Best Practices & Tech Marketing Teams Must Have with Lee Hunt
On this episode, we sat down with Lee to discuss best practices and tech adoptions marketing teams need to know in order to stay on the cutting edge of the digital industry. Lee Hunt is the founder of Lee Hunt, LLC, a New York-based consultancy focusing on brand strategy, media architecture, competitive analysis, and personnel training for television networks and media companies. He's worked at MTV, Turner, VH1, Lifetime and has been on the receiving end of an acquisition for an entertainment company he founded. Needless to say, among the industry, he's considered to be a G.O.A.T. (Greatest Of All Time).
Here are the highlights:
[13:52]: What are your thoughts on large conglomerates, like AT&T and Time Warner, merging. Do you think it's the smart thing to do in order to compete with the Netflix's of the world?
"I think they've all realized that you must have that kind of strength. I really believe the future is going to be vertical portfolios. Last year, 82% of the top fifty networks were controlled by eight media companies and in the next couple of months, it will probably be six. So, if each one of those media companies created a vertical portfolio, a channel essentially, and they've got all their sub-channels underneath it, as a consumer I'm going to buy the NBC, FOX, the Disney grouping, the Discovery grouping, the CBS, and Viacom grouping. I’d pay for six super channels as part of my skinny bundle and I'd still get probably 80-90% of the content I get in a five hundred channel universe."
[18:33]: If you're giving your best consulting advice, what is the #1 thing brands MUST focus on in 2018?
"One word, it’s 'relevancy'. Understanding who your target audience is, make sure that they are available and it's an audience you want and making sure your content or whatever service you're providing is relevant to them."
[22:06]: If you're the president of a television network, what's you're main focus over the next three to six months to make sure you're staying relevant?
"First of all, the normal development cycle of any show is eighteen months to two years. So, you're thinking about what product you have now and how to make it as successful as possible and continue forward. So, it's hard to have that kind of short-term vision, you've got to really be thinking farther out. And I give programmers so much credit to try to anticipate what people are going to like three years from now. I don't know how they do it."
David Brickley [00:00:00]: Alright guys, I'm joined by Lee Hunt. He is the founder of Lee Hunt LLC, a New York based consultancy, focusing on brand strategy, media architecture, competitive analysis and personal training for television networks and media companies. Lee, thanks so much for your time. I appreciate it.
Lee Hunt: Good to be here.
David [00:00:13]: There’s so much you do.
Lee: Yeah, it keeps me pretty busy.
David [00:00:17]: I would like to dig into your history a little bit, because I know you've worked in the industry as a whole and you’ve started companies, you’ve sold companies, you now have Lee Hunt LLC. So, talk to me through a little bit about your background.
Lee: I'm from Texas originally, so I started out working for a public television station in Dallas, which is my hometown.
David [00:00:34]: A cowboy fan or…?
Lee: Yeah, yeah. It runs in the family. I’m like five generations of Texans, so it goes all the way back. So, I worked there for a while and then decided I wanted to get out into the rest of the world. So, I moved up to New York and that was in the early eighties, really the beginning of the cable revolution. And went to work for a company called Satellite News Channel. And they were really CNN’s first competitor, it was a compendium of ABC News and Group W. But it was such an early days of cable that there really wasn't enough distribution, wasn’t enough audience so they couldn't support it. So, eventually Turner bought it out and shut it down and it became what we now know as Headline News; it took that channel space.
So from Satellite News Channel, I went over to Lifetime Television. And Lifetime back then was positioned as talk television because it just had all these different talk shows; it had been a combination of the Cable Health Network and owned by Hearst. So, it was inching while I was working there in on air promotion, and it was talk television because we had like Dr. Ruse and Richard Belzer and Regis Philbin, all doing talk shows all day. And the president of the network who came from the ad sales side, at one point realize you know what, about seventy percent (70%) of our audience is female and he said what if we just made this a network just for women. Now that sounds like a very logical idea now, but back then that was a really radical concept, because why would you disenfranchise fifty one percent of your potential audience? But obviously, it was the right choice and that was actually the first time I got to do a channel brand reposition. So, we went from being talk television to television for women.
And that became very successful and the channel succeeded. From there, I went over to MTV Networks to do a repositioning of VH1.
David [00:02:30]: A lot of different demographics are hopping over this time?
