Video downloading without Cable VOD

Just as cable has gotten consumers comfortable with the notion of renting a movie through their cable box, as opposed to the video store, film studios are seeking ways to bypass the cable company and talk directly to the consumer. With the rise of the XBox 360 and Playstation 3, viewers can watch movies directly from their game consoles. Economically, film studios would no longer have to split their revenue with cable; but if not them, then Microsoft is happy to take a piece. "Sony will likely unveil details about its videostore at the E3 confab in Los Angeles next month. At the same event, Microsoft is expected to announce a partnership with Netflix under which users will be able to stream movies from that company's "watch now" service onto a TV via the Xbox 360."

As customers put more external devices on their TV set, they can bypass the cable box to download content. And don't expect Apple or Amazon to sit back quietly. They are enjoying the revenue from web downloads and would sure like to participate in this big screen grab for content. Ultimately this competition of devices could make it harder to search for content, unless it creates duplication across multiple platforms. Regardless, digital distribution opens up the pipeline to more players and more competition and that tends to lead to lower prices.

Phone Giants Roll Out 'Three Screen' Strategy

"The nation's largest phone companies sell packages of wireless phone service, Internet access and pay TV to consumers. Now they're taking integration one step further, airing video programming -- and selling ads -- across all three platforms. Content and advertising deals used to be struck separately for each platform. But Verizon Communications Inc. and AT&T Inc., for instance, have cut deals with media companies that allow them to distribute programming -- from "Saturday Night Live" clips to user-generated video -- to cellphone, broadband and TV customers."

Regardless of the device, regardless of where you watch content, or when you watch, advertising can be targeted to reach you across platforms. Phone companies may have let the hard line phone business become invaded by cable, but they are clearly banking on wireless phone as their domain. Combining wireless reach with their movement into cable and hi speed, provides them with a potentially lucrative advantage, provided that they can correctly market a "quad" play - one price approach to the customer.

With access to the consumer across all potential screens, and the ability to integrate ad messages across all platforms, telcos can take serious business back from cable. It seems that cable will need a wireless strategy to continue to effectively compete.

Multi-Platform Ads Boost Effectiveness Of Campaigns

Integrated marketing campaigns that work across all platforms, TV, radio, web, etc, naturally are more effective as they use frequency and reach to break through the clutter. But how many ad budgets can afford to spend across so many platforms. The rise of internet advertising and its ability to hyper target a specific audience is proving so popular as to see it already surpassing other old media platforms in ad spending. Per a Bloomberg report, " Internet advertising spending will surpass radio this year, with about 9.5 percent of ad budgets worldwide allocated to online media, said Steve King, head of Publicis Groupe SA's ZenithOptimedia unit." And internet ad spending will shortly overtake other media as well.

The solution for these businesses is to build out content across multiple media platforms. And so we find all these content creators merchandising their content across web platforms. Digital growth requires all businesses to create content that can be consumed across multiple platforms to retain their fair share of ad budgets. "Consumers spend 15 percent of their time on the Internet, while 9 percent of advertising budgets are on the Web, leaving room for growth, King said. He said rising Internet use will also drive online ad spending, with 19 percent of the world's population having Web access in 2008, compared with 17 percent last year."

And so we see radio networks, magazines, and other old media businesses talk about their online businesses; it is where their audience is heading and they need to stay relevant in this new space. But they can also offer the opportunity to reach and target their audience across multiple platforms that their content touches.

Reading the Kindle with Your Morning Coffee

Perhaps what it will take for devices like the Kindle to truly succeed will require newspapers themselves to put their support and promotion behind them. As the pros and cons of this first generation of readers become more apparent, next generations will obviously be created to exceed all expectations. And financially, the Kindle may prove the economic preference, especially in a slower economy. "It also makes financial sense. A combined year's subscription to the Times and the Journal costs about $880. The combined purchase price of the Kindle, plus a year's worth of subscriptions to the Kindle editions—granted, not quite an equal product—amounts to a total of only $647, a savings of $233 in the first year. Assuming all the prices stay the same, the savings climbs to more than $500 in the second year. Plus, there's no delivery person to tip at the end of the year."

