President Obama held a news conference last night, essentially to commemorate the first 100 days of his administration. This was seem by presumably everyone in America who was not watching Fox, which declined to provide prime-time access for this event. Seems rather churlish to me - after all, where would sister network Fox News be if it weren't for the fodder provided by the President and his triumphs, foibles, failings, pet musings, and all the rest that passes for news these days.
Granted, 100 days is a rather meaningless, arbitrary benchmark, but it does at least provide an occasion for some level of reflection - as NYC Mayor Ed Koch used to say, "How'm I doin'?"
So, how do you think he's doin'? And what do you make of the fact that he is more popular than his policies? Does that mean that his personal qualities will help eventually sell his less-popular policies or do you think that his personal charm will wear off and the cold harsh reality of his policies and the public discomfort with them will prevail?
Thursday, April 30, 2009
Saturday, November 08, 2008
Peter Chernin, News Corp., on Innovation and Media
Peter Chernin, President and Chief Operating Officer of News Corp., was the keynote interviewee at TelevisionWeek’s Innovation 360: The Game Changers conference last week in Manhattan. These are MediaScrum’s notes of his comments:
Innovation, the topic of the conference, is critically important to the success of all businesses, a sentiment with which hardly anyone would disagree. Successful innovation, however, requires clear insight and discipline, which is often lacking.
First of all, innovation must to be pursued constantly, during both good times and bad. It may be tempting to scale back on innovation, either because things are going well – who needs it? – or things are going poorly – we can’t afford it. Either path, however, will leave companies critically short of necessary innovation when it is most needed during times of major business disruption, which leads to the other element of required discipline.
The second element is to recognize that legacy businesses may well be reaching the end of their lifespan. Old businesses should be maximized, not defended. Only by applying resources to new opportunities, despite the decline of old businesses, can innovation drive the business forward.
Innovation’s critical importance can be seen in three major areas impacting the media business: motion pictures, the ongoing SAG labor dispute, and digital media.
Movies:
For motion pictures, quantum leaps in high-tech innovation have historically had a corresponding impact on the level of viewer interest in movies. The phenomenal success of “Titanic,” the highest-grossing move of all time, was driven in large part by the astonishing quality of the special effects.
The technologies that have such an impact are those that benefit the story-telling of the movie and the sense of wonder and astonishment of the audience. Technologies whose purpose is cost-cutting or more efficient delivery, such as digital projection, whose impact is transparent to the viewer, are important but not transcendent in the same way.
The next innovation to have a giant impact on moviemaking will be the mainstreaming of 3-D. James Cameron, the director of “Titanic,” together with Fox, has spent the last ten years developing “Avatar,” his showcase 3-D motion picture. While the concept and early efforts at 3-D movies began at least fifty years ago, it is only now that the technologies underlying production, editing and viewing have reached the stage that 3-D can be fully integrated into the storytelling, rather than merely being a interesting gimmick. Not only has it taken Cameron ten years to bring his movie to fruition, but he filmed several 3-D documentaries along the way in order to help perfect the technology.
“Avatar” and its progeny are expected to have a significant impact on the motion picture industry. IMAX’s 3-D movie versions have demonstrated the audience appetite for 3-D. Movies that are produced in native 3-D, with the narrative and other elements developed for that format, will be the next giant leap in movie technology.
Labor:
The Screen Actors’ Guild (SAG) is the only creative guild that has not reached an agreement with the television and movie production community. To compound matters, internal disputes within SAG, particularly as expressed in a recent election for Guild board members, have been quite prominent in recent news reports.
Comments on this topic have been the most heavily reported in the news media since the conference, often in a much harsher light than viewed by this observer. Whether Chernin’s comments were of the “iron fist in a velvet glove” variety or simply that the news media likes a good fight, was not clear.
In any event, the producers are in quite a strong position, with the solid backing of the business community. Furthermore, the creative community has, in general, made an uneasy peace with the future uncertainty, at least for now, and is probably unwilling to have the last participants – SAG – benefit from their efforts at reaching a entente with the producers – much as drivers don’t appreciate someone who tries to take a shortcut to the exit by bypassing the cars that have been patiently waiting their turn in the exit lane.
Digital:
MySpace has been key to News Corp.’s efforts in the digital arena, although not in the way that observers had expected. The conventional wisdom at the time of the MySpace purchase by News Corp. was that it would become “Fox-ified.” The true value of MySpace has been, however, to provide News Corp. a window into consumer needs and behavior in the online world.
In a world in which consumers have infinite choices for entertainment, media companies must provide vehicles that allow consumers to exercise that choice, rather than trying to restrict it, but in a profitable way.
Entertainment media is different from music, which has been devastated by the shift to digital distribution and is struggling to find a new business model. One of the underlying problems in the music business model is that it was predicated on the sale of entire albums, even when consumers only wanted to purchase certain songs – a restriction of consumer choice. Given the opportunity – legally or illegally – to obtain only the songs desired, consumers did so – record companies’ business model notwithstanding. Fortunately for movies, people tend to consume the entire product, not merely portions. Technological issues, such as bandwidth needs for bit-heavy video vs. audio and the length of movies vs. music, have prevented piracy from being as much of a problem for movie producers as it has been for the record companies, at least so far.
That being said, the advent of digital distribution of entertainment content has been challenging to other parts of the media business. Hulu, the video portal co-owned by NBC and Fox, for example, has been a reasonable success since its launch earlier this year. Online viewing of full-length episodes of broadcast television programming has apparently been used by consumers to replace viewing of reruns, but not of network first-run programming. Players in the media food chain dependent on rerun viewing, or even off-net syndication, may find themselves being squeezed by the new business model, just as record stores were collateral damage in the woes suffered by the record companies.
Advertising, however, has of course been under pressure from the changes in technology across the media landscape, and this has a direct impact on media companies such as News Corp. Experiments with new ad models for the digital world are still a work in progress.
Fortunately, News Corp. will continue to feed the public interest in consuming media, no matter the distribution channel. For example, News Corp. views MySpace and Hulu as social “media” outlets which encourage peer reviewing and sharing of content. Facebook is seen as more social “networking” with greater emphasis on interpersonal relationships.
Eventually, traditional media will develop the advertising models for digital platforms.
The interview can be seen at: http://www.tvweek.com/news/2008/10/video_chernin_on_the_challenge.php
Innovation, the topic of the conference, is critically important to the success of all businesses, a sentiment with which hardly anyone would disagree. Successful innovation, however, requires clear insight and discipline, which is often lacking.
First of all, innovation must to be pursued constantly, during both good times and bad. It may be tempting to scale back on innovation, either because things are going well – who needs it? – or things are going poorly – we can’t afford it. Either path, however, will leave companies critically short of necessary innovation when it is most needed during times of major business disruption, which leads to the other element of required discipline.
The second element is to recognize that legacy businesses may well be reaching the end of their lifespan. Old businesses should be maximized, not defended. Only by applying resources to new opportunities, despite the decline of old businesses, can innovation drive the business forward.
Innovation’s critical importance can be seen in three major areas impacting the media business: motion pictures, the ongoing SAG labor dispute, and digital media.
Movies:
For motion pictures, quantum leaps in high-tech innovation have historically had a corresponding impact on the level of viewer interest in movies. The phenomenal success of “Titanic,” the highest-grossing move of all time, was driven in large part by the astonishing quality of the special effects.
The technologies that have such an impact are those that benefit the story-telling of the movie and the sense of wonder and astonishment of the audience. Technologies whose purpose is cost-cutting or more efficient delivery, such as digital projection, whose impact is transparent to the viewer, are important but not transcendent in the same way.
The next innovation to have a giant impact on moviemaking will be the mainstreaming of 3-D. James Cameron, the director of “Titanic,” together with Fox, has spent the last ten years developing “Avatar,” his showcase 3-D motion picture. While the concept and early efforts at 3-D movies began at least fifty years ago, it is only now that the technologies underlying production, editing and viewing have reached the stage that 3-D can be fully integrated into the storytelling, rather than merely being a interesting gimmick. Not only has it taken Cameron ten years to bring his movie to fruition, but he filmed several 3-D documentaries along the way in order to help perfect the technology.
“Avatar” and its progeny are expected to have a significant impact on the motion picture industry. IMAX’s 3-D movie versions have demonstrated the audience appetite for 3-D. Movies that are produced in native 3-D, with the narrative and other elements developed for that format, will be the next giant leap in movie technology.
Labor:
The Screen Actors’ Guild (SAG) is the only creative guild that has not reached an agreement with the television and movie production community. To compound matters, internal disputes within SAG, particularly as expressed in a recent election for Guild board members, have been quite prominent in recent news reports.
Comments on this topic have been the most heavily reported in the news media since the conference, often in a much harsher light than viewed by this observer. Whether Chernin’s comments were of the “iron fist in a velvet glove” variety or simply that the news media likes a good fight, was not clear.
In any event, the producers are in quite a strong position, with the solid backing of the business community. Furthermore, the creative community has, in general, made an uneasy peace with the future uncertainty, at least for now, and is probably unwilling to have the last participants – SAG – benefit from their efforts at reaching a entente with the producers – much as drivers don’t appreciate someone who tries to take a shortcut to the exit by bypassing the cars that have been patiently waiting their turn in the exit lane.
Digital:
MySpace has been key to News Corp.’s efforts in the digital arena, although not in the way that observers had expected. The conventional wisdom at the time of the MySpace purchase by News Corp. was that it would become “Fox-ified.” The true value of MySpace has been, however, to provide News Corp. a window into consumer needs and behavior in the online world.
In a world in which consumers have infinite choices for entertainment, media companies must provide vehicles that allow consumers to exercise that choice, rather than trying to restrict it, but in a profitable way.
Entertainment media is different from music, which has been devastated by the shift to digital distribution and is struggling to find a new business model. One of the underlying problems in the music business model is that it was predicated on the sale of entire albums, even when consumers only wanted to purchase certain songs – a restriction of consumer choice. Given the opportunity – legally or illegally – to obtain only the songs desired, consumers did so – record companies’ business model notwithstanding. Fortunately for movies, people tend to consume the entire product, not merely portions. Technological issues, such as bandwidth needs for bit-heavy video vs. audio and the length of movies vs. music, have prevented piracy from being as much of a problem for movie producers as it has been for the record companies, at least so far.
