NY Times To Identify Native Ads As Paid Posts

The New York Times believes in separation of church and state, or in the world of media, the separation of editorial and advertisement.  And to assure that their readers also know the difference, the NYT,  per its publisher, "will set apart such articles online with a different typeface. It will also feature a color bar, the advertiser’s logo and, perhaps most importantly, the label 'paid post.'”  That they will take such measures to clearly differentiate is notable, it may undo the value of native advertising to make users think it is editorial content. 

What it does do is put The New York Times on higher ground in that they so actively showcase the differentiation for the sake of real journalism.  By creating such transparency between ad and editorial, they have set themselves apart from other news and information web sites.  Will others follow and do more to assure their readers of what is independent and what is sponsored; for the sake of the advertising community and the future of advertising, I hope so.

Have a Happy Holiday!

Hulu Confirms Why Owners Didn't Sell

For all the conflict whether the owners should sell off Hulu, the decision to keep onto their prized digital streaming distribution platform appears to have paid off.  In 2013, Hulu can count 5 million paying subscribers and $1 bullion dollars in revenue.  Yes Austin Powers, I said $1 billion dollars!  Not bad for a business that is only five years old. 

Hopefully the owners have now decided that they can indeed work together and build a common strategy in what is shaping as a very competitive streaming entertainment landscape.  Certainly, Hulu is not the leader in the category.  Netflix is twice the size and although it doesn't have the ad stream that Hulu does, it subscription revenue is almost four times higher.  And Amazon Prime, which operates its streaming business inside its mega retail environment, is equally as powerful.  For these and others in the space, it is still a very nascent business.  The growth potential remains enormous.

With Christmas around the corner, more and more consumers will be buying their gaming platforms, tablets, Roku and TiVo and Apple TV boxes, and they will all be looking for content to power these devices.  Streaming and downloads will continue to grow and the broadband infrastructure will have to figure out how to accommodate all this traffic.  And Hulu, Netflix, and others can continue to ride the growth curve.  So kudos Hulu owners for staying with the platform and not selling out; you have hit one milestone and, with a strong strategic plan, on the right path to future success.

Facebook Adding Video Ads

Search and display ads are nice, but Facebook hopes it can add a new revenue stream with video advertising.  "Facebook reportedly plans to charge $1 million to $2.5 million a day for video campaigns, depending on the size of the audience a marketer is trying to reach. But that price range could reduce advertiser interest."  Video ads might start running the moment you land on Facebook, although the plans seems to be to mute the audio until clicked on.  How Facebook users will react to autoplay ads remains to be seen; most likely, they have already seen this feature on other websites.  Still, it may prove distracting.

Regardless of this new video ad focus, Facebook's real challenge may be that the younger demo is moving away from Facebook to Instagram and that will only skew older the current audience to Facebook.  Will advertisers still want to buy this older demo or move budgets to Instagram and other websites?  For now, Facebook is right to add video ads although they may end up turning off the autoplay feature to gain more credibility of the ad views.  It is an important next step and one that might just find its way to Instagram, too.

Beyonce Proves Social Media Marketing Power

Without any fanfare or traditional promotional advertising, not even a traditional release date, Beyonce released a digital music album on iTunes using the power of social media to sell it.  And the results have been extraordinary.  "Beyonce's latest album broke iTunes sales records, Apple said Monday.  BEYONCÉ, which the singer announced on Facebook's Instagram mobile service, became the fastest selling album on iTunes with 828,773 purchased in its first three days, Apple reported.  The album also broke the U.S. first-week album record with 617,213 sold, the company added." 

Certainly others will try to emulate her strategy and not everyone can compete.  She comes with a huge following, a track record of success, and a high name recognition.  That this album made such a mark before any song was released or played to a radio audience demonstrates the marketing power her name alone must have. 

But recognition also needs to be payed to Instagram as the social driver of her iTunes' success.  The power of her appeal and influence and ability to sell through social media is quite powerful.  And she adeptly pulled it off.  Her audience, the ones that follow her on Instagram, responded to this unexpected Holiday present by quickly downloading and sharing their "find" to their followers.  Over 800,000 in only 3 days; in a word, unbelievable!

Charter Ready To Buy Time Warner Cable

Charter has a number in mind and it might not match what Time Warner Cable wants.  Whether they can find common ground or a low ball bid encourages a counter bid by another remains to be seen.  Perhaps Cablevision might be willing to prop up the bid with Charter in exchange for a big piece, say the NYC DMA.  Or perhaps Charter truly believes that given the continual loss of basic subscribers, Time Warner Cable's future earning potential could decline.  Still the value is in the infrastructure and the opportunity to gain more cost efficiency and more reach for broadband and wireless business opportunities.  And given the possible low initial bid, this acquisition process may take some time to close. 