Lee: Yeah, because it was an exploding time in the cable industry and everything was changing and everything was being very niche oriented and everybody was trying to find their place. And VH1 was interesting because it had been created to block another Turner music video channel. Ted had decided he could do what MTV did, because MTV didn't own the content, it came from the record companies. He said, I can do the same thing. So, to block the Turner version of MTV, Viacom…. Well it wasn’t Viacom back then, but MTV Networks created VH1. So, I went in to do one of the repositioning and VH1 has been repositioned so many times. That's always one of the problems of being a step brand, is that you never really have your place, you're always sort of the second tier to the mothership.
So, after VH1, I went down to Atlanta and launched TNT and that really became Turner's flagship. And it was interesting because…
David [00:03:30]: I love everybody over at Turner; good people.
Lee: Yeah, they're really great and it was a wonderful place to work because you're in Atlanta and so it's not exactly the media capital.
David [00:03:41]: Sounds like a very family oriented culture. I don’t know if it was back then, but it’s so far.
Lee: It was in a lot of senses and because you had CNN; it was actually two campuses back then. There was Tech wood and there was CNN Centers. So, CNN was over there and it was really just TBS and TNT and a little bit of Turner Sports at that time. But it was inching because, Ted already had TBS and it was very successful, he was really the first general entertainment cable network out there because he's the first one to take a local station put it up on the satellites, send out the signal all across the U.S.
So, he said well I want to start this second general entertainment channel TNT. And so it was a group of us from New York and L.A. that came down to launch it; and we said, “What do you want this channel to be?” And he said, “Well you know, I created CNN, it's very successful but honestly, CNN is about bad news and I want something that's positive”. And so he talked about sort of this idea, the power of positive programming. At the same time, he had the Goodwill Games, which was very much like the Olympics that he created, teams from different nationalities would all come together like the Olympics every four years and compete for goodwill. And he said, well I want that to be on the channel. I’m like okay, that's two weeks every four years, not exactly going to fill the prime time schedule. But he had also bought the MGM Movie Library, so we were able to take a lot of that… He didn't want to make a movie channel. We took a lot of that different content and put it all together.
And it was funny, in two meetings; in one of them he said, “You know, maybe we should create a movie channel”. There was already American Movie Classics, but so eventually he created Turner Classic Movies. But the funny one, is we're sitting in a meeting with him one day and we've got all these MGM cartoons. And he said, “You know, we should make a cartoon network”. And we thought that was the craziest idea ever, it's like who's going to watch cartoons twenty four hours a day. And again, now it seemed like such an obvious idea, but back then it was so radical. And that was the thing about Ted, he was very good at seeing past the horizon.
David [00:05:46]: Well and I went to Atlanta last year, but there's a hallway where it’s like Ted Turner's timeline of that first satellite to all those… I mean, it's so inspiring to just walk down the hallway to see what an innovator.
Lee: Ted was an amazing man. And it was interesting though, when we were launching TNT, it was sort of a tough time for him because he'd done the MGM deal and pretty much had to hock a lot of the company. And a lot of people said you know, he lost his chops, he made a really bad deal and he was going through a lot of depression. He admitted that he was taking lithium, he was coming up on the anniversary of his father's suicide, he was coming to the same age and he was dating Jane Fonda. It was a lot of things going on then. But he was a really amazing person to work with.
David [00:06:31]: That's incredible man. What a cool story. So, tell me about Lee Hunt LLC and the type of clients you focus on?
Lee: Well, what happened, I had a creative services company all through the nineties. My last job, I worked in program development at MTV and realize I'm not a program person at all. So, when I left MTV in nineteen- ninety (1990), I started Creative Services Agency and that's really when cable was taking off, so it was a good time. We specialize in branding and rebranding and positioning different channels primarily in the U.S but also around the world. Had that for, I guess just about ten years and during the height of the tech boom, Razorfish bought us because it was inching. Two founders and when I asked them, why are you interested in buying us, we're creative services coming to television networks and you're very focused on the Internet? And again, this is nineteen-ninety-nine (1999) and most of the Internet was still tech space, were still images. We didn't have a lot of video at that point. And they said, we really believe that the future of the Internet is going to be video based and we… [Crosstalk]… They were right, but they were about five years a little too early.
