet reflects a commitment on the part of the DECE to strengthen and support sell-through as the primary means of at-home film consumption. Indeed, UltraViolet represents a concerted effort on the part of the studios to stem and ideally reverse the rising appeal of transactional video on demand (VOD) and subscription services by simplifying and standardizing the experience of ownership. As Peter Levinsohn (2010), President of New Media and Digital Distribution for Fox, explained in an interview with the Carsey-Wolf Center’s Media Industries Project, “The goal [of UltraViolet] is really to increase the value of ownership.” In part, the emphasis on ownership stems from the studios’ desire to translate into digital terms the model of at-home media collection associated with the extraordinarily profitable DVD sell- through market of the early 2000s (Tryon 2012, 298). But electronic sell-through (EST) also has the additional benefit of being, at least on a transactional basis, the most profitable form of digital distribution. “Regardless of the retailer,” noted Richard Berger, Senior Vice President of Global Digital Strategy and Operations for Sony Pictures, in a 2011 interview, “EST is the highest margin transaction for us. That is why we need to make the EST value proposition as good as we can” (Berger 2011). For the studios, UltraViolet is thus a means of reallocating consumer spending on home entertainment to maximize profits. The studios’ thinking in this regard is based upon the economic principle of substitutable goods (Hoskins et al. 2004, 39–57; Mankiw 2007, 63–71). From this perspective, EST purchases, transactional VOD, and VOD subscriptions all compete with one another for a finite amount of consumer dollars earmarked for home entertainment. Because these goods are in competition with each other, a change in value for one category will, in most cases, result in a realignment of demand for all three. For example, were the cost of transactional VOD to go up—resulting in less value per dollar spent on this category of good—we could expect, in consequence, an increase in demand for VOD subscriptions and/or EST purchases. A change in price is the sim- plest example of how demand for one good can affect the demand for a substitute, but demand can also be affected by implicit or “invisible” costs, such as limitations on use, high costs required to switch to a different service, proscriptions against transfer or resale, and uncertainties regarding future product support. In the market for home entertainment, a host of implicit costs (indeed, all the costs listed in the previous sen- tence) are currently associated with EST purchases, resulting in comparatively low value per dollar spent. If these costs were to be removed, however, the value to consumers of EST purchases—even were their price-point to remain unchanged—would increase and transactional VOD and VOD subscriptions would become comparably less appealing. Consumers would (so the thinking goes) migrate away from rentals

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 186 Television & New Media 16(2) and toward purchases, just as they did when the DVD, offering more value per dollar over the video home system (VHS) tape, debuted at the end of the last century. UltraViolet is thus, first and foremost, a somewhat brilliantly conceived, if tortuously executed, attempt to get rid of the implicit costs to consumers associated with digital ownership, costs that the DECE believes—quite rightly in my opinion—are responsi- ble for both the weak EST market and the extraordinary popularity of VOD subscription services such as Netflix. For film industry scholars, the principle of substitutable goods also explains why it is at best unhelpful to ask which of these consumption models consumers themselves prefer. Preference for one good over another cannot be abstracted from value-per- dollar assessments, which consumers often determine unconsciously and which involve ascriptions of value and cost that are extremely difficult to parse out of data sets (whether industry- or scholar-produced) measuring usage patterns. We as scholars thus commit a serious error when we hold one consumption model as inherently superior to another. The value of a specific distribution method or mode of consumption is not determinable without taking into account the costs and benefits of the alternatives. Because these costs and benefits are part of an integrated, dynamic system, they also tend to shift over time, thus ruling out static ascriptions of value. Nor should analyses of economic value and viability be confused with and/or overwritten by analyses of political value. The latter, typically produced under the label of political economy, examines how methods of distributing information and other resources give rise to or undermine different forms of political participation and social relations (Garnham 1990; McChesney 2004; Mosco 2009; Murdock and Golding 1973; Winseck 2011). Although valuable in themselves, such analyses do little to help clarify the micro-level economic processes that shape product performance in a specific market. Much of the most prominent film and media studies scholarship on digital distribution, however, has put forth a VOD model of distribution and consumption (usually rooted in subscription, though sometimes also embracing advertising-supported VOD services) as the ideal model for digital media. In the work of Jeremy Rifkin, Henry Jenkins, and Mark Poster, a commitment to ownership signifies a blindness or resistance among content producers to the changes in patterns of consumption that have taken place within what is often called the “network” or “information” society (Jenkins et al. 2013; Poster 2006; Rifkin 2000). Blinded by their reliance on twentieth-century profit models, these companies have failed to adjust their business strategies to twenty- first-century paradigms of consumption, which revolve around access, sharing/participation, and experience. Such a framework is no doubt attractive in that it better fits the dominant paradigm of twenty-first-century theoretical work on digital culture and the information society: postmodernism (Wilkie 2011). Despite this framework’s attractions, we as media scholars are better served by resisting it—or, at the least, tem- pering it with neoclassical economic principles. When not coupled with economic analysis, an emphasis upon sharing, subscribing, and participatory culture in our scholarship not only provides an incomplete picture of media consumption today but also makes it difficult for us to understand the logic underpinning media industry initiatives such as UltraViolet.

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Just as the economic principle of substitutable goods is necessary for fully understanding what UltraViolet aims to do in the consumer market, another neoclassical economic principle—that of switching costs—is essential for understanding how UltraViolet has been designed to intervene in the retail EST market. Switching costs are the additional expenses incurred by a consumer when he or she changes from one product to a competing or substitute product. Such costs can be explicit, as when, for example, one must pay a termination fee and/or new account fee when switching cell phone providers; or implicit, as when one must learn how to set up and use a new printer. Some level of switching costs are involved with any kind of change in con- sumable object, but switching costs arguably take on an increased importance in markets for software, operating systems, and digital media, where consumers appear especially subject to the effects of lock-in and path dependency. In this market, lock-in, as Carl Shapiro and Hal Varian (1999, 158) explain, occurs “when the cost of switching from one brand of technology to another are substantial”—or, in economic terms, when the cost of switching to a new brand of technology outweighs the value to be gained in doing so. The theory of path dependency, a corol- lary to the concept of lock-in, posits that a technological product may evolve to domi- nate a market not by offering a superior consumer experience but rather by having managed to lock in consumers at an early stage in the development of that market. Unlike the principle of switching costs, the concepts of lock-in and path dependency are controversial, with economists disagreeing on the significance of their effects— and, in the case of path dependency, on whether it actually exists at all (Liebowitz 2002, 25–57). Indeed, Robert McKenzie (2003, 159–186) even argues that lock-in effects may benefit consumers. For the purpose of this article, however, I am not interested in these concepts’ larger economic significance but rather in how they inform the strategy of the DECE and, more generally, the competitive practices of media and technology firms within the consumer market. To fully comprehend how the concept of lock-in has affected the EST market for film in the United States, we must first understand the position and influence of Apple in this market. As film scholar Peter Decherney describes in Hollywood’s Copyright Wars, the primary features of the current market for EST film were established by Apple as early as the 1980s, when the company broke from the dominant “open” approach to computers and operating systems, exemplified in Microsoft’s disk operating system (DOS) and Windows, in favor of what Decherney (2012, 215) calls a “closed approach to computer design.” By proscribing interoperable devices and cen- tralizing retail and software services, Apple sought both to simplify the user experience and to lock in consumers to Apple hardware (Snickars 2012). In Apple’s closed system, switching costs are thus extraordinarily high. Indeed, consumers wanting to switch to a new technology platform will face costs equal to that of repurchasing their entire software and iTunes media collections. Following Apple’s extraordinary success over the last decade both in EST and hardware sales, other technology and retail companies have put in place various forms of closed market/design models adapted from that of Apple. The digital rights management (DRM) scheme used by the iTunes Store, in which consumers are required to use

