Tuesday, February 28, 2006


CBS announced yesterday that it will begin providing news and alerts for entertainment programming to cellphones on a subscription basis - http://news.com.com/CBS+to+offer+subscription+video+for+phones/2100-1026_3-6043583.html.

One interesting aspect is how this reflects on what is often touted as one of the great strengths of the web – disintermediation. It is said that, with the web, there is no need for the middleman – everyone can deal directly with the source. Is that true? Would that be a good thing? Are we just replacing one set of middlemen (and –women) for another, resulting in re-dis-dis-intermediation?

At the McGraw-Hill Media Summit earlier this month, one participant discussed how Apple has positioned itself as intermediary par excellence via iTunes, yet content providers have realized that they can go directly to the consumer – disintermediation at work. In other words, cacophony in the making.

The CNET article discusses several models for direct and intermediary providers – CBS as direct, Verizon VCast as aggregator and intermediary, and the modern version of Tinkers to Evers to Chance – ABC to Real to Sprint. How do consumers navigate among a multitude of content providers?

Questions for another day: how much video are people consuming on cellphones? What do they really want to see on those devices? Who regulates that content and prevents children (and adults) from inappropriate content? Perhaps most critically in the long run, who controls the screen and the consumers’ choices?

Monday, February 20, 2006

One Ring Tone to Rule Them All

As we proceed down the road of our ever-connected society, it is becoming more difficult – not less – to keep in touch with those around us. I don’t mean that in our time-pressed lives that it is becoming ever-more challenging to make time for the person-to-person interactions that make us human – although that is certainly a problem in and of itself. What I am referring to is that it is getting more difficult to know how to reach someone, due to the multiplicity of electronic communications devices.

Here is the myriad of ways in which I am forced to try to get in touch with my wife, just to let her know what I will be home late for dinner:

> I can call her at home;
> I can call her on her cell phone;
> I can text her on her cell phone;
> I can send her an email to her personal email address;
> I can send her an email to her work email address; or
> I can attach a note to her carrier pigeon (I made this last one up).

Notice that each effort is actually not an attempt to communicate with her. I am actually communicating with a device that is a proxy for communicating with her. In the old days (I will leave the exact definition up to each of you), we communicated with places: you could send a telegram to a location, from which location is would be delivered. You could place a call to a telephone in a particular location. Hopefully your intended recipient was within shouting distance of that phone.

I suppose that the current system is an improvement: I communicate with a device in hopes that the device – being more portable than the telephone attached to your kitchen wall – is in your pocket, hand, purse, etc. Of course, there are multiple devices; some devices may be in a location where a call won’t go through, but text will; and I still have to use a hybrid model: I communicate to both devices and locations in hopes of finding the intended recipient of my earth-shattering message.

Now I realize that there are entrenched players in whose interest it is to continue this nutty system, e.g., the phone/DSL company who profits from every communication effort I listed above (except the pigeon). I’m fine with paying them. I just don’t want to pay them multiple times with no assurance that my message is getting through (I sound like an advertiser).

Maybe the answer is to implant a chip in each of us (the mark of the beast and all that) that will either enable us to reach each other or at least let us know that someone is calling. The endgame – I want to communicate with a person: why should I search numerous locations or, now, numerous devices, just to ask to keep dinner warm until I get home?

Friday, February 17, 2006

The Paradox of Choice

Are we headed toward the world once parodied by Quest in its television commercials: all content ever made available any time any where on any device? Everything will be wireless (p.s.,does anyone ever worry about the amount of electromagnetic radiation with which we are bombarding ourselves? Just asking.) Shall I watch Friends, the Godfather, a wine tasting video, or lectures from MIT? Shall I watch it on my PC, my laptop, my phone, or my big screen TV? Shall I order it from my phone company, my cable company, my electric company (broadband over power lines being right around the corner), the wireless phone provider, or the pizza delivery guy? Or should I just read a book?