So, they bought my company, I worked in their London office for a while. And then when everything sort of fell apart with the internet, I left and I started my consultancy. So, I've been doing that for the last, I guess, seventeen, eighteen years. What I do is pretty much three things; I work on brand strategy for a lot of networks. Everything from, if you remember the USA characters welcome. [Inaudible 00:08:06] that strategy, FX is fearless, hallmark’s the heart of TV. So, trying to find what these different channels stand for. So, that's a big focus. I also do a lot of on air architecture, helping networks figure out how to put together an hour of television to make it as sticky as possible. And then I also do a lot of training for different networks.
David [00:08:26]: That's awesome. So how have you seen the in house versus outsourced mentality? I know this kind of pendulum swings it seems like…
Lee: Yeah, it goes in cycles, is that you'll see a tightening of the belt and they will say, okay we're going to jettison a lot of people but the workload doesn't change. Say, now we need to go outside. So, they start going outside for a while, they go you know it’s really expensive, let's bring it inside. And so, in the forty years I've been in the business, I've seen that side go up and down and up and down.
David [00:08:57]: I think the famous example is Pepsi decides to bring all their marketing and advertisement internal and then the Kendall Jenner ad happened, where they got a lot of… so, it's kind of like sometimes when you don't have that outsourced thought, it could be bad for you. So, I will ask you somewhat to repeat yourself, I apologize in advance but you're kind of known here at Promax-bda for the new best practices. I know you broke that down yesterday, the two thousand and eighteen (2018) best practices. So, for me and the audience, it would be awesome if you can kind of just quickly, not the whole thing but some of the things [crosstalk]….just maybe the top level things that you're really seeing this year.
Lee: Yeah, essentially I sort of broke the presentation in two parts; the first was a focus on cross-platform messaging because we're seeing more and more linear channels recognizing they need to compete with all the different options that people have outside of linear television. And whether it's pushing people to their own app, to an OTT service that they have a relationship with, whether it be a Hulu or all the way to a Netflix where they've sold content. Or actually sending people to MVPD video on demand on their set top box. So, how do you take that linear audience, which is where you're getting the bulk of your money, send them to those platforms efficiently without cannibalizing your linear audience but also make sure you're able to get them back or to move them to another platform. And the behavior is changing so much and so quickly, no one's quite figured out what the best formula is and it continues to develop and grow. And there are some networks who are sort of leading that and others that are that are following and some that haven't quite gotten there. So, we sort of looked at that in examples of how different networks were trying to do it.
David [00:10:37]: So, if you're a network, it seems like you have to, you must kind of play in a different sand boxes of YouTube TV and Hulu as far as rights. But then in light to your point, it almost becomes a conflict of interest because you're making your money on linear, that's where your advertising is, but you're sending people to all these different subsets. Is there a right answer there or right now as we stand you kind of have to just feel it out?
Lee: I don't think there is a right answer yet. We know that most of the networks, their non-linear dollars are made on Video on Demand working with an MVPD, a [crosstalk] operator, satellite operator, cable operator. But that's not necessarily the best place to put their content because they're competing with every other network, and every other show. But if they send people to their app, to their TV everywhere site, there's no other content on that site except there’s. So, they're keeping them in a little bit of a walled garden. So, that’s really better for the brand and also to get people to sample other content that they own, rather than that their competitor owns. So, it's still sort of shaping what's best for the business and what's best for the brand are not necessarily the same thing. One is more the brand is a long term investment and the business is often a short term investment hitting those quarterly numbers.
David [00:11:51]: So, if you're running the television network right now, do you think you almost have to take three steps back in order to take seven steps forward in the future, in terms of how they're paying the bills now and maybe in ten years from now, how they're going to make most of the money?
Lee: Yeah. I don't think it's about taking three steps back, it’s just sort of recognizing there are certain investments that you have to make that in the long run will pay off. And that's tough to do when you’re a publicly traded company.
David [00:12:15]: How big of an issue is that? I see with publicly traded companies, they want those core results, they want to appease their shareholders. And I know, I read an article recently, I think it was on Ad week, about the head of FX and how he's trying to find a way to think three or five years out, which really isn't how most people do it. But it really is a smart way to do it.
Lee: John is probably one of the most brilliant programmers out there, and really understands behavior. He's the one who coined the term Peak TV, with this idea that we're coming to the peak of too much choice in television, nearly five hundred scripted series that we launched just this year that doesn’t even include non- scripted.