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 188 Television & New Media 16(2) the same service through which they purchased a film to view it, has become ubiqui- tous, thereby associating high switching costs with virtually every EST service. Like Apple, many companies have also tied some or all of their EST services to specific devices (for example, Microsoft’s Zune and Sony’s PlayStation Network), further raising the cost of switching. High switching costs benefit an EST retailer, however, only if that retailer can attract consumers to its service in the first place—a proposition which has proven extraordinarily difficult to achieve in the face of Apple’s high market penetration and extraordinary popularity among consumers. Indeed, for Apple’s competitors, each new consumer locked in to Apple means one less consumer available to be locked in to an alternate service.4 A market organized around high switching costs is thus a high stakes game in which individual retailers effectively monopolize access to individual consumers’ spending. Add in the influence of network effects, wherein a growing user-base increases the value of the service for all users (thus making Apple’s iTunes, because it is larger, also more valuable), and the EST market appears to be a “winner-take-all” competition in which Apple has already won (Lemley and McGowan 1998, 488–495; Liebowitz 2002, 13–15). Although Apple’s iTunes store is commonly seen as offering the “best” EST service, the fact that it was also the first suggests that it may also be benefitting from path dependency and that the competition has been “rigged” in its favor by economic laws from the start. Whether or not path dependency is at work, Apple’s large market share and locked-in customers give it tremendous negotiating power with the studios, allowing it not only to influence general EST policies, such as DRM systems and storage rights, but also to effectively set both wholesale and retail pricing for the entire EST industry.5 With UltraViolet, however, the DECE has attempted to substantially reduce Apple’s power. By separating the roles of retailer and provider, and thereby enabling viewers to access purchases via a host of services and devices, UltraViolet virtually abolishes switching costs—at least for UltraViolet-branded EST films. Switching from one UltraViolet-affiliated retailer or platform to another involves no costs to consumers beyond that of having to learn a new technology or interface. By enabling cost-free switching, the intentionally open ecosystem of UltraViolet thus grants participating retailers a competitive advantage over Apple’s closed iTunes service. Whether the advantage is enough to overcome the high switching costs faced by consumers already locked in to Apple’s service is an open question, but as the UltraViolet ecosystem expands, so too should the costs of sticking with Apple. Indeed, were the other major EST retailers and device manufacturers to sign up with UltraViolet (as they all appear to be considering doing), Apple’s service would become exceptionally expensive. Although UltraViolet’s main target is Apple, the ecosystem also ensures that no UltraViolet-participating retailer can ever be in a position strong enough to influence policies or set prices. Because switching costs within the UltraViolet ecosystem are virtually zero and lock-in is non-existent, the disappearance of a studio’s films from a leading EST retailer’s store should have a minimal effect on total sales; consumers can simply buy the UltraViolet rights tokens for these films from another EST retailer. Retailers with high market share thus lose their main bargaining chip against studios within the UltraViolet ecosystem. While leading retailers suffer a loss of negotiating

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 Steirer 189 power due to the absence of lock-in, other retailers—and especially new entrants— benefit by having access to a larger market of potential consumers. Free to switch and sample retailers, consumers are effectively up for grabs as UltraViolet creates a more level playing field for EST retailers. At the aggregate level, however, UltraViolet is also bad for retailers in that this level playing field should result in more intense competition than we would find in a market with high switching costs. Whereas in the latter, competition takes place mostly at the level of service provision (iTunes, for example, offering more or better service than Vudu), in a market lacking switching costs, competition should take place around price (Vudu, for example, offering cheaper rights tokens than CinemaNow). As a result, each sale will result in less revenue for retailers—much less if price competition is as fierce as we find it in the physical sell-through market. Falling per-purchase revenue should, however, be partially offset by both increased numbers of sales and, following the principle of substitutable goods, increased demand as consumers shift expenditures away from transactional and subscription VOD. What is bad for individual retailers, who will have to work harder to earn less, is thus good for the EST market as a whole—and especially good for the studios, who will benefit unequivocally from increased EST sales, as the studios’ per-sale take remains the same even as retailers cut prices.

The Future of Digital Distribution Studies That I have presented UltraViolet as an attempt by the DECE to shift the concentration of power within the EST market should not be surprising. Analyses of power relationships, often under the name of political economy, are a mainstay of media industry scholarship. The path my analysis of the DECE’s aims in the retail EST market took, however, should seem less familiar. Beginning with a few basic economic principles and a description of the market, I proceeded through a series of economic syllogisms to describe how UltraViolet was expected to impact that market over the long term and why the changes it wrought would be in the interest of the DECE. That so few scholars of digital distribution use such a methodology is partly because film and media studies graduate programs provide little training in microeconomics, theories of competition, and business law—though this has not completely prevented the application of these theories in scholarship on physical film distribution/exhibition (Gomery 1992; Olson 1999; O’Regan 2012; Wasko 2003; Wasser 2001). Neoclassical economic analysis may also be seen to gel poorly with both apparatus-based and ethnographic-oriented research methods that underlie much recent work in distribution cultures, flows, and exchanges (Dixon 2013; Jenkins et al. 2013; Lobato 2012; Pertierra 2012; Tryon 2012). More significantly, the scarcity of neoclassical economic analysis in digital distribution scholarship reflects a general scholarly concern, especially prominent among scholars working within the political economy of communication, that neoclassical economic principles are theoretically flawed due to their bracketing off of tempo- ral and social processes (Babe 1995; Mosco 2009). For scholars working in what Andrew Calabrese (2004, 1–2) calls “critical political economy,” such a flaw is perceived not only as resulting in incorrect or obscurant conclusion but also as signaling