Its upside is convenience and ease of use, the downside, like most electronic devices is the need to keep it charged. And as we continue to hold onto so many devices that require constant charging, we need a common charger that can work with multiple devices, but thats a discussion for another day.

Papers Facing Worst Year for Ad Revenue

"The primary long-term threat to newspapers is the Internet’s siphoning away of ad revenue, a trend that has been under way for more than a decade, but one that has picked up speed in the last year. Advertisers have vastly more choices online than on paper, so newspaper Web sites win only a fraction of the advertising that goes digital, and it pays much less than advertising in print."

But print media isn't the only industry facing change. The broadcast industry is also facing decreases in their ad dollars as cable television better reaches key demographics with better reach and frequency. "The shift in advertising dollars from broadcast to cable is not new, but it is particularly pronounced this year. There are several explanations, analysts say, including the fact that the most popular cable channels on their best nights, now attract nearly as many viewers as some of the less popular broadcast networks. Over all, the ratings gap, once vast, has been gradually narrowing."

So both industries are facing a changing market. National Broadcast has adapted by buying up cable networks. Print has tried to adapt by buying websites. And in an interesting move, a cable company, Cablevision, is buying a newspaper, Newsday. The lessons to learn seem obvious; what got you to the dance won't keep you there. Businesses must continually adapt to meet the internal and external changes they face.

Consumers continually consume content. No matter in what form, print, video, audio. They consume to learn, to relax, to entertain, to play, to think. Companies that create content need to think outside the box to new avenues and distribution paths to connect their content with the consumer. And as consumers, we expect our content on demand, what we want, when we want it. Speed matters.

Take for an example the untimely passing of George Carlin. Print media had to wait more than 24 hours to deliver the news, while TV and the web could provide full information in a timely and immediate manner. No wonder, today's consumer no longer seeks the newspaper to learn new information. The current distribution model is broken and either the content has to change to reflect a different use for the product or the distribution has to change to regain the connection with the customer. It is necessary in this changing landscape.

Apple: 5 billion songs sold by iTunes

That is an amazing number. With a business that is only about 5 years old, that's about 1 billion songs each year, at $.99 a song; well you can do the math, a billion dollars in revenue a year. Add to that all the iPods and iPhones being sold and Steve Jobs has built an amazing business model. Oh, and what about digital videos. On top of all the song downloads, "The company added that iTunes customers are now renting and buying more than 50,000 movies every day, making iTunes the world's most popular online movie store." And movie revenue should increase their pockets even further.

Apple has done to Sirius and XM Radio, what the NAB couldn't; they have shown that a competitive model can negatively impact the satellite radio business. While their stock has been battered, and the FCC has not yet approved their merger, they have lost a step in effectively competing in the mobile entertainment space. This merger needs to be approved to enable Sirius to more effectively fight in this very competitive landscape.

Huffington Post starts local news push

Recently, I have been having a sense of deja vu. It seems as I pick up the newspaper and read its articles, I have a sense that I have read these stories before. Perhaps that second reading of the same news helps to remind me that I did indeed read it and causes me to better remember what I have read. They say repetition improves memory.

Still, I wonder if the web's impact on my news gathering will shortly force me to abandon the newspaper for my digital paper. I equate this to when I stopped using the newspaper to get the movie schedule and times as the web became faster and more convenient. I feel like the day will shortly come where I will no longer go outside to my driveway to pick up the paper and simply turn on my pc or digital device to download my day's news.

As one of my sources for news content, The Huffington Post has become a daily, or even twice daily read, for the latest headlines, politics, media, business, and even entertainment news. Its desire to add local content is encouraging, but I may be unnecessary. I can easily download other sites to get that information, too. Still, their mission is to be the internet newspaper and local is a part of that coverage. They are indeed challenging the current landscape.

TV networks brace for potential actors strike

I am dreading a repeat of last November's writer strike. A compromise could have been found without striking; the aftermath of the strike was disastrous. AFTRA split with SAG over their negotiation position and found an agreeable solution they could live with. That AFTRA vote is scheduled for July 7 or 8. SAG is trying to convince AFTRA membership to vote against the deal. AFTRA recognized that a strike was not beneficial to its members and found a common ground with the producers.

