The cost of developing programs has been ballooning for both networks and production companies.
In ‘MBA terms’ I came to see the current inflated state of the development process as a ‘market imperfection’ for which there should be an immediate and track-able solution that lowers the cost and risk.
My researches led me to Media Predict, a company with a proven, new online ‘prediction market’ methodology for qualifying the likely success or failure of television program concepts.
The New York-based company is led by highly qualified veteran execs from Nielsen and related research fields. Several U.S. networks are clients.
And I recently set up the BLINC -Media Predict partnership in London: we are already working on a promising trial with a leading UK network.
This week’s post: my introduction to an exciting, new addition to the program developer’s toolbox. To learn more about Media Predict, send me an email.
“Nobody knows anything,” William Goldman famously wrote in Adventures in the Screen Trade.
“Not one person in the entire motion picture field knows for a certainty what’s going to work. Every time out it’s a guess.”
The phrase has become a truism in media.
Despite our modern technology and research, even today a huge amount of new content flops – and production companies and programmers are left stabbing in the dark when looking for their next hit.
But a new research company, Media Predict, is proving that – collectively – we might know something after all.
By tapping the so-called “wisdom of the crowds,” Media Predict is making steps toward cracking the mystery of finding good content.
How they do it may raise eyebrows. In a moment I’ll look at the blend of quantitative and qualitative research they produce through – you’re hearing it right – something a lot like futures trading.
But the company’s results may be all that executives need to know:
- If Media Predict endorses a show, which it does often well before the green-light, the show will go on to perform above average 86% of the time.
- If their system pans a given show, often before the green-light, it will go on to perform below average 91% of the time.
- Media Predict’s pre-greenlight recommended shows have averaged 118% of the average premiere audience size on the target network.
- Not-recommended shows averaged only 80% of the average premiere audience size on the target network.
Is it a crystal ball? No.
- But the method may well be establishing itself as a vital tool in any programmer’s toolkit.
- The company is testing both scripted and non-scripted shows for a variety of broadcast and cable clients in the U.S and now U.K.
Of course, research is supposed to have all of these problems solved.
- Via test audiences and focus groups, decision makers have always tried to get a read on what might work with audiences.
- But false positives abound, and focus groups usually only help programmers weed out their least promising options.
Prediction Market Methodology
In light of that, Media Predict threw traditional research methods out the window.
- Instead of paying people to answer survey questions, Media Predict gives study participants their money right off the bat.
- Then the company asks them, in effect, to place bets on how well show ideas might perform.
- If participants make a good bet, they make even more money. If participants are wrong, they lose it.
The idea is that profit motives make every participant tell the truth, instead of just clicking through a survey willy-nilly. Then – just like on Wall Street – market dynamics take over.
- If a hidden gem is undervalued, people will start buying shares, and projections will go up.
- If a projection for a big blockbuster is getting too high, short-sellers will step in and bring it back down to earth.
This “prediction market” methodology has been producing results for some time.
- The Iowa Electronic Markets, a research project at the University of Iowa, have used market trading to forecast the outcomes of political elections for over 24 years.
- Their results have outperformed the AP and the Gallup polls throughout that time – especially when predicting from 100 days away or more.
“The Following” – Spotting Winners … and Duds
Such long-range forecasting is probably the method’s strongest suit, Media Predict says.
- Last winter, the company opened trading on an edgy thriller for a major broadcast network.
- Prices spiked immediately, and then those prices went up even higher once it was revealed that Kevin Bacon would play the lead.
- That show of course became FOX’s “The Following.”
- And Media Predict’s audience estimates from almost a year away were correct within 1%.
But Media Predict is even better at spotting shows destined to fail.
- If Media Predict gives the thumbs-down to a show idea, the resulting product performed below average 91% of the time on the target network.
The tool is not just for showpiece programs on the big nets:
- While audience estimates are more precise for networks averaging over a million viewers, directionally the tool can spot winners and losers for smaller nets as well.
- Over 45 tests for a non-fiction network, audience sizes for Media Predict-recommended on average were a remarkable 207% of shows that Media Predict panned.
- Media Predict doesn’t claim to produce perfect predictions every time.
- But for many clients, the insights of the marketplace will be more than enough.
- Media Predict’s qualitative information, for example, identifies what elements of a show are driving the really big bets – young men might be buying shares because of a title, while women might be driven by cast or a recent promotional campaign.
- If key elements change, like the title or cast, Media Predict will alert the community, and – just like a jobs report hitting Wall Street – the market will immediately adjust to the new reality.
- All along, the truth-serum of financial incentive gives these insights real credence.
Nobody knows anything, the saying goes. And it’s been hard to dispute. But Media Predict is indicating that – with enough people, working collectively – the marketplace might know something after all.
The Media Predict methodology is applicable to networks, larger-scale production companies and distributors, investors, governments, foundations and non-profit funders, and other users of qualitative and quantitative research.
April 30, 9:30 AM
Courtney Sexton, VP Documentary, Participant Media
JC Mills, Director of development, National Geographic
Lizzie Kerner, Director of development & acquisitions, CNN
Moderator: Peter Hamilton
WHAT DO BROADCASTERS WANT?
- What are broadcasters looking for?
- How do you work with them?
- Get the latest scoop directly from network reps.