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 190 Television & New Media 16(2) a complicity with laissez-faire capitalism and neoliberalism (McChesney 2008; Miller et al. 2005; Mosco 2009). My intent in this article is not, of course, to suggest that neoclassical economics provides either a perfect or self-sufficient toolset. What I have hoped to demonstrate instead is that it is a useful toolset that is not only helpful but also, in fact, essential for understanding both how specific digital distribution systems are designed to work and why these systems succeed or fail. As my discussion of substitutable goods and switching costs was also meant to demonstrate, the concern that neoclassical economics strips both time and social context from the phenomena it examines is unwarranted. Although, to be sure, neoclassical economics is of limited use for examining macro-level socio- historical change, democratic processes, and the effects of ideology, it does provide a theoretical construct capable of explaining why resources get allocated in particular arrangements over a defined period of time. Far from limiting itself to what Mosco (2009, 62) calls “static models,” neoclassical economics (or what Mosco simply calls economics) allows researchers to explain, infer, and predict many forms of historical change, including industrial change, institutional change, and behavioral change. As for its treatment of social processes, neoclassical economics does, indeed, strip away the messiness of social processes and participation, rendering the research paradigm incapable of producing the kind of rich ethnographic account of distribution cir- cuits that Lobato (2012, 85–92) provides in his analysis of piracy. Such stripping, however, occurs for the sake of allowing more precise analyses of the relationships among the discrete and relevant variables that constitute a given market. Neoclassical economics is thus better seen as distilling social processes into abstract, measurable, and traceable variables than as dispensing with them entirely. In this article’s discussion of substitutable goods, for instance, neither consumer behavior nor business behavior is portrayed as a pre-defined bundle of preferences and practices; rather, the interaction between consumers and businesses over time is presented as giving rise to changing preferences and behaviors within both groups. The market for digital film and television, like all markets involving some degree of genuine competition, can and thus should be viewed as a social process—or, if you will, a wide-scale and perpetual conversation about value. Although neoclassical economic analyses can neither capture all the relevant social context nor account for the experience of agency, these problems are shared by most theoretical models of social processes and historical change. Neoclassical economics is useful, then, not only for the clarifying vision it provides about how markets for digital products are constituted and altered but also as correc- tive for the impulse to view digital networks as extra-economic. As Patrick Vonderau (2014, 109) suggests in a recent piece on digital markets, our tendency to position informal markets such as that “provided” by The Pirate Bay as “constituting a sphere outside of economics,” results in work that can drastically mistake how power is con- centrated and deployed. Although distribution scholarship has recently begun to see pirated services as competitors to “formal” digital distribution services, too rarely are the pirated services themselves viewed as economic agents acting in their own interests—or in the interests of the venture capitalists that have funded them. For digital distribution scholars, neoclassical economics can thus serve as useful tool for both

Downloaded from tvn.sagepub.com at Izmir Institute of Technology on January 18, 2015 Steirer 191 challenging our own preconceptions (companies’ business models are stuck in the past, access is good, corporations and consumers are enemies, sharing is extra-economic, etc.) and fine-tuning our critical analyses and political interventions. There yet remains one additional reason why neoclassical economics should be viewed as essential for the future of digital distribution and media industry studies: businesses and regulatory agents treat it as such. Despite all that it leaves out or obscures, it nevertheless serves as the dominant engine of decision-making for inves- tors, executives, labor leaders, competition regulators, and other powerful decision- makers. Utilizing neoclassical economic principles can thus assist us in understanding the day-to-day labor of high-level employees, many with MBAs, and the decision- making processes of businesses themselves. With neoclassical economics as part of our toolkit, we may even be able to expand the reach of our own work into the corporate space itself, where we can both learn from and potentially educate high-level decision-makers. The Connected Viewing Initiative (CVI), an ongoing research program in which film and media scholars share scholarship with executives in Warner Bros.’s Digital Distribution division, has already taken steps in this direction (Carsey- Wolf Center 2013). Indeed, the research conducted for this paper—though conducted after the completion of the first CVI initiative—benefitted from multiple conversations with executives from Warner Bros.’s Digital Distribution division. If such opportunities are to expand and proliferate—and for us to derive maximum benefit from them—we as industry and digital distribution scholars will need to become fluent in neoclassical economics.

Declaration of Conflicting Interests The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding The author(s) received no financial support for the research, authorship, and/or publication of this article.

Notes 1. The survey was distributed by e-mail as part of a campaign to increase awareness of UltraViolet, not to measure it. The survey rewarded completion of the survey with a free UltraViolet movie token (psilver 2013). The awareness rate Sony reported is thus likely inflated. 2. Technically, a retailer need not actually sell rights tokens; companies licensed as retailers can deposit them into users’ accounts through any form of transaction, including disk-to- digital conversion (as offered by Walmart) or redemption codes packaged with Blu-rays (as employed by Flixster). 3. Retailers are required to provide free streaming access (via a locker access streaming provider [LASP]) and at least three downloads (via a download service provider [DSP]) for at least one year from date of purchase. In practice, the streaming access has so far not been subject to expiration (Digital Entertainment Content Ecosystem 2013b, 13).

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4. This calculation ignores the entry of new consumers into the market (McKenzie 2003, 171–173). 5. The Robinson-Patman Act makes it illegal for a supplier to use differential pricing when selling to wholesalers or retailers (other forms of indirect discrimination remain legal). As a result, when Apple successfully negotiates with a studio for a lower price-point, all other EST retailers (with certain limitations) must also receive this price-point. Note that the same logic pertains to physical sell-through markets (Walmart, for instance, has frequently used its position in the digital video disk [DVD] market to set pricing terms); for consumers, however, the effects of such negotiations are more apparent for EST films, which, not being protected by the first-sale doctrine, tend to exhibit standard retail prices set by the studios (Chartier 2007; Nagle et al. 2011, 315–20; Steirer 2014, 89–91).

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Nagle, T., J. Hogan, and J. Zale. 2011. The Strategy and Tactics of Pricing: A Guide to Growing More Profitably. 5th ed. Boston: Prentice Hall. Nakashima, R. 2011. “Hollywood Flubs Movie System Launch, Miffs Users.” BloomburgBusinessweek.com, December 8. http://www.businessweek.com/ap/financial- news/D9RGHGMO1.htm (accessed April 15, 2013). Olson, S. 1999. Hollywood Planet: Global Media and the Competitive Advantage of Narrative Transparency. New York: Routledge. O’Regan, T. 2012. “Remembering Video: Reflections on the First Explosion of Informal Media Markets through the VCR.” Television & New Media 13 (5): 383–98. Orlowski, A. 2011. “What Is UltraViolet and Why Should You Care?” The Register, June 1. http://www.theregister.co.uk/2011/06/01/ultraviolet_wtf/ (accessed September 9, 2012). Pertierra, A. 2012. “If They Show Prison Break in the United States on a Wednesday, by Thursday It Is Here: Mobile Media Networks in Twenty-First-Century Cuba.” Television & New Media 13 (5): 399–414. Poster, M. 2006. Information Please: Culture and Politics in the Age of Digital Machines. Durham: Duke University Press. psilver. 2013. “Sony Pictures Store and Ultraviolet Survey—Get a Free Movie!.” SlickDeals. Net, February 6. http://slickdeals.net/f/5842650-Sony-Pictures-Store-and-Ultraviolet-Sur- vey-Get-a-free-movie (accessed April 10, 2013). Rifkin, J. 2000. The Age of Access: The New Culture of Hypercapitalism Where All of Life Is a Paid-for Experience. New York: Putnam. Shapiro, C., and H. Varian. 1999. Information Rules: A Strategic Guide to the Network Economy. Boston: Harvard Business School Press. Snickars, P. 2012. “A Walled Garden Turned into a Rain Forest.” In Moving Data: The iPhone and the Future of Media, edited by P. Snickars and P. Vonderau, 155–68. New York: Columbia University Press. Steirer, G. 2012. “Added and Subtracted Value.” Paper presented at the bi-annual Flow Conference, Austin, Texas, Novermber 1-3. Steirer, G. 2014. “The Personal Media Collection and the Electronic Sell-through Marketplace.” In Connected Viewing: Selling, Sharing, and Streaming Digital Media in a Digital Era, edited by J. Holt and K. Sanson, 79-95. London: Routledge. Strover, S. L., and W. Moner. 2014. “The Contours of On-Demand Viewing.” In Connected Viewing: Sellkng, Streaming, & Sharing Media in the Digital Era, edited by J. Holt and K. Sanson, 234-253. London: Routledge. Taylor, J. 2013a. Interview by author, 9 May. Transcript. Glendale, CA. Taylor, J. 2013b. “UltraViolet FAQ.” UVDemystified.com, last modified April 9. http://www. uvdemystified.com/uvfaq.html#1.1 (accessed April 11, 2013). The Taminator. 2011. “Disgusted at WB’s Fraudulent Selling of a Digital Copy That Does Not Exist.” Review of Green Lantern, October 18. http://www.amazon.com/Green-Lantern/ product-reviews/B005LJITS0/ref=cm_cr_dp_qt_hist_one?ie=UTF8&filterBy=addOneSta r&showViewpoints=0 (accessed March 15, 2012). Tribbey, C. 2013. “UltraViolet Awareness, Accounts Up.” Home Media Magazine, March 28. http://www.homemediamagazine.com/digital-copy/ultraviolet-awareness-accounts-30012 (accessed April 10, 2013). Tryon, C. 2012. “‘Make Any Room Your TV Room’: Digital Delivery and Media Mobility.” Screen 53 (3): 287–300.