That being said, the advent of digital distribution of entertainment content has been challenging to other parts of the media business. Hulu, the video portal co-owned by NBC and Fox, for example, has been a reasonable success since its launch earlier this year. Online viewing of full-length episodes of broadcast television programming has apparently been used by consumers to replace viewing of reruns, but not of network first-run programming. Players in the media food chain dependent on rerun viewing, or even off-net syndication, may find themselves being squeezed by the new business model, just as record stores were collateral damage in the woes suffered by the record companies.
Advertising, however, has of course been under pressure from the changes in technology across the media landscape, and this has a direct impact on media companies such as News Corp. Experiments with new ad models for the digital world are still a work in progress.
Fortunately, News Corp. will continue to feed the public interest in consuming media, no matter the distribution channel. For example, News Corp. views MySpace and Hulu as social “media” outlets which encourage peer reviewing and sharing of content. Facebook is seen as more social “networking” with greater emphasis on interpersonal relationships.
Eventually, traditional media will develop the advertising models for digital platforms.
The interview can be seen at: http://www.tvweek.com/news/2008/10/video_chernin_on_the_challenge.php
Tuesday, July 15, 2008
Re: Obama, The New Yorker Displays Its New Yorky-ness
Amid all the brouhaha over the New Yorker's latest cover, which depicts Barack and Michelle Obama as America-hating, flag-burning, big-haired, terrorist-loving armed black militants, the argument seems to boil down to whether the cover is offensive or it's let's-not-take-ourselves-so-seriously satire. The crux of the matter is that it boils down to context, audience and timing.
This being MediaScrum, this imbroglio is certainly a scrum and it's being played in, and about, the media. If this is indeed satire, the New Yorker is assuming everyone gets the joke - we all know that Barack is not a Muslim, loves our country, the fist bump is not a coded terrorist signal, etc. But let's face, this is New York, where some apocryphal dowager expressed disbelief in the election of Nixon (or Reagan, depending on who's telling the story) by exclaiming, "How could he have won? I don't know anyone who voted for him!" In other words, of course, everyone is in on the joke - or are they?
What percentage of the American voting public is not going to purchase the New Yorker but simply see the cover displayed on television and in the press and therefore have it confirm existing prejudices or raise lingering questions about Obama's patriotism, trustworthiness and so on? There was an excellent op-ed in the New York Times on June 27, "Your Brain Lies to You": http://www.nytimes.com/2008/06/27/opinion/27aamodt.html?_r=1&scp=1&sq=aamodt&st=nyt&oref=slogin. A pair of neuroscience experts points out that over time, you forget where you first learned about a false statement, and you may eventually forget that it is false. Therefore, the key is not refuting a false statement; it's preventing the false statement from being made in the first place. A quote attributed to Churchill summed this up nicely, "A lie can travel halfway around the world before the truth can put on its shoes." In six weeks, a substantial (and scary) percentage of the public will swear up and down that they saw a photo that proves Barack and Michelle are Muslim terrorists!
If the New Yorker wanted to satirize misperceptions about Obama, it should have done so AFTER the election. Then we could all have had a good laugh - we're so dumb we elected a Muslim terrorist as our president, ha, ha! Doing it now feeds the confusion of an electorate so misguided that voters are opposed to Obama both because he is Muslim AND because of his nut-job Christian minister! Talk about cognitive dissonance!
This being MediaScrum, this imbroglio is certainly a scrum and it's being played in, and about, the media. If this is indeed satire, the New Yorker is assuming everyone gets the joke - we all know that Barack is not a Muslim, loves our country, the fist bump is not a coded terrorist signal, etc. But let's face, this is New York, where some apocryphal dowager expressed disbelief in the election of Nixon (or Reagan, depending on who's telling the story) by exclaiming, "How could he have won? I don't know anyone who voted for him!" In other words, of course, everyone is in on the joke - or are they?
What percentage of the American voting public is not going to purchase the New Yorker but simply see the cover displayed on television and in the press and therefore have it confirm existing prejudices or raise lingering questions about Obama's patriotism, trustworthiness and so on? There was an excellent op-ed in the New York Times on June 27, "Your Brain Lies to You": http://www.nytimes.com/2008/06/27/opinion/27aamodt.html?_r=1&scp=1&sq=aamodt&st=nyt&oref=slogin. A pair of neuroscience experts points out that over time, you forget where you first learned about a false statement, and you may eventually forget that it is false. Therefore, the key is not refuting a false statement; it's preventing the false statement from being made in the first place. A quote attributed to Churchill summed this up nicely, "A lie can travel halfway around the world before the truth can put on its shoes." In six weeks, a substantial (and scary) percentage of the public will swear up and down that they saw a photo that proves Barack and Michelle are Muslim terrorists!
If the New Yorker wanted to satirize misperceptions about Obama, it should have done so AFTER the election. Then we could all have had a good laugh - we're so dumb we elected a Muslim terrorist as our president, ha, ha! Doing it now feeds the confusion of an electorate so misguided that voters are opposed to Obama both because he is Muslim AND because of his nut-job Christian minister! Talk about cognitive dissonance!
Sunday, July 13, 2008
“How Publishers Are Taking Back Control of Their Brands with Scalable and Profitable Online Advertising Strategies”
On Thursday, July 9, I had the opportunity to listen to a panel assembled by ContextWeb, the primary ad network for our StoneHorse online publishing sites. The event was:
“How Publishers Are Taking Back Control of Their Brands with Scalable and Profitable Online Advertising Strategies,” with Wenda Harris Millard co-CEO and President of Media, Martha Stewart Living Omnimedia; Sean Muzzy Senior Partner, Media Director;
Ari Brandt General Manager - Digital Media, Conde Nast Business Media Group; and
William Morrison Partner, Sr. Internet Analyst, ThinkPanmure; with Randall Rothenberg President, IAB, as moderator.
With the disclaimer that my notes should not be considered a full, or even particularly accurate, record of the opinions, facts, fables and other thoughts expressed by the participants, let’s begin!
Anand Subramanian, CEO of ContextWeb, opened the event. He tried to reconcile the seemingly contradictory situations of advertisers complaining that there is not enough available online ad inventory while publishers complain that they cannot fill their inventory. The conclusion Anand reached was that there is not enough of the right inventory and there is, unfortunately, too much of the inventory that no advertisers want. Closing this gap was the main theme of the discussion that followed.
Randall Rothenberg, CEO of the IAB, viewed the macro problem as a conflict between advertisers’ desire for scale, most likely a habit ingrained from many years of reliance on television, and their desire for the targeted relevance of the ad placements made especially possible by online advertising.
The question he posed to the panel: Are online ad networks the solution? If so, how should we deal with the struggle between branded online publications and online ad networks?
Wenda Harris Millard, the chair of the IAB along with being the co-CEO of Martha Stewart Omnimedia, characterized the conflict as being between “pork bellies and diamonds.” In her view, the ad networks started as the equivalent of retail outlet centers, dealing in commoditized distressed and remnant inventory and based primarily on price – “pork bellies” – as opposed to the “diamonds” of premium branded online content. She felt, however, that ad networks are evolving into the online equivalent of luxury shopping centers – essentially multi-branded upscale retail destinations. So to her, the question is how far along the path have they come?
[Note: Ms. Millard’s discussion on topics covered at this seminar and other issues can be viewed in an interview with Kara Swisher of D: All Things Digital on the ContextWeb site: http://blog.contextweb.com/contextual/wenda-harris-millard-featured-on-allthingsdcom.]
Bill Morrison, an analyst at the Think Panmure boutique investment bank, attributed the growth of ad networks to the fragmentation of media, particularly online. His research showed that there are 160 million websites, of which 50 to 60 million are active, and approximately 1% are being monetized. Even at those low levels of activity, that still leaves 1.6 million websites contending for dollars, largely advertising.
The ad networks, in Bill’s view, grew in response to publishers’ need for revenue and advertisers’ inability to deal directly with the plethora of websites. The number of ad networks has grown in response to this marketplace need: there are now over 300 ad networks, compared to only 100 in 2003.
As the market has grown, networks have begun specializing beyond simple commodity sales. Bill felt, however, that there is yet no effective market for what he calls "premium secondary" inventory.
Multiple vertical ad networks aggregate sites with similar content. Through such aggregation, these networks are challenging the content leaders who seek to garner premium rates for their inventory on the strength of their brand and depth of their content.
ContextWeb, the host of the morning’s event, has a slightly different model, having constructed what are in effect “synthetic networks” of pages of related content, regardless of the editorial direction of the underlying sites.
Bill argued that the networks addressed other challenges faced by publishers beyond simply a means to garner advertising which they might not otherwise have the resources to reach. Another issue could be what Bill referred to as “inventory bursting,” i.e., volatility of traffic that is hard to predict and could prevent the matching of inventory to traffic.
Wenda raised what seems to be the key issue among branded publishers – that ad networks can create the commodization of online ad inventory: it's all about price, like TV. I was a little surprised at that last comment, as it had always seemed to me that television inventory, at least at the network level, avoided commodization by differentiating itself by quality of programming, demographic targeting, and buzz in general, such as premium pricing for events like the Super Bowl and the Oscars. Furthermore, if television is unable to avoid commoditized pricing, online probably stands even less of a chance, unless targeting or other techniques can demonstrate superior ROI to TV.
Ari Brandt, the general manager of Portfolio.com, took a different tack. He contended that his property is not competing on scale. It wasn’t clear whether this was an actual strategy or simply making a virtue out of necessity, with properties such as CNN/Money being clear leaders in the financial news and analysis categories. Ari viewed the mission of Portfolio.com to be that of empowering business leaders with online tools, although he did not go into much detail. He also said that Portfolio.com took a lighter approach to news, which would seem to be similar to that of the magazine itself.