One thing that the direct marketing people have learned is that too much choice can paralyze decisionmaking. Vanilla or chocolate? I’ll pick one. Fifty-two thousand flavors – I’m just confused. There is something very retro and passive about linear programming – just sit on the couch and see what programs the networks are pushing at me. The thought of having infinite choice is very seductive, but it also requires a lot of work. While the new world enables me to work 24 hours a day, seven days a week, I’m not so sure that I want to expend a lot of scarce neurons when it comes to deciding my entertainment/information for the evening.

I realize that this is apostasy, but it’s food for thought. Now, let’s talk about your food choices ….

Tuesday, February 14, 2006

Observations from the Media Summit 2006

Media Scrum:
Observations from the 2006 Media Summit

These are highlights and my observations from McGraw-Hill’s 2006 Media Summit New York on February 8 and 9. I have tried to pick out interesting tidbits – items that one doesn’t see reported in the media a hundred times a day. I will not extrapolate any claims about the future and have saved those for my blog, http://mediascrum.blogspot.com.
I also make no claims to being objective or thorough. For example, I have no interest in gaming (blame it on my demographic: almost fiftyish, Asian-American suburban male).

A theme of the Summit was that programming is going on-demand. We will henceforth refer to this as OD, because we are headed for a content overdose. One participant joked that the only area free of media is our sleep, and even that is probably threatened.

In addition to the media model changing from linear programming to OD, there is increasing volatility in business model lifecycles, content providers’ growth and decline, and devices and trends reaching critical mass – and potentially imploding – compared to the past. We have seen rapid adoption of blogs, Skype, and other phenomena at a rate previously unheard of, and others have crashed and burned just as quickly.

Consequently, everyone is making decisions and investments with incomplete information, lack of benchmarks, and very little assessment of causation vs. correlation. Comcast, at least, is leveraging its network to create additional revenue streams, e.g., OD and phone, and making multiple bets on the future of how people want to watch TV, e.g., continuing with linear programming. Verizon, on the other hand, is making a much bigger, and riskier, investment in its network infrastructure in hopes of consumer acceptance.

Some items about consumer behavior:

v People want more control over their media consumption;
v Consumers like the home theater experience; and
v They are willing to pay for access; but
v They are less willing to paying for content, except for material that is especially valuable, e.g., business-related or adult.

There is a resultant rush to capture the consumer market by:

v Providing the most interesting content;
v Being the content aggregator of choice; or
v Controlling the means of delivery – primarily cable or phone lines.

The pure content business models are driven by the multiplicity of consumer choices:

v Branding of content becomes more important; and
v Continual consumer engagement is critical to keep them viewing your content.

Advertising imperatives, however, may be different:

v Consumer engagement with content does not, ipso facto, mean engagement with advertising;
v It’s not clear that engagement with advertising leads to desired consumer behavior; and
v In any case, the ad sales market has not kept pace with the explosion of media, partly because of the business model of siloed advertising sellers or the career imperatives of short-term CMOs.

How did all these trends coalesce at the Summit? The presenters seemed to accept that DVR homes watch more TV, perhaps 20% more. Therefore, it seems that there is greater consumer engagement. If the consumers skip ads, however, their value to advertisers would seem to be reduced, and at least two Summit participants cited the statistic that DVR users skip 80% of ads. The true impact of this would depend on benchmark data that no one had: for how many ads do people leave the room or switch channels even without DVRs? Are the 20% of ads that are watched particularly relevant to those viewers – resulting in extremely effective advertising, or is the 20% made up of people who are too lazy to even skip the ads? It’s hard for the media providers, distributors or advertisers to know definitively what to do next.

Regulatory schemes have not kept pace with either technology or consumer behavior, yet the regulators are confronting entrenched and well-funded players on significant issues:

v What is fair use of content?
· When I buy music, what are the limits, if any, of my rights to listen, replicate, share (or distribute) that content?
· Who should enforce those limits: the content provider? The distributor who sold the music? The hardware manufacturers on whose devices I listen to the music – iPod, PC, car stereo?
v Who should regulate the content I can access over the web and then report on my activity: the Chinese government searching for dissidents? The French government searching for neo-Nazis? The U.S. government searching for terrorists?