David [00:12:55]: With Netflix eight hundred shows alone this year…
Lee: Yeah, it continues to grow and there's a certain point he has predicted where it will begin to collapse. So, he's trying to plan for that and it's interesting, he's sort of part of a system with two different suitors. You've got Disney, which is very good at keeping their brands intact whether it be Marvel or the Star wars brand.
David [00:13:16]: And does FX even fit under that brand, is because it's not as family friendly, a little more edgy…
Lee: I think that what we've seen with Disney, is they've been pretty good at letting brands do what they do best. And then you've got Comcast, which is actually been very good with NBCU and very supportive. Obviously, they’re a technology company first, but they recognize the importance of NBC and all the universal entities being content creators. So, they got two different suitors there with different strings, so it'll be interesting to see which one it ends up with FOX and how FX and John fits into that equation.
David [00:13:52]: I would love to hear your thoughts on these conglomerates merging, obviously with the data plus the original content, AT&T and Time Warner. Do you think that's the smartest way to go, to go up against the Netflixies and LTTs?
Lee: I think they have all realized that you've got to have that kind of strength. And what I really believe, is that the future is going to be vertical portfolios. As I pointed out yesterday that eighty two percent of the top fifty networks are controlled by, last year what was eight media companies and what in the next couple of months probably six media companies. So, if you think, okay if each one of those media companies created a vertical portfolio, a channel essentially and they've got all their sub-channels underneath it, as a consumer I'm going to buy the NBC FOX or the Disney Fox grouping, the discovery scripts grouping, the CBS Viacom grouping, Netflix, Amazon; since Hulu is really sort of a combination of those, that would probably fall out. And I think, okay, I’d pay for six super channels as part of my skinny bundle and I'd still get probably eighty or ninety percent of the content I get in a five hundred channel universe.
David [00:15:06]: You mentioned that you went through that eighties cable revolution that really changed the industry. I think this is a media revolution that we're seeing it right now, do you think it's as serious as the eighties or bigger than the eighties when it comes to that tradition?
Lee: Yeah, it's very different. And really, the eighties and most of the nineties were really about growth. The industry kept growing, advancing, distribution kept growing, viewership kept growing, is that we hadn't reached saturation, we certainly hit that point now. And so that's why we've got people cord shaving, cord cutting, cord nevers, so it's inching. Mike Benson who's the head of marketing for Amazon, talked about…they described the industry right now as a slow motion train wreck. And I think that's a pretty good description because we've hit the top of the ceiling. And so, the ceiling is not going to get any higher, the only way we grow is by expanding horizontally. And that means stretching some things out and unfortunately, it probably means doing it with fewer people because the ceiling is where the revenue grows. If you're growing horizontally, you don't have more revenue but you have more work to do. So, it's a different kind of expansion.
David [00:16:20]: Some of the D Plus players are going to fall off, it sounds like.
Lee: Well they already are, we’re seeing smaller channels begin to drop off and unfortunately a lot of people in the industry losing their jobs with that.
David [00:16:33]: Looking at history, like you got the cable revolution; really start to take off once fortune fives or the brand started to take that seriously and kind of be able to monetize and up those budgets so they had higher quality content hasn't really happened just yet on the digital platforms and branded content starting to happen, but do you think that's going to be the major shift once the advertisers say, this is what we believe in?
Lee: I think so. It was Dawn Ostroff who was speaking and she talked about… and I'm not sure I completely agree with this, but I thought it was a pretty good analogy; how the early days of cable, the content was short and not very good quality because they're just wasn’t the economics force behind it. But as it became more popular, it got longer and became better high quality. And so she compare that to what's going on with digital now. I mean, I think part of it it's a different medium, cable and broadcast are very close to the same medium. Digital is a very different kind of experience in my mind. And it is true that things that have been very short in digital are getting longer, but I don't think it will replicate what happened in television. But I do think we will see the quality go up over time as there is more demand and whether it's on a subscription model, advertising model or some new model no one's figured out yet. It will get better.
David [00:17:46]: When we saw that [RECO] came out with an article…. Twenty- seventeen (2017) was the first time digital advertising outspent linear advertising, which is a huge, huge shift and that's only going to continue to grow. Have you seen, just working with your different clients just more emphasis on digital inventory and rate cards and being able to have more of their partners engrain with their digital side of things, rather than just the linear part?