Instagram Adds Best Friend Feature

It seems sometimes we don't want to share everything with everyone.  There are times we simply want to communicate with a smaller circle of friends, our "best friends" so to speak.  Well Instagram wants to let you private message your select few and has created Instagram Direct, "a new private messaging service built into the platform that will allow users to send a photo or video, along with a caption, to between one and 15 people." 

Now you can limit who gets to see that picture ... or can you.  While on first blush, used wisely, it enables smaller group messaging, but so does iMessage, for those on unlimited data plans.  "Because such messages don't count against SMS messages allotted by wireless plans, these apps effectively allow smartphone owners to communicate using only their data plans." 

Of course, teens, the largest demographic using Instagram should remain careful that anything posted is shareable.  Even a photo to a select few can get reposted and reposted again.  So be careful what kind of snarky or "mean girl" comments you might be considering sending in an Instagram Direct message.  Nothing is really private when it is posted.  Snapchat fans learned that the hard way, too.

Aereo Wants A Definitive Ruling

Question, when is a broadcaster not a broadcaster?  When they don't transmit over the air.  And does it matter where an antenna is located to receive those signals and display them on a screen?  According to Aereo, it does not.  Despite all the additional manipulations that Aereo does to move the signal from antenna to home, their bottom line contention is that they have every right as consumers have had to make copies since the days of the VHS tape.  Could they be accused from reselling the signal, costs to rent the antenna and provide additional value to the free signal.  And that seems to be the center of their argument.  So with a number of court victories already, Aereo wants a definitive ruling from the Supreme Court to end this continuous litigation.  "We want this resolved on the merits rather than a wasteful war of attrition,' said Aereo Chief Executive Chet Kanojia in a statement." For Aereo, such a move makes complete sense. 

And while Cablevision is not a fan of Aereo, they don't agree with the broadcasters argument as it relates to "cloud-based technology and future innovation", according to a spokesperson.  And so the issues that the Supreme Court are asked to review are far more complicated than just the acquiring and re-airing of signals.   And until the Supreme Cort decides to rule, lower courts will keep ruling within their jurisdictions. 

Cable Programmer Moving Toward Streaming Distribution

Given the high barriers to launching on a cable system, coupled with continual talk about even more cable operator consolidation, one cable network seems to have heeded my advice and struck a streaming platform deal.  "Bloomberg TV launched an app on Apple TV devices Wednesday morning that includes a live feed of the cable networks financial news programming as well as access to on-demand videos."  Most important to note is that this distribution deal does not require a user to be an authenticated cable customer. Other smaller, independent networks might just want to look at the Bloomberg model and see if perhaps they too have more to gain by gaining distribution on these OTT platforms.

Bloomberg contends that this deal is not meant to cause cord cutting and I would agree.  It certainly helps those consumers that have already cut the cord to gain a live linear news network into their home, but it won't be the driver that causes customers to cut the cord in the first place.  Consumers are defecting cable because of price and access to cheaper streaming options like Netflix and Amazon. Access to Bloomberg TV only adds more content to their mix.  A good number of customers are retaining their cable subscription and expanding their selection with streaming.  Those consumers can now finally receive the Bloomberg TV signal.

For Apple TV, these new content deals are a way to make their box a more valuable addition to the home.  In addition to Bloomberg TV, "Apple also added Disney’s Watch ABC app, Sony’s Crackle and the Korean TV app KORTV to the Apple TV Wednesday."  It also helps Apple to drive the value of its $99 box and encourage more purchases within its iTunes library.  And for both Apple and Blomber, I see a win on both sides. 

Sports Makes It Hard To Be A Cord Cutter

As many household know, sports fans can be crazy.  We will do most anything to watch our teams.  Out of market football fans find solace with DirecTv Football package while cable homes rely on NFL Redzone.  And for every type of sports interest from football to baseball to soccer to tennis, there is a channel or two devoted to it.  Which makes cutting the cable cord to watch the array of sports on TV almost impossible. 

The article in MarketWatch may represent more of a soccer interest but the author recognizes just how difficult it is to get access without paying for cable service.  An app here or there, an illegal streaming site perhaps, but the challenge in finding specific sports content without cable, "has made cutting the cable cord so difficult, if not impossible. "  Sure we can drop by the local pub to watch our games, but the cost of eating and drinking might just start to outweigh the cost of cable, as well as our own weight. 

Not every one is a sports fan, but there are enough in each household that cable cord cutting won't be at much risk till all games can be streamed a la carte.  And that is why broadcast and cable networks are willing to shell out big money for sports rights to air on their channels.  It is the glue that keeps us tuned to cable television.