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Author Biography Gregory Steirer is an assistant professor of English and film studies at Dickinson College. His research focuses on the impact of technological and economic changes on the production and consumption processes surrounding old and new media forms. His recent work has appeared in Postmodern Culture and is forthcoming in the edited collection, Connected Viewing (from Routledge).

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Special section: Digital Distribution

Television & New Media 2015, Vol. 16(2) 196–214 Direct Marketing and the © The Author(s) 2012 Reprints and permissions: Productive Capacity of sagepub.com/journalsPermissions.nav DOI: 10.1177/1527476412467075 Commercial Television: tvn.sagepub.com T-commerce, Advanced Advertising, and the Audience Product

Lee McGuigan1

Abstract This essay contributes to a materialist understanding of institutional dynamics in commercial television in the United States. It considers the mutual constitution of business administration and social developments in technology. It is argued herein that ongoing organizational shifts in television are motivated by the imperative to exploit the full productive capacity of commercial television. A case study of Canoe Ventures demonstrates that television increasingly employs the evaluative criteria of direct marketing to rationalize the process of producing audiences-as-commodities. The business of commercial television is being organized to verify return on investment and to locate causality between advertising and sales.

Keywords t-commerce, interactive advertising, commercial television, direct marketing, productive capacity, audience commodity

Introduction At a time when many observers are writing obituaries for commercial television, Lawrence Kimmel, Chief Executive Officer (CEO) of the Direct Marketing Association, sees an auspicious culmination:

1University of Western Ontario, London, Canada

Corresponding Author: Lee McGuigan, 19340 Charing Cross Road, London, ON, Canada, N0P 1E0. Email: [email protected]

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In many ways, the classic purchase of demographics has always been a proxy for an audience. I think the most exciting thing about interactive television is that you’re ultimately going to buy an audience that you want, that’s responsive and appropriate for you. And I think the world will change when we get to that place. (“The Recursive Ménage à Trois” 2010)

The television economy in the United States is being adjusted to absorb the productivity of digital information technologies that support direct marketing and electronic commerce (Andrejevic 2002; Turow 2006). It is argued herein that these developments are designed to transform television into an interactive storefront. Demanding accountability for advertising expenditures, marketers are embracing tactics to monitor viewers almost constantly, target them personally, and elicit instant feedback. Advanced television advertising combines the mass reach of broadcasting, the preci- sion of direct marketing, and the measurability of direct-response media (Steinberg 2008a; Worden 2009). Marketers hope interactive applications will enable them to verify returns on advertising investments with greater certainty. The pursuit of verifi- able return on investment is impelling the television industry toward commercial models that account not only for advertising exposure but also, essentially, for a direct influence on sales. “T-commerce” (television-commerce) is the most invasive iteration of television’s marketing capabilities. The term denotes television marketing and shopping applications that enable viewers to interact with advertisements and to make purchases using a remote control. Viewers can “click-to-buy” items ranging from advertised products, to DVDs of a program, to the clothes worn by the characters in a show. For the pur- view of this study, t-commerce also comprises advanced advertising strategies, which include targeting viewers with customized messages (“addressable advertising”) and using database technologies to manage advertising inventory based on program context and geodemographic variables (“dynamic ad-insertion”; Neff 2004; T. Spangler 2010a; Vascellaro 2011). Advanced advertising lets marketers target specific neigh- borhoods, households, or even individual consumers with personalized solicitations (Lotz 2007b, 177; W. E. Spangler, Gal-Or, and May 2003, 72; Steinberg 2010a; Turow 2005, 118). As a keystone of an interactive television (ITV) economy, t-commerce serves more generally as a heuristic anchor for analyzing ways in which technologies are leveraged to draw ever more user activities into commodity relations—or, in industry parlance, to “monetize relationships with viewers” (Robuck 2009). Consistent with the longstanding ambition of “turning TV sets into cash registers” (Skelly and Weiss 2000), the development of t-commerce in the United States demonstrates the industrial logic of television: Advertisers buy audiences of consumers whose value is directly based on their purchasing behaviors; the engine of change in this industry is ongoing amplification of the capacity to produce valuable audiences and expedite consumption of branded goods and services. Productive capacity describes the ability to generate profit from commodity production. Although it is suggestive of the upper potential of productivity, the concept

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 198 Television & New Media 16(2) emphasizes limits and pressures imposed both by and on historically embedded means and relations of production (Parker 1985). Our focus is the mutual constitution of social developments in technology and audience manufacturing. Within the institutional economics of television, the audience is both a commodity product and a medium of exchange for transactions between advertisers and media organizations. We examine how adjustments in the commercial structure of television, toward the techniques and evaluative criteria of direct marketing, relate to changes in how audiences are conceptualized and manufactured. This analytical framework is applied to a case study of recent interventions toward a national business model for ITV in the United States. We interrogate Canoe Ventures, a consortium of the six largest US cable service providers. From 2008 to 2012, Canoe made strategic contributions to an ITV storefront. Canoe was a venue for cable operators to combine resources and work collectively at a mutual goal: protecting television’s share of advertising revenue against competition from online marketers by pairing television’s prized assets—mass scale and persuasive power—with interactive marketing and surveillance. It tried to organize commercial relations around a definition of audiences as consumers who are targeted personally and monitored from the living room to the checkout aisle (“Tcommerce” 2010). Canoe was modeling the television business to account for return on investment by demonstrating causality between advertising and sales. The principal argument presented herein is that Canoe Ventures attempted to activate unused productive capacity in cable television. Canoe aimed to augment the production of commodity audiences by provisioning two complementary infrastructures: the technical capacity to facilitate purchases directly from television programs and advertisements, and the administrative systems, or institutionalized relations and information flows, to valorize audiences of targeted consumers. This analysis proceeds as follows: The first section introduces Canoe Ventures, its goals, and perceived advantages. The second section describes t-commerce and advanced advertising more generally. The intellectual support for these strategies was assumed by Canoe to jus- tify its business model. In the third section, we present evidence of a shift away from an exposure-based advertising model toward a direct marketing model. It is argued throughout that Canoe appropriated this direct marketing model to improve productivity— by targeting viewers based on behavioral profiles and by monitoring them as they act as consumers in the marketplace. In the fourth section, this claim about direct marketing and productivity is treated through Marxist-inflected theories of media in capitalism. Because commercial television is structured to manufacture audiences as commodities, and because this process is inexorably married to product marketing and the acceleration of capital, we argue that commercial television is implicated in both production and circulation. The productive capacity of television is mutually constituted by the capacity of viewers to consume branded commodities. Finally, we find Canoe was constrained by the historically and socially embedded institutional political economy of television; the consortium effectively folded after failing to achieve the ambitions of its financiers. The formation of Canoe may have been a desperate effort to protect a business model that regards television as a discrete medium and

