January 8, 2020
Joining us on the Marketing Mix Podcast is Eric Kuhn, Co-Founder & CMO at Layer3 TV. In this episode, Eric discusses improving customer experience in the golden age of television, his experience launching the first new cable company of the decade, and how his love for the arts and storytelling earned him a Tony award for producing a Broadway show. In exploring the evolution of one of the most powerful media channels of all time, Eric shares his predictions for the future of television advertising,
Jeff Ragovin: Talk to us a little about Layer3 TV and why T-Mobile acquired it.
Eric Kuhn: There were a bunch of us that came together and we knew that the TV industry was changing. This was 5 or 6 years ago. We were experiencing all these new apps and the emergence of new interfaces. So we thought, what is a space where we all can come together and make the experience better? Well the cable companies are the most hated companies in America. Comcast, Time Warner, and yet people are watching more and more television than ever before. It was the golden age of television. Yet, the experience from a customer's point was terrible. There are all these different platforms and it was very unorganized. It was a consumer’s nightmare. So we thought we would create a bundle but on top of that we’d give you an integrated service that integrates Hulu and Netflix and would be a television experience that was the center of your living room. It would control your nest, your baby cam and it would also deliver 360+ channels.
When we launched, we were the first new traditional cable company to launch in over a decade. We are probably the last cable company to ever launch as well because cable has really changed in the last few years. Consumers have always been uneasy about the bundle but now they think they can just get Disney + and Hulu and coble their own experience together. I think there's still a need to deliver a better user experience. It turns out to be a real mess to find shows. T-Mobile wanted to get into the video space, they acquired us about 2 years ago. And that was the journey of Layer3. We launched in 5 cities across America and it was an amazing experience to understand how people consume content and how they interact with their television.
Jeff Ragovin: Do you still think that TV is the single best way to market to people even with the rise of social media?
Eric Kuhn: People talk about digital strategy and TV is digital too. I think TV is just one thing in the arsenal you need across platforms. You have to make sure the message is being hit across these platforms. What’s become easier and what our company has helped push forward is targeting those people. Netflix knows exactly who you are. And those set top boxes...now if you are getting cable can really begin to pinpoint the type of person and profile you are. So I think TV advertising is getting more specific.
Jeff Ragovin: With connected TV and advertising, what is going to happen? Are we going to get more targeted, better messaging?
Eric Kuhn: Well, I think the other thing is that people are watching TV differently. So now advertisers need to think about how they are going to serve up those ads. For instance, Hulu is thinking if you watch 3 hours of content back to back, maybe we should serve up an advertisement at the end of those 3 hours that’s a little different than a 30 second spot that’s in between and breaking up your commercials. Maybe we should reward the consumer for sitting on that platform for 3 hours. So I think as viewers habits change, advertising needs to change also. Because the ad of a 23 minutes sitcom should be very different than an ad served to the consumer after 3 hours of binging. The consumer's mind and how they ingest all this content is so different right now.
Jeff Ragovin: So I have a question for you entirely opinion based. Every clip I see on the news sites like CNN have an ad. And it’s annoying...I would rather just pay sometime online fee that allows me to digest content without ads. Same goes for Facebook videos that are cut in half with a video commercial. What do you think of this?
Eric Kuhn: I’ve been talking about entertainment, everything from Friends to The Crown. News is a different animal. I think the News is still having trouble responding to consumers. I think there is still this notion in people’s minds that news should be free. News is great for the subscription model so maybe this should be our new startup idea.
Jeff Ragovin: Anything we should be looking at into the future, anything new coming that we should pay attention to, any predictions?
Eric Kuhn: Just in the past month or two, we’ve seen Disney + come in and get a ton of subscribers. They always say content is king but distribution is up there saying, ‘Wait a minute, maybe I should be king’. And I think there is always going to be this battle between distribution and content. I worry about two things. I worry that consumers get fatigued with the content that they are watching. If someone says this to me one more time, ‘You just have to get past the first 3 episodes and then it gets good’ or someone says ‘You just have to get past season 1 before it gets good’. I’m thinking that’s ten hours of my day. I wonder when the day will come when consumers say give me the good content from day 1. I wonder if consumers will revolt and at some point. And then I still go back to the dream we had when we created Layer3 which is how do you make the user experience easy? I can’t tell you how many nights I’ve tried to find content and it was too difficult and I fell asleep. So we have to make that experience better too.
Jeff Ragovin: Thank you for joining the Marketing Mix Podcast.
Please note, the above has been paraphrased for editorial purposes