All in all, he professed to be very satisfied with success of Portfolio.com, having 3 million unique visitors and 8 million page views monthly 15 months after launch, with a heavily male and affluent audience.
After the brief comments by each of the panelists, Randy Rothenberg asked: why are people replicating television metrics in their efforts to assess online advertising, such as reach and frequency?
Wenda agreed with the underlying premise of Randy’s question and said that her efforts at IAB included resisting the wholesale transfer of metrics from other media to online. Furthermore, as scale will continue to be a key objective of advertisers, she felt that television is becoming less important every year. She argued that digital media will eventually replace television, as magazines, which previously might have been a contender, can not provide the scale advertisers require.
For online, leveraging its unique strengths such as behavioral targeting combined with contextual relevance is key. She compared the online advantages to the mass “spray and pray” approach of television.
Bill Morrison commented that audience composition is as important as scale, another factor that would seem to favor online, particularly with regard to upscale audiences.
I asked the publishers on the panel about the importance of integrated marketing, particularly as a way to avoid the commoditization of online advertising through the creation of custom and multimedia packages not easily sold via a network. Wenda contended that advertisers were looking for true value creation in partnership with the publishers and that pricing was often the last concern, not the first. She also indicated that it was an advantage to have multiple media distribution channels, such as print, TV, radio, and the others available to MSO, as opposed to the online-only limitations at Yahoo!, her previous employer.
Randy next asked whether branded networks are an ad play or a content play. Wenda said that her objective is to serve her customers, particularly with regard to the branded network created under the Martha Stewart brand. She pointed out that MSO alone can not provide all of the content that their customers want, and that the Martha network enables them to extend their content reach. She cautioned the audience, however, that it is important to properly "curate" one’s network sites to guarantee the quality, both for advertisers and customers, and that not all networks do so.
When Randy asked about the relative values of new versus old branded networks, Bill seemed to indicate that it was not a critical distinction. He cited the example of Glam, which built a vertical ad network first, then built an owned-and-operated content site. In other words, it did the exact reverse of the MSO strategy.
Along the lines of extending content reach to provide quality inventory to advertisers, Randy cited the recent purchase by CBS of CNET which was done to expand its group of sites and build out its network of content, not just for ads.
Bill indicated that having such qualified content under a publisher’s umbrella was important in that IAB publishers, generally the largest publishers, accounted for 80% to 90% of total online ad revenue. The ad networks, on the other hand, while holding a market share of 10% to 15%, are growing much faster than the publishers, at a 30% annual clip.
A member of the audience asked about the widgetizing of content as a distribution channel, with or without ads. Ari seemed to view that as a likely further development, and cited Google Gadgets – a business travel widget – that has been syndicated across the Google platform.
Randy summed up the morning by saying that the keys to maintaining price include having trusted brands, providing a good consumer experience, and generating big ideas that create results. Hard to argue with that.
“How Publishers Are Taking Back Control of Their Brands with Scalable and Profitable Online Advertising Strategies,” with Wenda Harris Millard co-CEO and President of Media, Martha Stewart Living Omnimedia; Sean Muzzy Senior Partner, Media Director;
Ari Brandt General Manager - Digital Media, Conde Nast Business Media Group; and
William Morrison Partner, Sr. Internet Analyst, ThinkPanmure; with Randall Rothenberg President, IAB, as moderator.
With the disclaimer that my notes should not be considered a full, or even particularly accurate, record of the opinions, facts, fables and other thoughts expressed by the participants, let’s begin!
Anand Subramanian, CEO of ContextWeb, opened the event. He tried to reconcile the seemingly contradictory situations of advertisers complaining that there is not enough available online ad inventory while publishers complain that they cannot fill their inventory. The conclusion Anand reached was that there is not enough of the right inventory and there is, unfortunately, too much of the inventory that no advertisers want. Closing this gap was the main theme of the discussion that followed.
Randall Rothenberg, CEO of the IAB, viewed the macro problem as a conflict between advertisers’ desire for scale, most likely a habit ingrained from many years of reliance on television, and their desire for the targeted relevance of the ad placements made especially possible by online advertising.
The question he posed to the panel: Are online ad networks the solution? If so, how should we deal with the struggle between branded online publications and online ad networks?
Wenda Harris Millard, the chair of the IAB along with being the co-CEO of Martha Stewart Omnimedia, characterized the conflict as being between “pork bellies and diamonds.” In her view, the ad networks started as the equivalent of retail outlet centers, dealing in commoditized distressed and remnant inventory and based primarily on price – “pork bellies” – as opposed to the “diamonds” of premium branded online content. She felt, however, that ad networks are evolving into the online equivalent of luxury shopping centers – essentially multi-branded upscale retail destinations. So to her, the question is how far along the path have they come?
[Note: Ms. Millard’s discussion on topics covered at this seminar and other issues can be viewed in an interview with Kara Swisher of D: All Things Digital on the ContextWeb site: http://blog.contextweb.com/contextual/wenda-harris-millard-featured-on-allthingsdcom.]
Bill Morrison, an analyst at the Think Panmure boutique investment bank, attributed the growth of ad networks to the fragmentation of media, particularly online. His research showed that there are 160 million websites, of which 50 to 60 million are active, and approximately 1% are being monetized. Even at those low levels of activity, that still leaves 1.6 million websites contending for dollars, largely advertising.
The ad networks, in Bill’s view, grew in response to publishers’ need for revenue and advertisers’ inability to deal directly with the plethora of websites. The number of ad networks has grown in response to this marketplace need: there are now over 300 ad networks, compared to only 100 in 2003.
As the market has grown, networks have begun specializing beyond simple commodity sales. Bill felt, however, that there is yet no effective market for what he calls "premium secondary" inventory.
Multiple vertical ad networks aggregate sites with similar content. Through such aggregation, these networks are challenging the content leaders who seek to garner premium rates for their inventory on the strength of their brand and depth of their content.
ContextWeb, the host of the morning’s event, has a slightly different model, having constructed what are in effect “synthetic networks” of pages of related content, regardless of the editorial direction of the underlying sites.
Bill argued that the networks addressed other challenges faced by publishers beyond simply a means to garner advertising which they might not otherwise have the resources to reach. Another issue could be what Bill referred to as “inventory bursting,” i.e., volatility of traffic that is hard to predict and could prevent the matching of inventory to traffic.
Wenda raised what seems to be the key issue among branded publishers – that ad networks can create the commodization of online ad inventory: it's all about price, like TV. I was a little surprised at that last comment, as it had always seemed to me that television inventory, at least at the network level, avoided commodization by differentiating itself by quality of programming, demographic targeting, and buzz in general, such as premium pricing for events like the Super Bowl and the Oscars. Furthermore, if television is unable to avoid commoditized pricing, online probably stands even less of a chance, unless targeting or other techniques can demonstrate superior ROI to TV.
Ari Brandt, the general manager of Portfolio.com, took a different tack. He contended that his property is not competing on scale. It wasn’t clear whether this was an actual strategy or simply making a virtue out of necessity, with properties such as CNN/Money being clear leaders in the financial news and analysis categories. Ari viewed the mission of Portfolio.com to be that of empowering business leaders with online tools, although he did not go into much detail. He also said that Portfolio.com took a lighter approach to news, which would seem to be similar to that of the magazine itself.
All in all, he professed to be very satisfied with success of Portfolio.com, having 3 million unique visitors and 8 million page views monthly 15 months after launch, with a heavily male and affluent audience.
After the brief comments by each of the panelists, Randy Rothenberg asked: why are people replicating television metrics in their efforts to assess online advertising, such as reach and frequency?
Wenda agreed with the underlying premise of Randy’s question and said that her efforts at IAB included resisting the wholesale transfer of metrics from other media to online. Furthermore, as scale will continue to be a key objective of advertisers, she felt that television is becoming less important every year. She argued that digital media will eventually replace television, as magazines, which previously might have been a contender, can not provide the scale advertisers require.
For online, leveraging its unique strengths such as behavioral targeting combined with contextual relevance is key. She compared the online advantages to the mass “spray and pray” approach of television.
Bill Morrison commented that audience composition is as important as scale, another factor that would seem to favor online, particularly with regard to upscale audiences.
I asked the publishers on the panel about the importance of integrated marketing, particularly as a way to avoid the commoditization of online advertising through the creation of custom and multimedia packages not easily sold via a network. Wenda contended that advertisers were looking for true value creation in partnership with the publishers and that pricing was often the last concern, not the first. She also indicated that it was an advantage to have multiple media distribution channels, such as print, TV, radio, and the others available to MSO, as opposed to the online-only limitations at Yahoo!, her previous employer.
Randy next asked whether branded networks are an ad play or a content play. Wenda said that her objective is to serve her customers, particularly with regard to the branded network created under the Martha Stewart brand. She pointed out that MSO alone can not provide all of the content that their customers want, and that the Martha network enables them to extend their content reach. She cautioned the audience, however, that it is important to properly "curate" one’s network sites to guarantee the quality, both for advertisers and customers, and that not all networks do so.
When Randy asked about the relative values of new versus old branded networks, Bill seemed to indicate that it was not a critical distinction. He cited the example of Glam, which built a vertical ad network first, then built an owned-and-operated content site. In other words, it did the exact reverse of the MSO strategy.
Along the lines of extending content reach to provide quality inventory to advertisers, Randy cited the recent purchase by CBS of CNET which was done to expand its group of sites and build out its network of content, not just for ads.
Bill indicated that having such qualified content under a publisher’s umbrella was important in that IAB publishers, generally the largest publishers, accounted for 80% to 90% of total online ad revenue. The ad networks, on the other hand, while holding a market share of 10% to 15%, are growing much faster than the publishers, at a 30% annual clip.
A member of the audience asked about the widgetizing of content as a distribution channel, with or without ads. Ari seemed to view that as a likely further development, and cited Google Gadgets – a business travel widget – that has been syndicated across the Google platform.
Randy summed up the morning by saying that the keys to maintaining price include having trusted brands, providing a good consumer experience, and generating big ideas that create results. Hard to argue with that.