And while SAG has not yet authorized a strike vote, they seem to be headed into that direction. Yes, TV and the movies survived the writers strike; but it is clear that it hurt the economy and quality TV viewing. Thanks to the writers strike, we now enjoy American Gladiators, Celebrity Circus, prime time game shows and even more reality programming on TV today. Sorry, I find most of it unwatchable. Another strike will simply further push us to the web and our library of old movies to replace new viewing choices. And ultimately our fragile economy will only be hurt further.

What a shame that SAG has not learned anything from the past. The writers union, still suffering from their strike, will feel compelled to join the actors picket line, as the actors did for them. I'm sure they will have lots of stories to share on how wrong this second strike would be for them all.

And while the last strike has caused the networks to start early to refill their line-ups, there will not be much new in the pot should the strike extend for a long period. "About half of all prime-time dramas and sitcoms are now shooting for the fall, allowing networks to stockpile a handful of new episodes in the event of an actors' work stoppage, said one studio insider who spoke on condition of anonymity" But that may mean 2 or 3 episodes of certain series and that will get used up quickly.

The biggest indicator as to whether a strike occurs or not will be the results of the rank and file vote from AFTRA. That will provide SAG with some clue what their own membership wants to do. "Other Hollywood insiders see an actors strike as relatively improbable given the leftover fatigue from the writers' work stoppage. Some question whether SAG could even muster the 75 percent majority vote it needs in a strike authorization." I hope they come to their senses and resume negotiating in good faith.

Microsoft Bets on Interactive Ads

Who controls the cable box... Lots of business talk about interactive advertising, but ultimately who controls the interface seems to control the advertising. This puts Microsoft, along with Navic, in competition with cables new consortium approach with Project Canoe. Both seem to be competing for control of the platform and the promise of superior back office control.

"While Microsoft has attempted to gain a major foothold in cable for more than one decade by selling software for digital set-tops, in recent years, it has focused most of its set-top efforts on the burgeoning Internet-protocol-TV market and shifted its cable emphasis to back-end systems"

The advertising game continues to get more interesting and interactive advertising is a game changer. Are these two businesses complimentary or competitive. Who determines which middleware is deployed in the box, and does tru2way (OCAP) standards provide equal opportunity to impact which platform serves up the interactive ads. And lastly does the consumer have a say which platform thaey prefer to serve them. Kinda like deciding whether you prefer Explorer, Firefox, or Safari to be your interface.

Remote Clicks That Do More Than Just Change Channels

Interactivity. Convergence of web and TV. New monetization opportunities to target an audience and convert them more quickly from intention to purchase. Like that living room set on your favorite TV show. Push a button on your remote and connect to Pottery Barn and get more info on the item and hopefully agree to purchase.

That is what all the hoopla is about. And who controls that process. Which box controls the interactivity. For the cable companies, its hope now rests with Project Canoe, a new venture to link the six largest cable companies together to simplify the advertising process and create a more national footprint. Cable seems to have the inside track until other devices can prove that they can just as easily use the internet pipeline to achieve the same results.

Where once cable touted itself as local, technological change and competition has forced them to act more national and global. That local distinction and differentiation is gone; no longer do you think of your LOCAL cable company. It is anew ballgame.

For content creators, that neutral position continues to serve them well. Regardless of the distribution path, half of the connection requires the content itself to build an interactive experience. The other half, the ad and e-commerce angles, is more interesting. Who controls the experience; does cable have an advantage to best target its audience by geography, demographics, and psychographics. Or will the content itself be appealing to the right target audience without further segmentation. Interactivity brings more challenges, but it is also bringing forth many new opportunities as well. The landscape is changing before our eyes!

Hollywood In ‘De Facto’ Strike: AMPTP

If Hollywood goes on strike again, then I say shame on the whole industry. Argue, negotiate, complain, but don't strike. Find a common ground. In today's recessionary climate, it will do so much more harm than good and it is in no one's best interest to strike. Don't!

Is Hulu Out-Executing Comcast in On-Demand Programming?

The interesting thing to me about this article is not that Hulu scored a coup by getting access to Comedy Central content that Comcast has yet to nail down. Today, broadband distribution via pc offers a far different viewing experience than the TV VOD experience.