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industry1—a model that is increasingly vulnerable and anachronistic, yet bound to fixed capital investments.

Canoe Ventures: Building National Markets for T-commerce and Advanced Advertising Canoe Ventures emerged in 2008 with a combined endowment of $150 million from the six largest cable systems operators in the United States—Comcast, Time Warner Cable, Cablevision Systems, Cox, Charter Communications, and Bright House (Arango 2008). It was devised by the advertising sales management of these cable operators, with a mandate to create a unified national platform for interactive and addressable advertising (Hampp 2008; T. Spangler 2008a). According to Advertising Age, Canoe endeavored to “make cable-television households the most attractive platform for advanced advertising” (Poggi 2012). To accomplish this goal, Canoe routed investment into technical capacity and standardization, and it engendered collaboration among cable firms, advertisers, market researchers and consumer databases, and electronic payment firms. Canoe planned, on one hand, to service technical infrastructure that would enable national brands to deploy targeted and direct-response advertisements across the markets of diverse cable systems (T. Spangler 2009d; Steinberg 2008b), and on the other hand, to coordinate relations within and among firms to simplify and routinize the processes of buying, selling, and measuring audiences of targeted, purchase-capable consumers (Swedlow 2010). One commentator described Canoe’s vision as straightforward: “to enable interactivity within local cable systems and allow the national cable networks to sell it to their national advertisers” (Howe 2012b). David Verklin served as CEO to Canoe during its formative period, until 2011; as he put it, “It is essential that advanced TV inventory become easier to sell and buy. That’s what Canoe is all about” (“INVISION” 2011). Canoe Ventures (2011a) characterized its mission as one to “make TV more meaningful for viewers and more valuable for marketers.” It promised to make advertisements both relevant to viewers’ unique circumstances and more likely to influence purchasing behavior, and to deliver a level of accountability for television advertising approaching the return on investment standards of direct marketing (McClellan 2008). “Advertisers will know exactly how many viewers they influenced,” Verklin (2011a) claimed. As with previous ITV ventures, however, Canoe was dedicated to exerting power at an institutional level to the advantage of its cable partners as they compete in markets for audiences and consumers (cf. Kim 2001). Cable systems operators struggle to respond to rapid social developments in media technologies because of overhead costs associated with existing productive capacity. In the early-1990s, the US cable industry spent an estimated $20 billion to change from coaxial cables to optical fiber (Press 1993, 20). Cable companies invested $70 billion during the early-2000s to upgrade to digital systems (Richtel 2003). By 2008, private capital investment in US cable infrastructure since 1996 was estimated at $130 billion (National Cable & Telecommunications Association 2008, 4–5). Comcast

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 200 Television & New Media 16(2) alone averaged yearly capital expenditures of more than $5.3 billion from 2007 through 2010, and more than half was spent on household installations, such as set-top boxes (Comcast Corporation 2011, 45). Investments of this magnitude constrain innovation: the cable industry is motivated to operate within the limits of set-top box architecture because of the fixed capital bound to this “proprietary infrastructure” (Turow 2006, 118–119). Canoe proposed to help cable operators leverage this existing technical capacity toward rendering two industry-level services: hosting an ITV storefront (T. Spangler 2010a) and exploiting direct access to consumers’ viewing histories through proprietary set-top boxes (T. Spangler 2009b). The first intervention was designed to siphon revenue from advertising expenditures and commissions on direct-response purchases (Howe 2009b; T. Spangler 2010f). Canoe itself did not sell advertisements but received a portion of the premium rates programmers charged for advanced advertising (T. Spangler 2008a). Cable operators, in short, wanted to glean incremental returns from their ownership of the “pipes” that support data carriage and interactive applications. The second intervention would implicate cable operators in expanding markets for consumer information (McClellan 2008), positioning operators more centrally in audience manufacturing. Control of set-top boxes enables precise monitoring and targeting of consumers; interactive media in general can store records of almost any user interaction (Andrejevic 2002; Napoli 2011). This surveillance allows cable systems operators to commodify more behavioral information, as more observable actions yield saleable products. In sum, cable operators have capital investments too large to abandon. Canoe promised to salvage returns on these investments by realizing the full capacity of cable systems to collect valuable information about viewers, to market directly to known subscribers, and to mediate commercial transactions. Canoe’s primary contribution to technical infrastructure was the development of a standardized “application programming interface” to support interactive content across hitherto incompatible hardware and software systems (T. Spangler 2009d; “The State of Cable” 2010). Canoe sponsored research to achieve “interoperability” among rival cable systems (T. Spangler 2009a), and it established an “enhanced-TV binary interchange format” (EBIF; T. Spangler 2010c). EBIF standards and advanced advertising products were tested and refined through collaboration among Canoe’s partners and technicians at Cable Television Laboratories, Inc., a research and development consortium (T. Spangler 2010f). Coverage in the trade press suggests that Canoe executives spilled plenty of champagne toasting EBIF technology, which to them marked “an inflection point where, after more than twenty years of interactive TV, the infrastructure is finally becoming widely operational” (T. Spangler 2010d). The prospect of instituting uniform technical standards across the markets of Canoe’s cable partners was seen to overcome limits of scale and complexity endemic to a chaotic sector of telecommunications (Howe 2009a; McClellan 2008). According to the president of BlackArrow, an advanced advertising firm, national marketers become interested only when “the Comcasts of the world” deploy these applications across their entire subscriber markets (T. Spangler 2010e). With forecasts that 42.9 million

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 McGuigan 201 cable subscribers could have EBIF functionality by the end of 2011 (T. Spangler 2010b), Canoe portended this new value proposition—targeted marketing, at mass scale, with instant feedback. Such inflated speculation precipitated an outpouring of optimism. The CEO of the Association of National Advertisers (ANA) crowned Canoe’s interactive and advanced advertising services as new “staples of the media mix” (Canoe 2010a). Even despite persistent setbacks in initiating applications (Swedlow 2009), Canoe (2011b) maintained that ITV was imminently close to infil- trating the daily decision-making considerations of media buyers. In 2012, however, Canoe suspended its formal effort to build national markets for interactive advertising. This ostensible failure is discussed after explaining Canoe’s development and deployment of t-commerce.