Friday, July 11, 2008
comScore's Top 50 U.S. Web Properties for May 2008
comScore announced the top 50 U.S. web properties for May, based on the Media Metrix data: http://www.comscore.com/press/release.asp?press=2270
Nielsen Releases Report on 3-Screen Usage
Nielsen has released its latest report on media consumption: "Television, Internet and Mobile Usage in the U.S." The 4-page report can be found at: http://www.nielsen.com/pdf/3_Screen_Report_May08_FINAL.pdf
Sunday, October 21, 2007
Skate to Where the Puck Is, Not Where It Used to Be
Wayne Gretzky supposedly attributed his success to ordinary players “skating to where the puck is” while he “skated to where the puck is going.” (A tip of the hat to one of my favorite professors, John Greening of Medill) Of course, if it were that easy, we’d all be in the Hockey Hall of Fame. Fortunately, sometimes it isn’t even that complicated.
If everyone else is skating to where the puck used to be, then all you have to do is skate to where it is now. I realize that this sounds absurd, but look at the state of marketing today.
You would think (hope? expect? assume?) that marketing dollars follow consumer behavior. But, no. Changes in marketing spending seem to be a lagging indicator, not a leading indicator or even a current indicator. A recent Booz Allen Hamilton study for the Association of National Advertisers found that the 80% of Americans who are online spend as much time on the Web as they do television, yet marketers spend only 5%-10% of their ad budget on digital media.
Their plan to snap into action is to increase their digital marketing spending by 2010 – most of them, anyway. One hopes that despite the wording of the question, they are planning to increase their spending in 2008 and 2009, and not wait until 2010.
This inertia has been noticed elsewhere. A Forrester study released last week found that business-to-business marketers also indicated that they are responding to the behavioral shift of their customers to the internet with less than alacrity. Fortunately, that is not always the case: Intel was quoted in the New York Times that it is shifting ad dollars to the web because “We’re going where the consumers have gone.”
I would expect two things to happen as a result: marketers who are early to the web will gain market share which they may be able to hold against latecomers and the shifting of ad dollars will greatly accelerate the revenue growth rate of ad-oriented websites. Let’s see if this happens, and I’m also assuming that advertising on the web is effective, but that’s a topic for another day.
If everyone else is skating to where the puck used to be, then all you have to do is skate to where it is now. I realize that this sounds absurd, but look at the state of marketing today.
You would think (hope? expect? assume?) that marketing dollars follow consumer behavior. But, no. Changes in marketing spending seem to be a lagging indicator, not a leading indicator or even a current indicator. A recent Booz Allen Hamilton study for the Association of National Advertisers found that the 80% of Americans who are online spend as much time on the Web as they do television, yet marketers spend only 5%-10% of their ad budget on digital media.
Their plan to snap into action is to increase their digital marketing spending by 2010 – most of them, anyway. One hopes that despite the wording of the question, they are planning to increase their spending in 2008 and 2009, and not wait until 2010.
This inertia has been noticed elsewhere. A Forrester study released last week found that business-to-business marketers also indicated that they are responding to the behavioral shift of their customers to the internet with less than alacrity. Fortunately, that is not always the case: Intel was quoted in the New York Times that it is shifting ad dollars to the web because “We’re going where the consumers have gone.”
I would expect two things to happen as a result: marketers who are early to the web will gain market share which they may be able to hold against latecomers and the shifting of ad dollars will greatly accelerate the revenue growth rate of ad-oriented websites. Let’s see if this happens, and I’m also assuming that advertising on the web is effective, but that’s a topic for another day.
Tuesday, October 09, 2007
VNRs Under the Gun (Again)
Successful industries go through phases during their lives, just as human beings do. An industry can be innovative and successful at the outset. Eventually, however, the environment may change significantly, and the business must adapt or perish.
The video news release (VNR), a tool in the broadcast PR or electronic publicity business, has been increasingly threatened due to a tightening regulatory environment. The legal underpinnings of the VNR business are based on a Congressional mandate requiring news outlets to disclose the origin of third-party material, with a limited-or-no disclosure exception for material provided to news outlets at no charge.
Continuing controversy over the nuances of these restrictions has resulted, in the latest instance, in the Federal Communications Commission proposing to fine Comcast $4,000 for airing a VNR without appropriate disclosure. The FCC claims that there was “too much focus on the product or brand name in the programming.” Wasn’t that the point of the VNR in the first place?
The VNR industry, in the form of the National Association of Broadcast Communicators (NABC), is reduced to arguing “against requiring disclosure,” which is a policy-oriented position. After all, there is nothing to prevent Congress from changing the law to require disclosure in all circumstances.
The continuing efforts of the Center for Media and Democracy (CMD) and Free Press ensure that this issue will not go away. CMD claims to have identified 140 additional instances of disclosure violations, and there is speculation that the FCC’s move against Comcast are the first of many pending actions, including possible disclosure of product placements. After all, Nielsen proclaimed Coke the top product placement of the first half of 2007 with 3,054 occurrences. The second-ranked Pussycat Dolls Lounge Nightclub recorded a mere 750 mentions. Sounds like fertile ground for an FCC investigation.
The VNR industry must either win in the court of public opinion or find alternate ways to meet the needs of its clients.
The video news release (VNR), a tool in the broadcast PR or electronic publicity business, has been increasingly threatened due to a tightening regulatory environment. The legal underpinnings of the VNR business are based on a Congressional mandate requiring news outlets to disclose the origin of third-party material, with a limited-or-no disclosure exception for material provided to news outlets at no charge.
Continuing controversy over the nuances of these restrictions has resulted, in the latest instance, in the Federal Communications Commission proposing to fine Comcast $4,000 for airing a VNR without appropriate disclosure. The FCC claims that there was “too much focus on the product or brand name in the programming.” Wasn’t that the point of the VNR in the first place?
The VNR industry, in the form of the National Association of Broadcast Communicators (NABC), is reduced to arguing “against requiring disclosure,” which is a policy-oriented position. After all, there is nothing to prevent Congress from changing the law to require disclosure in all circumstances.
The continuing efforts of the Center for Media and Democracy (CMD) and Free Press ensure that this issue will not go away. CMD claims to have identified 140 additional instances of disclosure violations, and there is speculation that the FCC’s move against Comcast are the first of many pending actions, including possible disclosure of product placements. After all, Nielsen proclaimed Coke the top product placement of the first half of 2007 with 3,054 occurrences. The second-ranked Pussycat Dolls Lounge Nightclub recorded a mere 750 mentions. Sounds like fertile ground for an FCC investigation.
The VNR industry must either win in the court of public opinion or find alternate ways to meet the needs of its clients.
Friday, October 05, 2007
No Soup for You!
So, I'm wrapping up a 9-day road trip during which I've gone to the InterBike (I have no idea what that name means!) bicycle trade show in Las Vegas, the Podcasting and New Media Conference in Ontario, California (for which I drove 50 miles out of my way to claim a $40 webcam I won in a sweepstakes), the TurnPRon conference in San Francisco, and assorted other meetings. Enough is enough; it's time to go home.
After a long trip, I just want to get something to eat during the 2 hours I'm waiting for my flight at San Francisco airport. Eureka! I spot a little Japanese restaurant as I'm walking to security. I've had a craving for udon soup on this trip - I tried a bowl in Las Vegas and another one in LA. This will round out my epicurean sampling.
I have said from the very beginning that airports are funny animals. There are lots of reasons for this, and one big reason is security, which rears its ugly head and interferes with my culinary journey. Flash of unpleasant insight! Soup is a liquid, at least the last time I checked. I confirm this gustatory tidbit with the helpful clerk - soup is not allowed through security. Someone must have said that Japanese soup can be explosively hot, and TSA took them at their word. On the other hand, the clerk said that sauces are okay. I just won't tell security that the teriyaki tofu is dynamite!
After a long trip, I just want to get something to eat during the 2 hours I'm waiting for my flight at San Francisco airport. Eureka! I spot a little Japanese restaurant as I'm walking to security. I've had a craving for udon soup on this trip - I tried a bowl in Las Vegas and another one in LA. This will round out my epicurean sampling.
I have said from the very beginning that airports are funny animals. There are lots of reasons for this, and one big reason is security, which rears its ugly head and interferes with my culinary journey. Flash of unpleasant insight! Soup is a liquid, at least the last time I checked. I confirm this gustatory tidbit with the helpful clerk - soup is not allowed through security. Someone must have said that Japanese soup can be explosively hot, and TSA took them at their word. On the other hand, the clerk said that sauces are okay. I just won't tell security that the teriyaki tofu is dynamite!
Monday, November 13, 2006
Jack Myers on Advertising, via NY:MIEG
I've been attending the networking sessions launched this year called the New York Media and Information Exchange Group. It's hosted by my friend Bill Sobel, who seems to know everyone worth knowing. The sessions are attended by a great group of folks with some terrific speakers.
The last session, on November 9, featured Jack Myers, the editor and publisher of the Myers Report. It was a very insightful talk, centered on the question: audiences are ad-oriented, but where's the revenue?
Jack started with CBS sales and marketing for their TV stations. At the time, Teletext and videotext were expected to be the big revenue streams of the future. Cable was expected to be a small business since the prevailing use of cable at the time was merely to improve reception. Jack, however, saw much greater potential in cable and its proliferation of content, especially having grown up in Utica which had only one station in 1962.
He tried to convince stations to ally themselves with cable for news production. He also worked with UTV, which tried to create interactivity with TV stations via telephone for games and shopping, before moving into consulting for advertisers.
He now feels that the nature of change is itself changing: everyone now expects change; they are not resisting as they had in the past. Furthermore, changes are happening at an exponential rate.
First there are the incipient signs of change coming, then it happens quickly, as with the fall of the Berlin Wall, which was the culmination of many years of decline in the Soviet Bloc. Advertising last year declined at the networks by 3% and at the stations by 5%. While some of the decline may be due to lack of elections and the Olympics, advertising is no longer growing in line with GDP. Even the growth in online ad spending is declining to only 20% next year.
Instead, advertising dollars are going to smaller, unique applications such as movies and Wal-Mart’s TV network, which are considered to provide better ROI and be closer to the point of purchase.