What is most interesting to me is that eventually these two types of distribution platforms may truly compete with each other. When broadband content can be viewed directly across the HD TV set, the consumer will have the opportunity to choose which platform (VOD or broadband) to watch this content from. How friendly the navigation device is to searching for content or recommending videos will ultimately determine which path the consumer takes.

But, content distribution is also at stake; Comedy Central currently gets a license fee per subscriber for carriage of its linear network. The VOD content is added value. If Comcast can no longer benefit from this structure, will they decide to drop Comedy Central from its line up. By choosing Hulu over Comcast, is Comedy Central predicting the next distribution model. And as the Hulu model also includes the NBC family of broadcast and cable networks as well as Fox, the impact has far greater ramifications.

It is this intersection of content and distribution, faced with fast technological change, that is affecting the telecommunications and entertainment industries. It is why SAG and AFTRA are fighting for their fair share. Its why cable and telco and satellite are fighting to manage the pipeline to the home. And it offers many businesses new opportunities to build better mousetraps to connect the customer with the content.

YouTube Hasn't Figured Out How to Make Money

The leader of video sharing, You Tube, seems to be having a hard time making money off online content. And yet they aren't worried. As Eric Schmidt, Chief Executive states, "The goal of the company isn't to monetize everything. The goal of the company is to change the world."

And Google, the owner of You Tube, can afford to wait. Search Engine Marketing is still their bread and butter and will enable them to expand as the advertising community gets more comfortable with better targeting methods for online video. "Schmidt added that unlike most companies, Google doesn't have to worry about making money from all its ventures since its search advertising business is a cash cow. "We have the luxury of time," he said. 'Most people in the business are so pressed for time. They have to make money now.'"

In the early days of cable, it was also hard to convince advertisers that a smaller audience also meant that it was a more efficient buy. Highly targeted, upper income homes were the first to afford cable and these early adopters were harder to reach; cable was the solution. Fast forward to the internet and it is the same story. Early adopters, more targeted audience, more efficient and effective buy. An as adoption of online video expands, scalability is sure to follow. For those advertisers who risk an online strategy earlier in the life cycle, will come bigger rewards. But eventually, online video advertising, like cable advertising before it, will explode and prosper. You Tube can afford to wait for they are likely to prosper.

Hulu Adds Viacom Shows

While You Tube has cornered amateur UGC, and niche online networks like NextNewNetworks and My Damn Channel are developing more polished UGC, Hulu or Hula, as some still think to call it, is becoming the destination for broadcast and cable long form and short form content - movies, tv shows, and clips. Initially a partnership of Fox and NBC, the launch of Viacom shows like The Daily Show further expands the reach and impact of hulu.

The hulu player continues to excel, making others like Joost, pale in comparison. As more content comes to hulu, however, it will need to come up with a better way to search for material as well as ways to recommend something to watch. The use of pre-roll advertising and overlays offers them a chance to monetize the content but they need to be considerate of the types of content being watched. It ruins the experience to put a pre roll in front of every short clip.

And now comes word that Disney is showing full length movies for a brief time on line with one pre roll spot, once it airs on the broadcast network. "Starting now, the company is offering films online for a week after they air on ABC as part of its "Wonderful World of Disney" franchise. Included are "Finding Nemo," "Monsters Inc.," "Haunted Mansion," "Confessions of a Teenage Drama Queen," "Princess Diaries 2," "Freaky Friday," and "Peter Pan.""

This seems more stunt than anything else. Perhaps the pre roll will be used to promote some other Disney venture. Beyond movies, Disney has so much great video in its archives that could be monetized online. I certainly would love to see some of those old TV shows again. While it would seem unlikely that Disney would ever partner with Hulu, the power of the Disney brand would enable it to thrive on its own as a destination portal to all its great content.

Will There Be Another Entertainment Strike in 2008

Hard to believe that SAG has not learned anything from the writers strike earlier this year. The Los Angeles economy lost over $8 billion dollars. The New York economy also lost significant dollars. Lives were disrupted from hard working people that work in the industry but don't belong to any of these unions. AFTRA at least worked toward a resolution and SAG wants to destroy it and destroy their business too.

And while jobs were lost and the business model turned upside down, the networks survived. They found reality shows and other programming to replace the shows that were stopped. And in the latest round of upfronts, despite limited programming from the last strike, are still finding a better than expected ad sale market. They are not suffering.