Lee: Yeah, I think so. You look at, particularly NBCU and how they’ve done their advertising as an entire portfolio rather than individual siloes. So, recognizing that there are different ways to vertically integrate all this different content on all these different platforms and these are very smart people figuring this out. And we're talking about seventy five billion dollars a year industry.
David [00:18:33]: It's a lot of money. So, what do you think the biggest thing brands must focus on as we sit here in twenty eighteen (2018), if you're giving your best consultant advice, like guys you have to make sure that you tackle this…?
Lee: Just one word, it’s “relevancy”. Is understanding who your target audience is, make sure that they are available and it's an audience you want and making sure your content or whatever service you're providing is relevant to them.
David [00:18:56]: Does it go down just to convenience, like focusing on the consumer, their convenience, their time?
Lee: Yeah, certainly. You want to make the experience as easy as possible. One of the things I always talk about in television- ‘inertia’ is our best friend, is that we get somebody watching television, we don't want them to get up and leave. A commercial wants you to get up and go out and buy something. We want you to sit there and just stay watching. So, whatever platform it happens to be and all that comes from the convenience of you know I don't have to stop and think about it.
If you think about for example Comcast X1 box, is that now you don't have to search through the IPG, you just say, “Show me Seinfeld” and it'll take you through the entire list of all the Seinfeld episodes. So, that kind of convenience enable to… because that's the other problem, there's so much content out there, is how do we filter it and even when we do filter it, how do we get to it easily without having to navigate through different screens, different devices, different platforms.
David [00:19:53]: Obviously, you can read a lot of books, you can talk to other people, you can bring consultants but I want to get your thoughts on it. Is there a tool as far as analysis are helping you kind of make those decisions that you've seen in the industry that is helpful for folks who are making these decisions?
Lee: The tools are continually changing. I have a separate service called CMO intelligence and we track the on air marketing of twenty four general entertainment networks plus Netflix, Hulu and Amazon. And our clients find that really interesting to be able to see more and creative level, who's doing what, how much they seem to be spending. And certainly as far as time and also you get a sense of production dollars, but the tools are going to can continually grow and change.
David [00:20:33]: Technology is moving too quickly to kind of keep up with it.
Lee: It is. TiVo introduced a new service and maybe it's not even a service, called TAD, where they can actually with their second by second ratings, look at an individual piece of creative and tell you what the conversion rate; how many people who saw that spot tuned into the show. And they can do that across a campaign. They get even do one of the things that I always consider the Holy Grail, is that we know by ratings and typically second by second ratings when you see a drop, okay somebody left, but where did they go? Most time we have no idea. They’re actually able to track the migration that, okay they left ABC and they went over to FOX. And then, how long do they stay at Fox, when did they come back to ABC or did they ever come back. So, with those kind of tools, as we get more granular it will become much more complicated but we'll be able to know much more.
David [00:21:26]: Do you think Nielsen total ratings will solve that or is that still [crosstalk]…?
Lee: I know Nielson is trying to solve it, [crosstalk] third party companies. It's hard to know who's actually going to figure it out, but it hasn't been figured out yet.
David [00:21:38]: So, if we sit here again until months, hopefully; what do you think the biggest thing that we'll see change over the next twelve months when it comes to the media industry as a whole?
Lee: Well, I think that after this last Monday with the ATT Time Warner as sort of given the green light for everybody else to look at mergers. So, I think you'll see a lot of movement there; some will be successful, some of them won’t. But I think that sense of consolidation will continue for certainly in the next twelve months.
David [00:22:06]: And then if you're a president of a television network today, what's the main thing you're focusing on over the next three to six months that you think you have to figure out to make sure that you stay relevant [crosstalk]?
Lee: I think over the next three to six months is… first of all, the normal development cycle of any show is eighteen months to two years. So, you're thinking about what product you have now and how to make it successful as possible and is it going to continue forward. So, it's hard to have that kind of short term vision, you've got to really be thinking farther out. And I give programmers so much credit to try to anticipate what people are going to like three years from now. I don't know how they do it.
David [00:22:44]: Well, Lee Hunt it’s been a pleasure. Thank you so much for stopping by and we’ve learned a lot. Thank you very much.
Lee: Thank you.