In addition, search advertising has peaked, especially since click fraud will be a problem for the foreseeable future. Online video does not have enough inventory, while traditional media is over-supplied. Magazines, however, seem to be making a comeback, with Proctor & Gamble announcing that it is going back to magazine advertising.
In general, the old patterns and cycles will not repeat, and instead new patterns are emerging. This is the most disruption in advertising that he has seen in 25 years.
Virtual worlds are the next wave, as described in the recent New York Times article about Second Life: http://query.nytimes.com/gst/fullpage.html?sec=travel&res=9F06E3D8133FF930A35752C1A9609C8B63. The next generation will view the Virtual World as real, such that he suggests referring to the Physical World rather than the Real World, to distinguish it from the Virtual World.
The measurement of advertising will also change, in this case away from mass audiences. The quality of the eyeballs will be more important. Currently, commercial ratings do not measure quality or engagement.
Cable CPM has leveled off at 60% of broadcast CPMs. The Internet has allowed itself to become commoditized at a $2 CPM. Furthermore, auction models are developing via web to sell mass market ads, causing further commoditization.
Jack is focusing on Emotional Connection Research. Broadcast TV is better than ever, in terms of creativity, production and technology. Advertisers, however, are still moving away from TV in order to be more targeted. Marketers want media to encourage relationships with consumers and are moving away from the mass market, industrial method. In keeping with that development, ad agencies will move from the siloed model to an integrated approach. New entrepreneurial shops will emerge.
The strongest brands will be multi-platform, whereby the brands can carry their audiences across multiple media.
Advertising and marketing is moving into a Relationship Age and away from the Industrial Age. As a result, corporate schizophrenia is developing due to the need to operate in both the Physical and Virtual Worlds, similarly to amphibians that needed to live in the sea and the air. Yet the Physical World constitutes 90-95% of the environment, while marketers need to invest in the 5-10% that is made up of the Virtual World despite Industrial Age pressures created by Physical World structures and Wall St.
Q: TV viewing on new devices.
Home PC equipment is in its early stages in comparison to TV viewing, but the direction seems clear. At this point, 32% of NBC's programs are on the Internet. Advertising is moving to new formats, such as 5, 10 and 15 second ads.
In general, the broadcast networks are responding better than had originally been expected. Going forward, the DVD windows for TV programs will become shorter, and networks will post shows on the Web even before broadcast.
Small screens will suffice depending on the circumstances; mobile is just another video platform.
Q: Measurement across multiple platforms.
Sales are the best measure. Other techniques are in development: IAG Research is testing next day recall, and Jack has his Emotional Connections platform. The industry is probably 10 years away from good answers to these questions.
Q: Who has done well in the Relationship World?
L’Oreal is probably the most effective at integrating marketing across platforms. Within NeoPets, McDonald’s has successfully introduced French fries as the pets’ favorite foods. Pharmaceutical companies are been using iVillage effectively but have not extended their efforts beyond that. Media agencies are behind the curve – they are trying but they are not being compensated by their clients for developing new platforms.
Q: Valuations of new platforms.
Jack estimated a $1 billion price tag for Second Life. Venture capitalists are making mistakes, however. They are looking for technology in an environment where there is no protection for technology and investing in some companies who happened to get lucky. Similar to a vein of gold, the viral strains are subject to too much competition and will tap out. Venture capitalists are not investing in experience, content, consumers or an understanding of market dynamics. They are also not lining up with management due to their desire to maintain control. Jack feels that we are in a bubble in that venture capitalists are in the “hits” business rather than that of building infrastructure for the long term.
Q: How to help marketers find their audiences.
It’s best to build an audience and then take that audience to the appropriate marketers, as Daily Candy has done. Marketers are not interested in investing to build audiences.
Q: Impact of technology on advertising.
The old assembly-line model made it easy to buy mass audiences, and some of the new technology-based techniques, such as Ad Sense and Spot Runner, are further commoditizing ad buys. Google is actually becoming the largest traditional media company. Ad growth is flat, projected to be 6-7% this year and 4% next year. In general, it will grow with GDP.
Jack lamented the absence of today’s Ted Turner, Bill Paley and David Sarnoff – people who develop completely new concepts for marketers.
The last session, on November 9, featured Jack Myers, the editor and publisher of the Myers Report. It was a very insightful talk, centered on the question: audiences are ad-oriented, but where's the revenue?
Jack started with CBS sales and marketing for their TV stations. At the time, Teletext and videotext were expected to be the big revenue streams of the future. Cable was expected to be a small business since the prevailing use of cable at the time was merely to improve reception. Jack, however, saw much greater potential in cable and its proliferation of content, especially having grown up in Utica which had only one station in 1962.
He tried to convince stations to ally themselves with cable for news production. He also worked with UTV, which tried to create interactivity with TV stations via telephone for games and shopping, before moving into consulting for advertisers.
He now feels that the nature of change is itself changing: everyone now expects change; they are not resisting as they had in the past. Furthermore, changes are happening at an exponential rate.
First there are the incipient signs of change coming, then it happens quickly, as with the fall of the Berlin Wall, which was the culmination of many years of decline in the Soviet Bloc. Advertising last year declined at the networks by 3% and at the stations by 5%. While some of the decline may be due to lack of elections and the Olympics, advertising is no longer growing in line with GDP. Even the growth in online ad spending is declining to only 20% next year.
Instead, advertising dollars are going to smaller, unique applications such as movies and Wal-Mart’s TV network, which are considered to provide better ROI and be closer to the point of purchase.
In addition, search advertising has peaked, especially since click fraud will be a problem for the foreseeable future. Online video does not have enough inventory, while traditional media is over-supplied. Magazines, however, seem to be making a comeback, with Proctor & Gamble announcing that it is going back to magazine advertising.
In general, the old patterns and cycles will not repeat, and instead new patterns are emerging. This is the most disruption in advertising that he has seen in 25 years.
Virtual worlds are the next wave, as described in the recent New York Times article about Second Life: http://query.nytimes.com/gst/fullpage.html?sec=travel&res=9F06E3D8133FF930A35752C1A9609C8B63. The next generation will view the Virtual World as real, such that he suggests referring to the Physical World rather than the Real World, to distinguish it from the Virtual World.
The measurement of advertising will also change, in this case away from mass audiences. The quality of the eyeballs will be more important. Currently, commercial ratings do not measure quality or engagement.
Cable CPM has leveled off at 60% of broadcast CPMs. The Internet has allowed itself to become commoditized at a $2 CPM. Furthermore, auction models are developing via web to sell mass market ads, causing further commoditization.
Jack is focusing on Emotional Connection Research. Broadcast TV is better than ever, in terms of creativity, production and technology. Advertisers, however, are still moving away from TV in order to be more targeted. Marketers want media to encourage relationships with consumers and are moving away from the mass market, industrial method. In keeping with that development, ad agencies will move from the siloed model to an integrated approach. New entrepreneurial shops will emerge.
The strongest brands will be multi-platform, whereby the brands can carry their audiences across multiple media.
Advertising and marketing is moving into a Relationship Age and away from the Industrial Age. As a result, corporate schizophrenia is developing due to the need to operate in both the Physical and Virtual Worlds, similarly to amphibians that needed to live in the sea and the air. Yet the Physical World constitutes 90-95% of the environment, while marketers need to invest in the 5-10% that is made up of the Virtual World despite Industrial Age pressures created by Physical World structures and Wall St.
Q: TV viewing on new devices.
Home PC equipment is in its early stages in comparison to TV viewing, but the direction seems clear. At this point, 32% of NBC's programs are on the Internet. Advertising is moving to new formats, such as 5, 10 and 15 second ads.
In general, the broadcast networks are responding better than had originally been expected. Going forward, the DVD windows for TV programs will become shorter, and networks will post shows on the Web even before broadcast.
Small screens will suffice depending on the circumstances; mobile is just another video platform.
Q: Measurement across multiple platforms.
Sales are the best measure. Other techniques are in development: IAG Research is testing next day recall, and Jack has his Emotional Connections platform. The industry is probably 10 years away from good answers to these questions.
Q: Who has done well in the Relationship World?
L’Oreal is probably the most effective at integrating marketing across platforms. Within NeoPets, McDonald’s has successfully introduced French fries as the pets’ favorite foods. Pharmaceutical companies are been using iVillage effectively but have not extended their efforts beyond that. Media agencies are behind the curve – they are trying but they are not being compensated by their clients for developing new platforms.
Q: Valuations of new platforms.
Jack estimated a $1 billion price tag for Second Life. Venture capitalists are making mistakes, however. They are looking for technology in an environment where there is no protection for technology and investing in some companies who happened to get lucky. Similar to a vein of gold, the viral strains are subject to too much competition and will tap out. Venture capitalists are not investing in experience, content, consumers or an understanding of market dynamics. They are also not lining up with management due to their desire to maintain control. Jack feels that we are in a bubble in that venture capitalists are in the “hits” business rather than that of building infrastructure for the long term.
Q: How to help marketers find their audiences.
It’s best to build an audience and then take that audience to the appropriate marketers, as Daily Candy has done. Marketers are not interested in investing to build audiences.
Q: Impact of technology on advertising.
The old assembly-line model made it easy to buy mass audiences, and some of the new technology-based techniques, such as Ad Sense and Spot Runner, are further commoditizing ad buys. Google is actually becoming the largest traditional media company. Ad growth is flat, projected to be 6-7% this year and 4% next year. In general, it will grow with GDP.
Jack lamented the absence of today’s Ted Turner, Bill Paley and David Sarnoff – people who develop completely new concepts for marketers.
Thursday, August 31, 2006
Playtime is Over, Get Back to Work!
I had a momentary bit of peace, quiet and tranquility this morning - my children are back to school. Now I can make phone calls without being asked, "Who are you talking to?" "What are you talking about?" "Why?"
With great power, however, comes great responsibility - as Spider-man was told. Now that I have the potential for productivity, it's time to get serious about work.