Striking should not be an option in the negotiations. Find your fair deal.

The Golden Age of Television

Like David Carr, writer of this article, I too miss the days when broadcast made an effort to fill seven nights of programming. And weekend nights included shows that were both written and performed well. So it is sad to see the airwaves filled with extreme fighting and other bad (albeit cheap)programming. It may get a small rating, bit these shows will have no future programming value. Don't look for re airings, syndication, or even dvd box sets. This short term programming strategy offers no long term revenue fruit. The other strategy that seems to be popular, the second airing of a weekday show on Saturday night. With VOD and dvrs, this re airing is a waste of programming time.

So why are the broadcast networks proceeding down this path. Well I believe it is simply about diversification. Each broadcaster has a variety of cable networks behind it to offset broadcast losses with cable gains. And the winners in this strategy are ABC, NBC, and Fox. With NBC, its stable includes USA, Bravo, CNBC, MSNBC, Oxygen and others. For ABC, its ABC Family, Disney, ESPN, and more. And for Fox, its FX, Fox News, and Fox Business, as well as other niche channels. Each niche has successfully taken viewers and revenue from the broadcast side. But it delivers a more highly targeted audience. And so David Carr, if you need something enjoyable to watch on Saturday night, avoid broadcast for the greener pastures of cable.

How does the broadcast side compete? Should they remain programming generalists or define their programming wheel differently. Fox has been most successful with American Idol. While it may not have much replay value, it has allowed its audiences to discover other interesting programming that runs post show. Now if only they can create and air shows for seven nights a week.

Why the Strike Was Necessary

Click on and read this article. Back in 2006, the industry was predicting the rise of internet distribution and was preparing for its growth. That was 2 years ago, and they were already working toward moving thousands of hours of content online. "They wanted the Internet to blend directly into TV. Where the audience will watch the Internet on their TV. Just as if it was TV. And this was their "ultimate goal" two years ago."

They were preparing the content and working to keep all the revenue, according to this article, and not share its potential increased usage with the folks that created it. In fact, it seems they were willing to take a hard line stance against sharing, "By the way, from all reports during the strike, two corporations were hard-liners, refusing to allow a settlement that the others were willing to accept as fair. And so, largely because of these two corporations, the strike went on for three horrible months, devastating the economy of Los Angeles."

Without the strike, producers would have reaped the reward without sharing the spoils. Reminds me a bit of the early days of TV when syndication was just a possibility and many were not being paid for their work. Talent from these early shows could only watch as the corporate parents found new revenue streams on these titles and the talent got nothing. Certainly the Writers Guild, SAG, and the other unions don't want a repeat of that fiasco.

Lastly, was the strike necessary? 2% of distributors gross is better than nothing. "To anyone who wonders whether the strike, horrible as it was, was necessary -- the president of Warner Bros. Cable Distribution (Eric Frankel) just explained it to, you why it was. Well, okay, not "just." But he did two years ago."

Microsoft's Ballmer on the Future

Interesting response by Steve Ballmer to the following question: "What is your outlook for the future of media?

In the next 10 years, the whole world of media, communications and advertising are going to be turned upside down -- my opinion.

Here are the premises I have. Number one, there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form. "
While the world is definitely moving toward electronic based consumption, it is hard to fathom that by 2018 thee will be no more newspapers or magazines. Devices like the Kindle and Apple iPhone are certainly drawing more people to electronic readership, but the timing seems awfully quick to see its extinction within 10 years. I also don't believe that these devices are ideal for enjoying electronic newspapers and magazines. Another generation or two of product change still needs to occur. It has yet to be proven that consumers are even thinking of making the switch and the price point for these devices are still high.

I envision this trend to take longer and there will still be paper forms of newspaper and magazines for at least 15 years.

One other comment by Ballmer, "Also in the world of 10 years from now, there are going to be far more producers of content than exist today. We've already started to see that certainly in the online world, but we've just scratched the surface" The internet has absolutely lowered the barriers of entry to enable more content to be delivered faster and easier to the consumer. The rise in blogs, like this one, exemplifies that trend, as does the proliferation of websites.

Will SAG strike?