Content Consumption By The Numbers

20 Crazy Santa Claus Photos
19 Snacky Foods
18 LOL Memes
17 Unselfish Selfies
16 Inexpensive Gifts
15 Best Movie Lines
14 Victoria Secret Lingerie Models
...
You get the picture.  Lately, web pages are filled with numbers with eye catching graphics and compelling subject lines that want us to click page after page to get to the number one reason. It is the success of David Letterman's Top Ten List that has been reworked for the web.  And the bottom line, more pages consumed, more time spent with the website, and more ad impressions. 

And who is doing this "content by the numbers" game well?  Almost everyone these days.  From Buzzfeed to Huffington Post, you can catch articles like "17 Santa Claus Photos That Make Your Skin Crawl" to "11 Things You've Always Wanted To Know About Lesbian Sex But Were Afraid To Ask".  From unusual to titillating, these headlines keep our fingers clicking on the pages, with photos, videos and articles to view, as well as display ads, pre-rolls, pop-overs and pop-unders, and everything inbetween.  It seems we are caught up in top 10 or whatever number suits your fancy.  So have fun clicking.  Me, I'm off to Business Insider to learn about "23 Spin-Off TV Shows That Totally Bombed".


 

Cable Convergence Part 2

Just because this morning's blog was about consolidation on the operator side doesn't mean that programmers aren't in play too. In my last paragraph, I suggested that smaller independent should consider merging with larger programmers.  Well, Variety has just learned that Discovery Networks, home for Discovery, TLC, and Animal Planet, may be kicking the tires on Scripps Networks (SNI), parent of HGTV and Food Network.  According to the article, "Knoxville, Tenn.-based SNI has been seen as a prime acquisition target for some time."

True or not, the one thing that can be stated, cable consolidation will only continue.  "If anything, a Discovery-Scripps tie-up may just be the beginning of further dealmaking in the sector. AMC Networks, Starz, Viacom and even Discovery itself have been mentioned as possible acquisition targets."  So in the coming weeks we may see changes on both the cable operator and cable network sides of the business.  

Cable Content Convergence Not To Fear

Today's NY Post talks about smaller, independent cable programmers fearing distribution growth from cable operator consolidation.  "The biggest fear is that a takeover by an operator paying higher fees of an operator paying lower fees will result in smaller programmers being offered the lower fees across the combined, larger system, executives and industry insiders said."  But that is true for all cable programmers.  The other fear is that it gets harder for smaller cable programmers not already distributed to gain a larger footprint as their are less cable operators to negotiate with.  In some cases, a programmer on one operator might even get dropped as the system is merged with another cable operator. 

For cable operators, consolidation means opportunities to renegotiate license fees lower as a result of exceeding certain subscription benchmarks.  A programmer in both consolidated properties will directly feel the effect of lower revenues per subscriber without any increase in subscriber size; the cable operator gets more cost efficiencies.

Gaining space on a cable operator has never been harder and requires deep pockets to spend "marketing dollars" to the cable operator for a channel spot.  I can only assume that an independent channel like Al Jazeera America must have spent a fortune to get back on to Time Warner Cable.  But they may also worry that if Charter acquires TWC that their deal could backfire. 

But cable consolidation should not be viewed as "bleak" according to one independent programmer. The rise of OTT means that other platforms exist to reach consumers.  There may not be high license fees to start but such was the case with cable in the early days, as well.  But OTT platforms would love to make themselves more valuable and interesting to consumers.  Independent programmers should be strategizing where to best position themselves.  Whether it is on gaming platforms like XBox One or Sony's PS4, upstart Aereo, or even struggling platforms like Intel Media.  And don't forget Roku, You Tube, Hulu Plus, and others.  Sure cable operators have the dominant platform today, but not the only one.

Of course there is one other way to try to get on a cable operator platform.  Smaller independents might just want to consolidate themselves.  Perhaps Discovery, ABC/ESPN, or NBCUniversal would be interested in acquiring you.  It is a dog eat dog world and the challenge to grow is to look outside the box or risk being eaten.

Apple Invades China

Despite some concerns that Apple didn't build a cheap enough iPhone, come this Thursday, "China Mobile, the largest wireless carrier in the world, will start taking pre-orders for Apple's iPhone".  And yet the expectations are running high that the iPhone will quickly gain significant market share.  Perhaps staying as a premier brand with a high price point along with the recent release of its iPhone 5s, with a gold back, China might just fall in love with the iPhone just as the US and other markets do. 

Of course, once China Mobile has the iPhone then so do consumers gain access to the iTunes library and the opportunity to buy apps, music and movies.  And for me gaining more users into the Apple infrastructure means access to more of Apple's products including iPads, Apple TV and more.  The China Mobile launch is certainly a big deal.