An Interactive Television Storefront Media executives allege that as fragmentation of audiences exacerbates competition for advertising investment, content providers face growing pressure to “prove conversion of viewers to customers rather than to show mere ratings” (Skelly and Weiss 2000, 9). Advertisers want more than the opportunity to reach consumers; they want “the tools to close transactions” (Skelly and Weiss 2000, 27). The obvious application of t-commerce is to improve direct-response television by making it convenient and simple for consumers to buy things instantly (Friedman 2011; Huegel 2011; Neff 2011). T-commerce also upgrades traditional advertisements with direct-response capability. The logical trajectory is to integrate purchase-opportunities into program content, such that almost any product seen on television can be bought using a remote control (Gates 1996; Grant 2005). Canoe established a network of corporate partners along the commerce chain, including electronic payment firms, such as PayPal and Delivery Agent, as well as more specialized firms, including BlackArrow, icueTV, and FourthWall Media (“Tcommerce” 2010), whose operations range from software design, to customer analytics, to delivery logistics. Most emblematic of t-commerce potential, Comcast and Time Warner Cable offer subscribers of the Home Shopping Network, a “Shop by Remote” service built on EBIF technology (T. Spangler 2009c). Based on experiences with this service, Comcast claims that t-commerce increases the likelihood of com- pleting an electronic purchase fourfold compared with Internet-mediated shopping portals (T. Spangler 2010d). This is attributed to the simplicity of validating purchases using only a remote control and to the persuasive power of television content (Howe 2009b). These applications are opportunistic, designed to stimulate an urge to buy and then reduce friction to commerce (Vega 2011). A representative from icueTV admits that the firm’s t-commerce interface “lends itself to impulse purchasing” (Baron 2009). Former Canoe CEO, David Verklin explains, “With two clicks of your remote control, this stuff is in your mailbox five days later” (Edwards 2011). In addition to “click-to-buy” applications, advanced advertising techniques augment the production of audiences without requiring viewers to purchase products

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 202 Television & New Media 16(2) immediately. Targeting allows media organizations to earn more advertising revenue per viewer (Reister 2009). According to Forrester Research, marketing executives expressed willingness to spend up to $600 for one thousand viewers targeted with household accuracy, at a time when typical prices were closer to $40 per thousand (Turow 2006, 116). Another study by Forrester supports this assessment, finding that “advertisers value a qualified lead 100 times more than a simple impression” (Skelly and Weiss 2000, 30). A recent study by Forrester and the ANA confirms that nearly three-quarters of marketers surveyed have “strong interest” in behavioral targeting and addressable advertising (“ANA/Forrester” 2012). Verklin (2011a) boasts that interactivity “inherently makes advertising more engaging, utilitarian, and interesting,” whereas addressability “will dramatically improve the relevance [of advertisements]” and persuade consumers toward desirable behaviors. Market trials by Comcast seemed to support this enthusiasm, indicating that addressable advertisements decreased ad- skipping by 38 percent (Reister 2009). Canoe’s first extensive offering was “request for information” (RFI), a form of advanced advertising, which prompts viewers to inquire about products or obtain cou- pons redeemable with participating retailers (T. Spangler 2010a). One report captures the gamut of Canoe’s ambition: “RFI makes it possible for marketers to combine the unparalleled emotional power of television advertising with direct marketing tactics, transforming advertising from monologue to dialogue and moving consumers from intent to action” (“Canoe Honored” 2011). Controlled market research of Canoe’s interactive platform, conducted in partnership with the ANA, indicated that RFI had a significant effect on key marketing metrics (Canoe 2010b; Donohue 2011). Canoe (2011a) published further findings that advanced advertising yielded a 36 percent increase in purchase intention. The validity of this research is dubious; what is significant is the apparent agreement between these results and the normative rationale for a direct marketing model.2 The promise of increasing productivity has continued to pique corporate interest in ITV despite a history of false starts and failures (Kim 2001). Though falling well short of some projections, Canoe has equipped approximately twenty-five million US cable households with the EBIF protocol to support t-commerce and RFI (T. Spangler 2012c). Of Canoe’s financiers, Comcast serves the majority of EBIF-enabled homes (T. Spangler 2010f)—approximately fifteen million (Keller 2012). Comcast offers EBIF applications in fifty designated market areas and has aired more than 1,700 interactive ad campaigns, accounting for 4.5 billion impressions (Keller 2012). Cablevision offers interactive advertising across its entire market of approximately three million homes in the New York City area (Hampp 2009). It has delivered almost four billion interactive impressions over the course of 900 campaigns for 600 clients (Reynolds 2012). Cablevision uses direct marketing techniques to generate “premium” advertising revenue for networks: national marketers such as Unilever pay an extra $100,000 per month for interactive campaigns, including RFIs that allow viewers to order product samples (Goetzl and Mandese 2010).3 Cablevision has successfully tested addressable advertising that targets specific households based on demographic information

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 McGuigan 203 acquired from Experian, a multinational consumer database company (Clifford 2009). After adopting Canoe’s standardized platform in 2011, Cablevision intends to offer full t-commerce capabilities (Winslow 2010). Toward this goal, several of Canoe’s cable partners have hired Rovi, a television software firm, to renovate their interactive program guides into digital catalogues (Friedman 2011). These “shoppable” program guides will be maintained by Delivery Agent, an electronic commerce firm exemplary of the direct marketing paradigm—the company uses “revenue per viewer per epi- sode” as its principal metric (“T-Commerce Deployments” 2011). With a corporate network comprising t-commerce firms, consumer databases, and the largest cable providers in the United States, Canoe Ventures appeared to wield institutional power sufficient to reorganize the television business around an interactive storefront. Pronouncing Canoe “finally on the cusp of transforming advanced advertising into a meaningful reality,” an analyst with Bank of America Merrill Lynch estimated that advanced advertising could be a $14 billion market by 2015 (T. Spangler 2010a). Some forecasters projected annual t-commerce sales to exceed $1.5 billion in coming years (Edwards 2011). However, mere days after publicly touting the potency of its services, as allegedly confirmed by research with the ANA, Canoe announced it would abandon its interactive advertising mandate and dismiss 80 percent of employees (T. Spangler 2012a). Canoe’s pared incarnation now focuses on inserting targeted advertisements in video-on-demand, whereas Comcast and Cablevision, among others, continue to serve interactive advertisements in regional markets and to pursue t-commerce (T. Spangler 2012b; Reynolds 2012). Pundits claimed that Canoe’s operation lacked the scale and simplicity to attract national advertisers. Canoe’s model was incompatible with mass marketing orthodoxy in two interrelated respects: national marketers have entrenched routines of media buying, and their budgets are held to account for reaching the most consumers at the least cost (Creamer 2012). Marketers are not habituated to dealing in the product units of ITV, and without a monopolist to set prices, it is unclear what targeted advertising should cost (“The Buyers” 2010). Canoe struggled to manage the conflicting interests of its cable operators and to cultivate administrative standards for selling t-commerce audiences (Steinberg 2010b; T. Spangler 2011). That Canoe’s partners proceed individually toward the consortium’s goals, however, suggests that advertisers are less apprehensive about direct marketing (Lafayette 2012; T. Spangler 2012c), and rather more reluctant to deal with an industry-level concern invested in infrastructure that seems rigid and cumbersome in an age of media convergence (Howe 2012a). Canoe was caught between the strictures of legacy institutions, such as upfront buying4 and incumbent audience ratings systems, and the antagonistic demands of a nascent direct marketing paradigm.