By the same token, now that we're all enjoying ourselves watching wacky videos on the web - Mentos and Diet Coke, George Allen putting his foot in his mouth, an amorous couple trying to have sex on a (literally) hot stove - the web needs to get serious also. In this case, how to make money. Between now and the Christmas (excuse me, Holiday) season, video on the web will continue to grow exponentially and viable business models will begin to emerge. Partly, this will occur because those without business models will disappear.
Next week, the true fun begins!
With great power, however, comes great responsibility - as Spider-man was told. Now that I have the potential for productivity, it's time to get serious about work.
By the same token, now that we're all enjoying ourselves watching wacky videos on the web - Mentos and Diet Coke, George Allen putting his foot in his mouth, an amorous couple trying to have sex on a (literally) hot stove - the web needs to get serious also. In this case, how to make money. Between now and the Christmas (excuse me, Holiday) season, video on the web will continue to grow exponentially and viable business models will begin to emerge. Partly, this will occur because those without business models will disappear.
Next week, the true fun begins!
Tuesday, August 01, 2006
How Many Idols Can We Have, Anyway?
I'm not a religious guy, but I seem to vaguely remember a Commandment about false idols (ok, so I googled "Ten Commandments"). But what about real idols? Let's see, we have American Idol, RockStar: SuperNova, So You Think You Can Dance, America's Got Talent (or not), and a couple of shows that ABC already cancelled. I thought American Idol was painful to watch; the others are worse, with their manufactured anguish and tension.
Some wit said that in the future, we will all have our 15 megabytes of fame. That's at least 14 megabytes too many.
Someone else had worried that our economy would devolve into us flipping burgers for each other. That will also not happen - instead, we will each be starring on a reality "talent" show while watching everyone else on other talent shows.
I love televison; I just can't stand what's on it.
Some wit said that in the future, we will all have our 15 megabytes of fame. That's at least 14 megabytes too many.
Someone else had worried that our economy would devolve into us flipping burgers for each other. That will also not happen - instead, we will each be starring on a reality "talent" show while watching everyone else on other talent shows.
I love televison; I just can't stand what's on it.
Saturday, June 03, 2006
The Latest Media Device for Workaholics
I tend to be a multi-tasker on my PC and usually have at least six functions open simultaneously - Palm OS, Internet Explorer, Excel, Word, Adobe Acrobat and Visio - with multiple files open for each of those. Therefore, I spend a lot of time clicking back and forth between applications and files. Sometimes I am working on two or more screens simultaneously and have to constantly switch back and forth - cutting and pasting, referencing, etc. It used to drive me nuts - although I was probably already nuts.
I came across a great little device to help me in my manic work style: the Tritton See2:
http://www.trittontechnologies.com/products/TRIUV100.htm#Description. It lets me connect a second monitor through a USB port. Since I am generally using 2 email accounts, I can open one email account on each monitor and just pass my cursor from one to the other. If I am working on a document and need to review reference materials, I open the main document on my laptop screen and the other documents on my auxiliary screen.
This is the best toy I've bought since my Treo 600. While it feeds my ADD tendencies - reading two screens simultaneously - I find that it 's a lot better than toggling among IE windows. I almost feel lost when I'm on the road with my laptop, bereft of my 2nd screen.
Wednesday, May 24, 2006
The Tivo Trojan Horse
The key to business success in the 21st Century is flexibility.
For a while, Tivo looked like it was going to be victim of the changing business environment. Just as the word "Tivo" was becoming generic, a la Kleenex and Xerox, the business was in danger of becoming extinct. Users seemed to love the functionality, but competitors figured out that Tivo was nothing more than a video-enabled hard drive, a model that was easily copied.
Cable MSOs, and particularly Tivo's "partner" DirectTV, realized that they could build DVRs - the new generic term - into their set-top boxes. Tivo looked like it was going to go the way of its former direct competitor Replay, which sank without a trace.
Now Tivo is trying to deliver proprietary content and functionality - downloading programming and becoming a bridge between the internet and the TV. If they can do that successfully, Tivo becomes more than just another box sitting in your TV console; it becomes THE BOX through which you receive all your non-linear programming. Of course, it still has to contend with the other boxes - Akimbo, Moviebeam, etc. - that are trying to make the same leap.
This battle is going to get ugly, and all I can say for sure is that not everyone will survive.
For a while, Tivo looked like it was going to be victim of the changing business environment. Just as the word "Tivo" was becoming generic, a la Kleenex and Xerox, the business was in danger of becoming extinct. Users seemed to love the functionality, but competitors figured out that Tivo was nothing more than a video-enabled hard drive, a model that was easily copied.
Cable MSOs, and particularly Tivo's "partner" DirectTV, realized that they could build DVRs - the new generic term - into their set-top boxes. Tivo looked like it was going to go the way of its former direct competitor Replay, which sank without a trace.
Now Tivo is trying to deliver proprietary content and functionality - downloading programming and becoming a bridge between the internet and the TV. If they can do that successfully, Tivo becomes more than just another box sitting in your TV console; it becomes THE BOX through which you receive all your non-linear programming. Of course, it still has to contend with the other boxes - Akimbo, Moviebeam, etc. - that are trying to make the same leap.
This battle is going to get ugly, and all I can say for sure is that not everyone will survive.
Monday, May 08, 2006
The Report from NAB 2006
The presentations at NAB2006 focused on the migrating of content to on-demand platforms, both television and web. There were three basic themes, intentional and otherwise:
I. The pace of technology change is accelerating, and the shift to on-demand is becoming more inevitable with every passing moment.
II. With regard to the attendees – TV and radio broadcasters – there was surprisingly little advice or direction as to how to cope with these developments.
III. There is still tremendous confusion as to how these developments will manifest themselves, with competing interests and therefore competing visions that will soon be joined in mortal combat.
The overall intention of MediaScrum is to pull all of this together and make sense out of the pieces, which seem to be increasing in number. For the discussion of NAB2006 and other purposes, let’s stipulate the following definitions:
IPTV – TV programming delivered via Internet protocol by the telcos to the TV in your home. Despite unique features enabled by IP, e.g., call waiting and multiple picture-in-picture screens, it is essentially digital cable/satellite TV on steroids. It is a closed-system, and programming is controlled by the telcos.
Internet TV – TV programming delivered over the public Internet and viewed on your PC. This includes all forms of online video, whether repurposed network programming or user-generated video on YouTube. I prefer to think of Internet TV as entertainment or news viewed on the PC as a substitute for watching similar programming on your TV. The fundamental consumer constraints are that you have to be sitting at your PC and view it through a browser.
This will all eventually merge. All programming will be digital and stored on a home video server – whether from the cable company or telco, whether downloaded from the internet or ingested from a DVD. The server will provide the video as you want it – to your TV to watch “Lost,” to your PC to watch news, to your cellphone to watch music videos while taking a walk, to your laptop to watch “Mission: Impossible III” on the airplane. Your content, when you want, where you want, how you want. This is Future 1.0.
Future 2.0 would provide all the content stored on central servers, not locally in the home. I could access any content from anywhere on any device at any time. This will take a long way to come about because it requires all of the content providers and distributors to have common protocols, business models, and revenue sharing. Maybe when I come back in my next life.
So, how did NAB2006 reflect the coming of Future 1.0?
IPTV was probably the most mainstream of the visions discussed. Microsoft’s view is that TV is where the PC was in the 1980s before the advent of the Internet. With the advent of IPTV, TV has now become a full-class citizen in the digital age.
By 2009, IPTV penetration is estimated to grow to 20-30 million households worldwide. During this time, Microsoft expects that IPTV will dominate over Internet TV due to:
> Quality of the service, especially compared to Internet TV
> Structure, with $10 billion of capital expected to be invested
> Economic value to consumers, and consequently to all players in the value chain.
That is probably true, at least in the near to medium term.
AT&T discussed its approach to IPTV, which is taking the cable strategy one-step beyond. In another session, Cablevision talked about how it had pioneered the Triple Play – voice, TV and data. AT&T’s strategy is increased functionality within the bundle that will also enable interactions among the services: VDSL, fiber, wireless, wi-fi, home networking, IPTV.
AT&T is holding to their projection of initial deployment to 18 million households, with fiber to the premises or to the node, such that on average, fiber will be extended to within 3000 feet from the home, allowing speeds of 20-25 Mbps.
AT&T’s offering will provide:
> More than 200 channels
> Hundred of hours of VOD
> Multiple PIP with metadata of observed channels
> An interactive electronic program guide
> Search engine – actor / title / director / etc.
AT&T has placed a huge bet that its vision of the future is correct. Not all players are pinning their business plans on a particular view of the future but some are making similar bet-the-ranch, we’d-better-get-it-right-or else bets. For example, Intel kicked off the conference with its view of the digital home that is premised on it dominating the world of Future 1.0, which is less TV-centric.
Intel’s presentation set the stage with a discussion of the future impact of digital entertainment that was echoed by many, if not all, of the presenters who followed:
> Content business models change
> Media moves to multiple digital platforms
> Distribution model moves away from cable and satellite companies
> Portals are the next MSO as internet broadcasters and aggregators
> Consumers get more control
Now, Intel’s not-so-hidden agenda is that it wants the VIIV system to dominate the digital home just as the Centrino system has come to dominate wireless communications in laptops. The VIIV-enabled device is meant to connect the internet and the PC to the TV. Running Microsoft’s MediaCenter software, VIIV will power the home network.
Intel’s ambitions for VIIV run far beyond those that it had for Centrino. Where the latter needed the cooperation of laptop manufacturers and wireless providers, the “VIIV ecosystem,” as they put it, will involve:
> PC manufacturers;
> Consumer electronics manufacturers who will make the connected media devices – TVs, stereos, etc.; and
> Content partners
Distribution companies will presumably also be part of the mix.
Of course, you can start to see the outlines of the implications of the disaggregation of content and distribution. Cable and satellite companies become less important. What about television networks? Do they still have a role?
NBCUniversal hit it right on the head when it discussed expected changes in business models and partners:
> Business model challenge – NBC doesn’t want to replace a big business with a small business, and
> It wants change with minimal disruptions
Unfortunately for NBC, neither of those areas is under its control. The timing, direction and impact of change will happen with or without NBC’s cooperation.