If the upcoming Fall TV line-up is any indication, the Writers Strike earlier this year did not help any one's cause, writer, actor, mogul, etc. So far, no mention of the word strike seems to have come up in SAG's ongoing negotiations with producers. AFTRA showed their can be a compromise; let's hope that SAG finds a solution. Another strike will further hurt this industry. Its already being felt as fewer shows are being piloted and less jobs being created.

Study shows power of VOD as an ad platform

VOD is a great success story, offering new revenue models to augment the TV experience. Let's see, disable the fast forward trick feature, place the ad in the front of the desired content, and limit the ad to one message only, how could it not be effective and powerful. The real trick is to not kill the golden goose by adding more ad messages, creating clutter, and causing the consumer to escape VOD like they have with linear to DVR viewing.

VOD is an ideal consumer platform, offering what you want when you want it. The consumer has shown willingness to sit through an ad as long as it is relevant to the viewer and is limited to :30 or less. Whether that ad is promoting the linear channel, other programming, or even a product or service, the consumer is willing to watch, provided the time used is minimal. They have proactively chosen this content to watch and so may also be predisposed to a message that is of like interest. It is that interactive relationship that enables a unique message to make an impact.

and lastly, VOD, unlike linear TV is also accurately measurable. Not a Nielsen sample, but a true number of users that have accessed and watched the content, ad included. And while the info on this consumer is aggregated to allow privacy, it provides great knowledge to the advertiser on who is watching their ads. That info is far more useful than a diary of potential viewing.

Digital media growing fast, study says

"As readership and revenues shift onto the Internet, experts said on Tuesday that top news media executives must seek new digital opportunities without neglecting their traditional print publications by rushing headlong into cyberspace."

Timing. Isn't that the age old advice. Knowing when to change course and how fast to shift direction. Clearly the advice given is to not lose sight of current revenue streams through print while embracing the rise of digital content. Moving to fast might just result in turning "dollars into pennies."

Yet reacting too slow will turn dollars into bupkiss. Regardless of the distribution, print or digital, it is the content that consumers wish to consume. Making that content relevant in the most preferable ways will maintain brand loyalty and grow revenue.

Unfortunately, the lessons learned from change are often repeated. As the book, Who Moved My Cheese notes, we get fat and comfortable when the current model is full. But unless we are careful, that model can change quickly and we can be starving as wee look for the next piece of cheese. The print model has enjoyed subscription and advertising as a dual revenue stream. Even cable has enjoyed this dual approach.

But the shift to digitized content will require new thinking on how to maintain a healthy revenue and profit stream. Will the subscription model still work or are other revenue models needed? It's all about timing. Change may not happen overnight, but if you don't stay proactive to it, you'll be without your cheese while others are getting full bellies.

Digitized Content is Changing All Business Models

Digitized music content changed the cd business, Tower Records is no more, and consumers purchase digital downloads for their iPods.

The web has brought news and entertainment information directly to the masses and consumers have responded by purchasing less newspapers and magazine subscriptions.

Amazon has been pushing their Kindle as the device to replace the printed book, digital downloads of your favorite author. Borders Bookstore is facing extinction as revenues from the brick and mortar business drops.

And now we look at digital video downloads and a potential shakeup of the two tier model for revenue to the content networks, license fees and advertising fees. As cable programmers are willing to provide full length episodes of their shows through the internet, consumers can bypass their cable line-up for their web line-up. And as set top boxes and TV sets get open access to the web, those same shows can be seen on their big screen TV.

Most likely, the long tail of content programmers will be the first to embrace this open distribution platform as they receive far less in license fees. Larger networks may be more reluctant unless they can replace the loss of license fees with another revenue stream. Perhaps taking back the local spots offered to cable operators is one way to offset that loss.

Will cable operators look at this shift as an opportunity to charge more for access to high speed. And will their business model also have to change to replace the cable piece of their business with another home application, say security protection. Already profit margins on the cable business is lower than either telephone or hi speed. If cable operators successfully prepare for this change in applications, their profitability can continue to thrive. New business opportunities utilizing the pipe into the home and combined with incremental wireless is cable's future.

It seems inevitable, given how digital content is changing other businesses, that it will also change the cable business for video content. Cable programmers and cable operators need to strategize for this impending shift to remain competitive and rlevant to the consumer. To be forewarned is to be forearmed.