The Direct Marketing Turn in Audience Production The institutional structure of markets for audiences determines the content and form of advertiser-supported media (Bermejo 2009; Meehan 1984; Napoli 2003; Smythe

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1981). Television audiences are economic products—discrete packages of information, not to be confused with actual viewers (Meehan 1993). The diverse qualities of viewers are aggregated and refined into standardized, commensurable units of measurement. The audience is both a product and structural component of business relationships in commercial television. In particular conditions, these relationships engender particular ways of defining and evaluating audiences—what Philip Napoli (2011, 2) terms “institutionalized” audiences—those that become integrated effectively into the economics of media industries. The need for an “impartial” ratings agency to appraise audiences and set an authoritative currency of exchange exposes an ontological paradox in the audience product: Although audiences are the tangible goods exchanged between media organizations and advertisers, they have no tangible existence outside of these transactions (Maxwell 1991; Shimpach 2005). For content and service providers, the measurability of viewer activity is as important as the activity itself. What is measured is incidental as long as the process yields a saleable product, which buyers judge to be reliable; yet minor adjustments in measurement procedures or audience conceptualizations beget appreciable differences in the size and quality of an audience product (Meehan 1993, 387). Theorizing the audience in this way is vital for understanding that the productive capacity of television depends on how commercial institutions are structured in relation to a (potentially capricious) abstraction. Historically, the US television industry has been organized around an “exposure- based” system in which sponsors buy the opportunity to expose viewers to advertisements and pay broadcasters in accordance with the aggregate size and quality of the anticipated audience (Napoli 2003, 29–30; Lotz 2007a, 552). The real-time measurement and direct-response capabilities of ITV require and allow for different ways of conceptualizing and evaluating audiences than have been typical in the exposure- based model (Andrejevic 2009; Napoli 2011). Joseph Turow (2006, 100) observes that “the mindset of direct marketing” has penetrated the television industry as much as it has the Internet. Instead of counting eyeballs (or inferring attention), emergent business models aspire to measure the performance of advertisements in eliciting responses from viewers. Advertisers recognize that audience information systems can and must account for actual consumption practices (Lotz 2007b, 202), so many are loath to spend money in “the ITV economy” without proof that their advertisement changed consumer behavior toward making a purchase (“The Recursive Ménage à Trois” 2010). Increasingly, marketers target consumers using intimate knowledge of their viewing and shopping histories, and then “measure the actual results of those efforts instead of relying on extrapolated audience estimates” (Vollmer and Precourt 2008, 110). As one media executive explains, “The research has finally gotten to the point where we can do deals that are based on advertising actually working” (Lotz 2007b, 197). A direct marketing model attends to the chief anxieties afflicting commercial television, which generally relate to the risk of not reaching capable consumers and not influencing buying behaviors. Canoe aspired to restructure the institutionalized relations in television around a direct marketing concept of the audience, which would

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 McGuigan 205 both evaluate the probable economic value of individual customers and verify the “closed-loop” between advertising a product and recording a sale. Digital set-top boxes have unmatched technical capacity for collecting and analyzing “granular” (i.e., user-specific and moment-to-moment) data about viewing behaviors (Andrejevic 2002). A chief priority for Canoe Ventures was to institutionalize an audience measurement system based on data from cable set-top boxes (T. Spangler 2009b, 2010b; Steinberg 2008b). Interactive applications provide further insights as viewers engage deliberately with content or a commerce interface. The CEO of icueTV boasts that its t-commerce platform is “Google-esque” because any user activity is reported in real- time to a proprietary analytics database (“icueTV” 2011). Exploiting the data management capabilities of digitized information networks, marketers generate consumer profiles and statistical models of behavior at unprecedented velocity (T. Spangler, Gal-Or, May 2003). By correlating television viewing with records of shopping activity harvested by market researchers, advertisers hope to “understand the effectiveness of media campaigns in driving actual consumer buying behavior” (Friedman 2009). The intended outcome of a partnership between Canoe Ventures and Catalina Marketing, in which Canoe would monitor viewing histories using set-top boxes and Catalina Marketing would monitor purchasing histories with its grocery checkout installations, was to verify that someone from a known household viewed or engaged with a specific interactive advertisement and later purchased the corresponding product (“Tcommerce” 2010). Insofar as commercial television is structured around a “closed-loop” in the marketing of products (Gertner 2005; Skelly and Weiss 2000), the budding relationships among advertisers, systems operators, and market research firms rationalize the production of audiences: more parts of the process are integrated within a communication network, from advertising exposure to marketplace behavior (Andrejevic 2009, 34; Bermejo 2009, 138–141; Napoli 2011, 100–115). To produce audiences and exhort consumption throughout most of the twentieth century, television was a sales agent; today, television is becoming a store.

Direct Marketing and the Audience Commodity Having contextualized the direct marketing turn in audience economics, we can theo- rize Canoe’s production of t-commerce audiences. Critical research on audience manufacture elaborates Dallas Smythe’s pioneering theory of commercial mass media in capitalism. Smythe (1977, 1981) posits that the principal commodity produced by advertiser-supported television is not message content, but rather an audience, which is sold to advertisers. Viewers, assembled as audiences, work for advertisers by self- marketing branded goods, learning proper habits of consumption, and reproducing capitalist social relations. Smythe provoked a debate that is well-documented in critical political economy literature; yet several critiques warrant consideration in relation to productive capacity and direct marketing.

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In a substantive repudiation of the audience commodity thesis, Michael Lebowitz (1986) suggests that Smythe and others mistake commercial media as productive (i.e., producing surplus value). Instead, Lebowitz argues, media function in the sphere of circulation: advertising and marketing communications accelerate the realization of value by expediting product turnover, thereby reducing storage costs and the time capital rests inert. However, Lebowitz does not appreciate that the audience product is an abstract, yet tangibly exchanged assemblage of information about viewers/consumers— a point clarified by Eileen Meehan (1984, 1993). It is argued that media organizations cannot sell the audience because they do not own it; in fact, the audience, as an economic product, does not exist except under ownership of media organizations. Sut Jhally and Bill Livant (1986) argue that viewers work not for advertisers, but for media organizations. They appropriate Marx’s (1976) analysis of capital, which begins with a labor theory of value. Commodities are commensurable because they are products of human labor. Value is the “socially necessary labour-time” required to produce an item. Use-value describes the social utility of an item, and it appears in the marketplace as a relationship between commodities, as an exchange-value. Labor- power is the capacity to work, and capitalists buy it as a commodity. Labor-power trades at its value, which “like that of all commodities is determined by the labour- time necessary to produce it” (Marx 1976, 340)—the time to produce the goods and services needed to regenerate the capacity to work (see Fuchs 2010, 181–184). The use-value of this commodity (“labor”) is the concrete application of the human capacity to produce other commodities with social use-values. Because labor in its application produces more use-values than are socially necessary, some labor-time is surplus. The difference between necessary labor-time and surplus labor-time is the source of surplus value. Jhally and Livant explain television in these terms. The human capacity to watch (watching-power), in its concrete application (watching), generates surplus value for media organizations.5 Program content operates as a wage to exhort viewers to assem- ble into audiences. Necessary watching-time describes the advertising segments that must be watched to recoup programming costs—that is, the necessary cost of making an audience. The remaining time, beyond the cost of programming, is surplus watching- time. To amplify relative surplus value (to decrease necessary time and increase surplus time), media organizations reorganize the watching population and the process of watching. T-commerce attends to both of these strategies.6 Technological changes, as social developments that reorganize the work process, must be exploited to reduce necessary labor-time while maintaining or improving the productivity of labor in its concrete application (Harvey 2006, 87-89). Canoe proposed to use interactive technology to augment the production of audiences—to target bona- fide consumers and market to them directly. More fundamentally, Canoe would mobi- lize viewers who have greater capacity to consume, which comprises both the propensity and ability to buy the products appearing on television. Advanced advertising reorganizes the watching population so that only those viewers with a propensity