New distribution models are evolving. For example, Moviebeam views itself as a “video store in a box” since:
> Its system distributes 10 fresh movies per week through datacasting, 100 movies total stored on hard drive;
> Movies can then be rented off the hard drive;
> Moviebeam will be introducing an IP connection into box to enable access to older titles that presumably will initially be trickled into the box during off hours; and
> The Moviebeam box will have a USB antenna to transmit content to other platforms in the house.
Interestingly, this model not only challenges NBC as being the distributor into the home, it potentially challenges Intel with regard to managing the content within the home. Once broadband enables instant downloads, Moviebeam’s business model of storing content locally could disappear, but if it has established itself as the de facto home entertainment server, it could maintain its hoped-for place of prominence in the home.
Let’s move over to Internet TV: video content on your PC. One name getting a lot of attention in this area is Brightcove. According to Jeremy Allaire, the potential benefits of Internet TV are:
> Open distribution, so anyone can create web content;
> Consumer choice that is as deep as the text web;
> Multiscreen delivery; and
> Content owner control.
Their business model seems to be predicated on enabling content owners of all stripes to port their content to the Web – traditional content providers such as Discovery Channel and amateurs like you and me – a scary prospect if there ever was one.
Since the heavy hand of government will be involved however the video world develops, three FCC commissioners were on hand to provide their views: Michael Copps, Jonathan Adelstein, and Sheila Tate. Given that it was a public forum, they didn’t have much to say that was controversial, but did provide some general direction and guidance with regard to their priorities.
Their general concerns regarding media were:
> Homeland security – the communications industry is unprepared for a natural disaster or a terrorist attack;
> Media consolidation; and
> The transition to digital TV
Commissioner Tate commented on her view of the FCC’s role in the telco IPTV world, saying that the FCC is taking a watchful approach for now as they consider the issues as to whether they should actively bring about a level playing field. In general, she felt that the role of the FCC was to encourage competition and investment.
Summary
In general, the world is moving toward on-demand content, but on separate platforms: closed networks such at IPTV and broadband video on the web. Their eventual convergence depends on linkage from PC to TV, with Intel trying to take control on the hardware side with VIIV.
There was very little discussion – at least in the public sessions – about how broadcasters, i.e., TV stations, should deal with this phenomenon. For example, there was no discussion about recent NBC or Fox deals in which the networks are trying to placate station affiliates concerned about content moving to the web, encouraging viewers to look elsewhere for network shows. The question left open is: What is the role of TV stations when content is on-demand?
On the other hand, as we move to on-demand content, there was also no discussion about difficulty of building new entertainment brands if all content is on-demand – will people rely on old brands, word-of-mouth, trusted sources? Even if consumers know what content that want to watch and have more choice, how do they navigate? In many ways, video on the web is like the Internet before search – how do you find what you want to watch?
Finally, there was little discussion of the practical technical hurdles. For example, Mike Shaw of ABC said earlier in April that the web infrastructure of the U.S. can only support about 400,000 simultaneous video streams. Not much of a mass audience there. Other little items that were mentioned only in passing: does there need to be reformatting of content for different devices and modalities – can content be published once and viewed many times, can it just be ported automatically from one device to another or does it need to be reformatted for aspect ratio, speed of streams, video format, etc. – some of which can probably be automated and some which probably can’t.
The road to Future 1.0 is still a long and bumpy one, so let’s all hang on!
I. The pace of technology change is accelerating, and the shift to on-demand is becoming more inevitable with every passing moment.
II. With regard to the attendees – TV and radio broadcasters – there was surprisingly little advice or direction as to how to cope with these developments.
III. There is still tremendous confusion as to how these developments will manifest themselves, with competing interests and therefore competing visions that will soon be joined in mortal combat.
The overall intention of MediaScrum is to pull all of this together and make sense out of the pieces, which seem to be increasing in number. For the discussion of NAB2006 and other purposes, let’s stipulate the following definitions:
IPTV – TV programming delivered via Internet protocol by the telcos to the TV in your home. Despite unique features enabled by IP, e.g., call waiting and multiple picture-in-picture screens, it is essentially digital cable/satellite TV on steroids. It is a closed-system, and programming is controlled by the telcos.
Internet TV – TV programming delivered over the public Internet and viewed on your PC. This includes all forms of online video, whether repurposed network programming or user-generated video on YouTube. I prefer to think of Internet TV as entertainment or news viewed on the PC as a substitute for watching similar programming on your TV. The fundamental consumer constraints are that you have to be sitting at your PC and view it through a browser.
This will all eventually merge. All programming will be digital and stored on a home video server – whether from the cable company or telco, whether downloaded from the internet or ingested from a DVD. The server will provide the video as you want it – to your TV to watch “Lost,” to your PC to watch news, to your cellphone to watch music videos while taking a walk, to your laptop to watch “Mission: Impossible III” on the airplane. Your content, when you want, where you want, how you want. This is Future 1.0.
Future 2.0 would provide all the content stored on central servers, not locally in the home. I could access any content from anywhere on any device at any time. This will take a long way to come about because it requires all of the content providers and distributors to have common protocols, business models, and revenue sharing. Maybe when I come back in my next life.
So, how did NAB2006 reflect the coming of Future 1.0?
IPTV was probably the most mainstream of the visions discussed. Microsoft’s view is that TV is where the PC was in the 1980s before the advent of the Internet. With the advent of IPTV, TV has now become a full-class citizen in the digital age.
By 2009, IPTV penetration is estimated to grow to 20-30 million households worldwide. During this time, Microsoft expects that IPTV will dominate over Internet TV due to:
> Quality of the service, especially compared to Internet TV
> Structure, with $10 billion of capital expected to be invested
> Economic value to consumers, and consequently to all players in the value chain.
That is probably true, at least in the near to medium term.
AT&T discussed its approach to IPTV, which is taking the cable strategy one-step beyond. In another session, Cablevision talked about how it had pioneered the Triple Play – voice, TV and data. AT&T’s strategy is increased functionality within the bundle that will also enable interactions among the services: VDSL, fiber, wireless, wi-fi, home networking, IPTV.
AT&T is holding to their projection of initial deployment to 18 million households, with fiber to the premises or to the node, such that on average, fiber will be extended to within 3000 feet from the home, allowing speeds of 20-25 Mbps.
AT&T’s offering will provide:
> More than 200 channels
> Hundred of hours of VOD
> Multiple PIP with metadata of observed channels
> An interactive electronic program guide
> Search engine – actor / title / director / etc.
AT&T has placed a huge bet that its vision of the future is correct. Not all players are pinning their business plans on a particular view of the future but some are making similar bet-the-ranch, we’d-better-get-it-right-or else bets. For example, Intel kicked off the conference with its view of the digital home that is premised on it dominating the world of Future 1.0, which is less TV-centric.
Intel’s presentation set the stage with a discussion of the future impact of digital entertainment that was echoed by many, if not all, of the presenters who followed:
> Content business models change
> Media moves to multiple digital platforms
> Distribution model moves away from cable and satellite companies
> Portals are the next MSO as internet broadcasters and aggregators
> Consumers get more control
Now, Intel’s not-so-hidden agenda is that it wants the VIIV system to dominate the digital home just as the Centrino system has come to dominate wireless communications in laptops. The VIIV-enabled device is meant to connect the internet and the PC to the TV. Running Microsoft’s MediaCenter software, VIIV will power the home network.
Intel’s ambitions for VIIV run far beyond those that it had for Centrino. Where the latter needed the cooperation of laptop manufacturers and wireless providers, the “VIIV ecosystem,” as they put it, will involve:
> PC manufacturers;
> Consumer electronics manufacturers who will make the connected media devices – TVs, stereos, etc.; and
> Content partners
Distribution companies will presumably also be part of the mix.
Of course, you can start to see the outlines of the implications of the disaggregation of content and distribution. Cable and satellite companies become less important. What about television networks? Do they still have a role?
NBCUniversal hit it right on the head when it discussed expected changes in business models and partners:
> Business model challenge – NBC doesn’t want to replace a big business with a small business, and
> It wants change with minimal disruptions
Unfortunately for NBC, neither of those areas is under its control. The timing, direction and impact of change will happen with or without NBC’s cooperation.
New distribution models are evolving. For example, Moviebeam views itself as a “video store in a box” since:
> Its system distributes 10 fresh movies per week through datacasting, 100 movies total stored on hard drive;
> Movies can then be rented off the hard drive;
> Moviebeam will be introducing an IP connection into box to enable access to older titles that presumably will initially be trickled into the box during off hours; and
> The Moviebeam box will have a USB antenna to transmit content to other platforms in the house.
Interestingly, this model not only challenges NBC as being the distributor into the home, it potentially challenges Intel with regard to managing the content within the home. Once broadband enables instant downloads, Moviebeam’s business model of storing content locally could disappear, but if it has established itself as the de facto home entertainment server, it could maintain its hoped-for place of prominence in the home.
Let’s move over to Internet TV: video content on your PC. One name getting a lot of attention in this area is Brightcove. According to Jeremy Allaire, the potential benefits of Internet TV are:
> Open distribution, so anyone can create web content;
> Consumer choice that is as deep as the text web;
> Multiscreen delivery; and
> Content owner control.
Their business model seems to be predicated on enabling content owners of all stripes to port their content to the Web – traditional content providers such as Discovery Channel and amateurs like you and me – a scary prospect if there ever was one.
Since the heavy hand of government will be involved however the video world develops, three FCC commissioners were on hand to provide their views: Michael Copps, Jonathan Adelstein, and Sheila Tate. Given that it was a public forum, they didn’t have much to say that was controversial, but did provide some general direction and guidance with regard to their priorities.
Their general concerns regarding media were:
> Homeland security – the communications industry is unprepared for a natural disaster or a terrorist attack;
> Media consolidation; and
> The transition to digital TV
Commissioner Tate commented on her view of the FCC’s role in the telco IPTV world, saying that the FCC is taking a watchful approach for now as they consider the issues as to whether they should actively bring about a level playing field. In general, she felt that the role of the FCC was to encourage competition and investment.