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 McGuigan 207 to consume specific products constitute the audience: Canoe hoped to pitch dog food only to dog owners (Hampp 2008; Verklin 2011b). T-commerce services equip viewers with the means of consumption—the technology and marketplace institutions to mediate a commercial exchange. This reorganizes the process of watching around the ability to make a purchase. A targeted, t-commerce audience commands a higher price by virtue of its capacity to consume, so programming costs (the necessary cost of reproducing the capacity to watch) are recovered in less time. In the terms used by Jhally and Livant, capable consumers “watch harder,” meaning they produce audience commodities containing more exchange-value and less value (or necessary time). Targeted and purchase-capable consumers, by watching television—that is, being counted as part of an audience product—for the same time as unknown or incapable consumers, contribute to the production of more surplus value. By such implied calcu- lus, Canoe claimed to increase the productive capacity of television.

Conclusion Commercial television relates mutually to production and circulation: the capacity to produce valuable audiences hinges on the capacity of viewers to consume branded commodities; both capacities are amplified by direct marketing within an interactive storefront. But the development of ITV has been both less revolutionary than touted, and more complex and expensive than expected. The dysfunction of the cable industry, expressed empirically in the case of Canoe Ventures, casts serious doubt on the merits of organizing communication systems around commercial markets for audiences and consumers. Canoe’s apparent failure punctuates at least two points about a general theory of capacity. First, socially embedded business processes impose limits and pressures on social–economic development. An exposure-based, mass marketing system retains traction because it is central to legacy workflows, conventional ways of thinking, and still-profitable revenue models. Established routines, such as upfront buying, have support from Nielsen Media Research, the monopolist in audience ratings, which exercises institutional power comparable with a government agency. In short, direct marketing remains at odds with norms for packaging, appraising, and exchanging audiences (Creamer 2012; T. Spangler 2012a). Second, Canoe was com- pelled to follow the cable industry’s sunk costs and commit investment into existing, arguably outdated, architecture (Howe 2012a). Canoe represented the interests of cable operators and advertising sales managers, which remain moored in habits of thought that regard television as a discrete medium and industry. These points demonstrate the conservative influence of fixed capital and engrained ways of thinking and acting (cf. Parker 1985). We should, however, hesitate to reach definitive judgments about Canoe Ventures. Because it was an industry-level operation, it cannot be appraised as an independent firm. The purpose of Canoe was not to grow its own business, but rather to invest in cable infrastructure and, ultimately, in the productive capacity of television. Although Canoe’s services have not fulfilled the promise of a business model that would verify

Downloaded from tvn.sagepub.com at Cairo University on January 18, 2015 208 Television & New Media 16(2) return on advertising investment, cable operators continue toward the ambition of an ITV storefront (Lafayette 2012; Reynolds 2012). Even in the absence of a formal consortium, developments in ITV in the United States are supported by technical standards and administrative relationships cultivated by Canoe (Ellis 2012; Keller 2012). Canoe invested in t-commerce infrastructure (T. Spangler 2012c); its legacy will become fully apparent only as others try to build on this foundation. The purpose of this study is not to forecast, but to review the blueprints and intellectual supports for these business developments. A theory of productive capacity, using the commodification of audiences and consumer data as an entry point, offers one way to interpret the commercial history of television and to analyze the relationship between business administration and technological intervention. Finally, a general theory of capacity is not confined to “vulgar” economic concerns about the volume and quality of commodity outputs. It invites deliberation about how commercial media relate to institutions of consumption, the social construction of meaning, and the reproduction (or undermining) of cultural formations. Harold Innis (1982, xvii) asked, “Why do we attend to the things to which we attend?” Treatment of this fundamental social-science question requires emphasis on the economic and cultural history of television. A theory of capacity can borrow from Marxist and institutional political economy to be a critical tool in historical materialist studies of communication, technology, and society.

Acknowledgments The author thanks Edward Comor and Vincent Manzerolle for contributing to these ideas. Thanks, also, to the editor and the anonymous reviewers.

Declaration of Conflicting Interests The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding The author disclosed receipt of the following financial support for the research, authorship, and/ or publication of this article: This research was funded in part by the Social Sciences and Humanities Research Council of Canada.

Notes 1. Canoe’s vision of interactive television (ITV) remained dutiful to decades-old prescriptions that position ITV as an enhancement to traditional television and a rival of the Internet (McClellan 2008). 2. Partnering with Canoe and the Association of National Advertisers (ANA) on this research were some of the largest global corporations: Fidelity Investments, GlaxoSmithKline, Honda, Kimberly-Clark, and State Farm (Canoe 2011a). 3. Canoe’s network clients include AMC, Bravo, Discovery Channel, E!, History Channel, and USA Network.

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4. Historically, broadcast networks have sold 75 to 90 percent of advertising time in upfront markets (Lotz 2007b, 158–160). Speculative upfront buying has endured as a cornerstone of the industry since the 1960s (Lotz 2007a, 550). It is a conservative institution wherein transactions are based on legacy commercial relationships. Verklin (2011c) laments that ITV remains absent from this process because ITV formats are unproven and direct marketing metrics seem incompatible with those of upfront buying. In short, the process that defines industry practice is not structured to broker deals for interactive and addressable advertising. 5. Viewer attention cannot be confirmed, so “watching” really means whatever observable activity is counted by an audience measurement system. 6. Relative surplus value is contrasted with absolute surplus value, which is generated by extending total labor-time to create more use-values. In theory, Canoe’s services generate absolute value in two ways: First, “dynamic ad-insertion” (DAI) systems deliver advertisements to known consumers; if we accept that advertisements are wasted when shown to incapable consumers, then DAI creates more commercial time, since the same thirty-second unit can be used to make multiple unique audiences. Secondly, interactive applications, by exhorting measurable responses from viewers, yield additional saleable information about who is watching.

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Author Biography Lee McGuigan (MA, 2011) is a graduate of the Faculty of Information and Media Studies at the University of Western Ontario.

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