Summary
In general, the world is moving toward on-demand content, but on separate platforms: closed networks such at IPTV and broadband video on the web. Their eventual convergence depends on linkage from PC to TV, with Intel trying to take control on the hardware side with VIIV.
There was very little discussion – at least in the public sessions – about how broadcasters, i.e., TV stations, should deal with this phenomenon. For example, there was no discussion about recent NBC or Fox deals in which the networks are trying to placate station affiliates concerned about content moving to the web, encouraging viewers to look elsewhere for network shows. The question left open is: What is the role of TV stations when content is on-demand?
On the other hand, as we move to on-demand content, there was also no discussion about difficulty of building new entertainment brands if all content is on-demand – will people rely on old brands, word-of-mouth, trusted sources? Even if consumers know what content that want to watch and have more choice, how do they navigate? In many ways, video on the web is like the Internet before search – how do you find what you want to watch?
Finally, there was little discussion of the practical technical hurdles. For example, Mike Shaw of ABC said earlier in April that the web infrastructure of the U.S. can only support about 400,000 simultaneous video streams. Not much of a mass audience there. Other little items that were mentioned only in passing: does there need to be reformatting of content for different devices and modalities – can content be published once and viewed many times, can it just be ported automatically from one device to another or does it need to be reformatted for aspect ratio, speed of streams, video format, etc. – some of which can probably be automated and some which probably can’t.
The road to Future 1.0 is still a long and bumpy one, so let’s all hang on!
Thursday, April 20, 2006
The Old Jargon Just Doesn't Fit Anymore
As we move into the brave new world of digital media, someone is going to have to come up with new jargon. For example, MediaScrum will be at NAB next week - that is, the show sponsored by the National Association of Broadcasters. Who are the members, you ask, of the NAB: why, radio and television stations. Those media upstarts - cable and satellite companies, other media organizations, international broadcasters, equipment manufacturers, and their ilk - are welcome to become Associate Members, otherwise known as the children's table at Thanksgiving.
NAB2006 bills itself as the World's Largest Electronic Media Show. I'm not yet quibbling with that description - I'll let you know what I think of it after spending next week with the Broadcasters and their Associate Members. "Electronic Media," however, encompasses more than just Broadcasters. Interestingly, last year, Electronic Media magazine went in the other direction - it changed its name to TV Week.
In any case, we'll have to come up with a new term for our new medium. "Broadcasting"? It implies an FCC license, Heaven forbid. Also, I thought the essence of the new medium was narrowcasting. "TV"? Too limiting. "Video"? No, sounds like my neighbor's Super-8 vacation film. Any suggestions out there?
NAB2006 bills itself as the World's Largest Electronic Media Show. I'm not yet quibbling with that description - I'll let you know what I think of it after spending next week with the Broadcasters and their Associate Members. "Electronic Media," however, encompasses more than just Broadcasters. Interestingly, last year, Electronic Media magazine went in the other direction - it changed its name to TV Week.
In any case, we'll have to come up with a new term for our new medium. "Broadcasting"? It implies an FCC license, Heaven forbid. Also, I thought the essence of the new medium was narrowcasting. "TV"? Too limiting. "Video"? No, sounds like my neighbor's Super-8 vacation film. Any suggestions out there?
Tuesday, April 11, 2006
Apple Is Disintermediated - Who Needs iTunes After All?
Disney has announced that it is making several of its hit shows available on the web, free of charge: http://online.wsj.com/article/SB114471866760022484.html?mod=mm_media_marketing_hs_left. It's been an interesting progression: Apple sells music on iTunes, Apple provides video on iTunes, video providers realize that people don't necessarily want to watch video on their iPod, video providers distribute content directly to their users via the web.
A lot of people are having their ox gored, but they are being polite about it for now: local stations and cable networks - who benefit from off-net syndicated programming; cable MSOs who want to capture the on-demand market through their cable systems. It remains to be seen whether all of the publicity surrounding Disney's latest move will generate additional interest in their programming - and create more value for their shows at every step of the value chain: DVDs, syndication, etc. - in the near- to medium-term. After all, I don't think that there is a very large audience for watching TV programs on your PC - yet - and there is also some work involved in finding the programs, etc., even if you could port the programs from your PC to your TV.
Nonetheless, it's one more significant step in revamping the old business model. Stay tuned - or logged in, as the case may be.
A lot of people are having their ox gored, but they are being polite about it for now: local stations and cable networks - who benefit from off-net syndicated programming; cable MSOs who want to capture the on-demand market through their cable systems. It remains to be seen whether all of the publicity surrounding Disney's latest move will generate additional interest in their programming - and create more value for their shows at every step of the value chain: DVDs, syndication, etc. - in the near- to medium-term. After all, I don't think that there is a very large audience for watching TV programs on your PC - yet - and there is also some work involved in finding the programs, etc., even if you could port the programs from your PC to your TV.
Nonetheless, it's one more significant step in revamping the old business model. Stay tuned - or logged in, as the case may be.
Monday, March 20, 2006
The Future Has Arrived: Ubiquitous Wireless Broadband
There are two things that people often forget when discussing a phenomenon: 1. What is see is not what you get. Any incarnation of a new idea is nothing more than version 1.0. Anyone smart will build on it, improve it, and eventually morph it into something that may not resemble the original at all. 2. There is most likely an endgame. Eventually, the rate of change decelerates, and we have reached the final stage of the product's evolution.
Take telecommunications. We started with writing on rocks, developed mail service, Samuel Morse invented the telegraph which sent encoded electronic signals, Bell turned those signals into voice, we now send data over those wires, etc., etc. There is continual evolution - phone lines carry DSL where once they were thought incapable of anything more than 56k. Cable provides even greater bandwidth.
But the market is eventually driven by customer needs. Portability is a big part of connectivity; not just annoyance with wires and having to rip up my house if I want to rewire. Think about where this will lead us - we can high-speed connectivity; we want portability, i.e., ubiquity. Wireless broadband.
The Wall St. Journal reported today that a system in Oklahoma is installing wireless: TVhttp://online.wsj.com/article/SB114282577797602754.html?mod=djemMM. The next step: the endgame of connectivity.
Take telecommunications. We started with writing on rocks, developed mail service, Samuel Morse invented the telegraph which sent encoded electronic signals, Bell turned those signals into voice, we now send data over those wires, etc., etc. There is continual evolution - phone lines carry DSL where once they were thought incapable of anything more than 56k. Cable provides even greater bandwidth.
But the market is eventually driven by customer needs. Portability is a big part of connectivity; not just annoyance with wires and having to rip up my house if I want to rewire. Think about where this will lead us - we can high-speed connectivity; we want portability, i.e., ubiquity. Wireless broadband.
The Wall St. Journal reported today that a system in Oklahoma is installing wireless: TVhttp://online.wsj.com/article/SB114282577797602754.html?mod=djemMM. The next step: the endgame of connectivity.
Friday, March 17, 2006
More than 24 Hours a Day; If Only I Could Bill for It
With the proliferation of media, we are not far from the overdose level. Before, we could take the 24 hours in a day and divide them by usage: 8 for sleeping, 9 for working, 2 for commuting, 4 for consuming media, 1 hour for things we can't mention since this is a family-friendly blog, etc. With the advent of media multi-consumption, we can listen to our iPod while surfing the web with the TV on in the background as a truck with an advertising banner passes by our window. Therefore, we can consume an infinite amount of media during our 24 hours. There was a citation in the media recently that teenagers have effectively created a 38-hour day due to multi-consumption.
That would seem to be good news for marketers - more consumption of media usually means more opportunities for advertisers. Unfortunately for programmers and advertisers, most of it will be background noise of no greater impact than the hissing of my radiator. Engagement is becoming more important; that's probably important since our engagement seems to be going down.
That would seem to be good news for marketers - more consumption of media usually means more opportunities for advertisers. Unfortunately for programmers and advertisers, most of it will be background noise of no greater impact than the hissing of my radiator. Engagement is becoming more important; that's probably important since our engagement seems to be going down.
Thursday, March 02, 2006
Content may be king, but not everyone gets to be the king
Yahoo announced yesterday that it will be scaling back its efforts to generate original content and will shift to content generated by others, particularly users: http://www.nytimes.com/2006/03/02/technology/02yahoo.html. This is the latest step in the evolution of the web and illustrates a number of key rules that are generally applicable across businesses:
- Stick to what you know. Yahoo is terrific at aggregating audiences and enabling navigation through content. Trying to create new a content brand, i.e., competing with players such as Disney, ESPN, CBS News, etc., but leveraging its strengths to drive audience to its content is a tough challenge, especially when the web makes access to any and all content so easy.
- Don’t compete with your customers unless you’re going to win. Becoming a content provider makes you less attractive to other content providers. While that discussion is pushed to the end of the article and disclaimed by Yahoo, I think that it must have been a larger influence than Yahoo was willing to admit.
And finally, we seem to look at each new medium as if it were just a variation on the old one: TV is radio with pictures – early TV shows were studio shows of people clustered around a microphone. The web is interactive TV – let’s create TV programming for the web. Oops, maybe user-generated content is the key.
Let’s see where the web goes next.
- Stick to what you know. Yahoo is terrific at aggregating audiences and enabling navigation through content. Trying to create new a content brand, i.e., competing with players such as Disney, ESPN, CBS News, etc., but leveraging its strengths to drive audience to its content is a tough challenge, especially when the web makes access to any and all content so easy.
- Don’t compete with your customers unless you’re going to win. Becoming a content provider makes you less attractive to other content providers. While that discussion is pushed to the end of the article and disclaimed by Yahoo, I think that it must have been a larger influence than Yahoo was willing to admit.
And finally, we seem to look at each new medium as if it were just a variation on the old one: TV is radio with pictures – early TV shows were studio shows of people clustered around a microphone. The web is interactive TV – let’s create TV programming for the web. Oops, maybe user-generated content is the key.
Let’s see where the web goes next.
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