Time Warner Cable, For Sale Or Not

The year is close to ending and the M&A guys would love to announce one more deal before the end of the calendar year, but Time Warner Cable, may be playing a game of will they or won't they.  According to future CEO, current COO, Rob Marcus, denied the Bloomberg report that he was willing to sell at the right price but was in fact in it "for the long haul".  Of course despite the will they or won't they thinking, Charter has expressed interest and Comcast may be talking to its bankers as well.  Given the push toward broadband and the need for more efficiency by the cable operator to expand, Time Warner Cable may be in fact negotiating how such an acquisition could take place and how might current management be affected.  I suspect that a deal will get done and I don't see how Comcast can be involved unless they are willing to trade some systems to Charter for others.

NBC's Sound Of Music Steps In The Right Direction

Ahh the challenges of live television, missed marks, fumbled lines, sound issues, but still what a joy to see.  While the acting on last night's show may not be golden, the singing certainly was.  And I must give NBC high marks for doing something that rarely gets done anymore beyond sports and awards shows.  Live Television.  "30 Rock" did it a couple times and now a 3 hour theatrical production.  I have yet to see the ratings but I suspect that many people tuned in to watch.  I also expect to hear that others recorded it to watch at their leisure.  It may have had its flaws, but it is a great plus for broadcast television. 

I must admit to reading with laughter the snarky remarks coming from Twitter.  It offered tremendous fodder for creative commentary.  But it also indicated that many people were watching it.  While I personally like when theatrical shows are shown from the Broadway stage and in front of a live audience, I have to commend the set direction and flow from one set to another as well done.  The acting showed how important it is to have experience on the theatrical stage, but the singing was terrific.  I understand that the music was prerecorded which misses the extra appeal of a live orchestra.  And without an audience to applaud, the timing of the show was unimpeded, letting the production end at the planned time.  But it lacked that extra energy and isn't that what "LIVE" is all about.

So my hope is that broadcasters look at this production as a ratings and financial winner and plan to do more live programming.  It has been long missing on television and is a refreshing change to what is currently being shown. 

Microsoft Adds More Debt...Why?

With Microsoft launching its latest gaming platform, Xbox One to solid revenues and planning a change to its executive ranks with the retirement of Steve Balmer, the latest news may make you wonder.  According to Bloomberg, "Microsoft Corp. (MSFT) sold $8 billion of bonds in dollars and euros, a record offering from the world’s largest software maker".  Perhaps one reason is to take advantage of lower interest rates as many speculate that they will be rising; Microsoft says that the funds will be used for "general corporate purposes". 

Certainly, Microsoft has watched as Google, Samsung,  and Apple have taken the lead in the hardware race.  Their tablet, the Surface 2 lacks the buzz that other tablets offer.  And both Google and Apple have invested in the infrastructure to provide content to their devices.  With PC sales waning, Microsoft's success with Office may diminish too.  Today their best new product is the Xbox. 

So perhaps, Microsoft may be wanting to enlarge its cash war chest for a possible purchase.  A cable operator like Time Warner Cable or content creator like AMC Networks,  or perhaps an OTT content distributor like Netflix.  Where does Microsoft want to be in 5 years and what do they want to be known as, a hardware company, software company or a content company. 

Should Native Advertising Be Regulated?

As consumers become less susceptible to clicking on display advertising, web publishers have relied on other technological moves to assure that ads get seen and hopefully clicked.  From launching web pages under and over existing pages to expanding content to fill the screen.  All done to assure that access to free content enables revenue monetization.  While pre-roll of ads on video is one way to force consumption, another has been to use advertising that looks like editorial to encourage viewership.  Dubbed native advertising or content sponsorship, it has quickly become a successful means to increase web clicks.  Some sites highlight the block to indicate that it is sponsored, others might actually put a footnote or header to indicate it.  And still others let the native ad content blend seamlessly with the other editorial content.  But should it be a case of buyer beware?

Such was the case of a conference held to discuss native advertising.  "Consumer advocates, publishers and advertisers who spoke at the event generally expressed agreement with the idea that Web sites should make clear when they are running native ads -- at least when the ads directly hawk a product."  An example that has been used is that of a drug company that promotes an article about management of a health problem and cites its drug as a possible remedy but not other alternative options.  When not labelled clearly as sponsored, consumers may be confused in thinking that the drug mentioned was an "independent analysis" and a "best remedy"  And it is that possible confusion that has the FTC wondering how native advertising needs to be distinguished from editorial for the consumer.  

Not all native advertising sells products or services.  Some are actually used for content recommendation to encourage viewers to visit another website.  " In some cases, the sponsored content is just an item that advertisers think readers will find interesting.  But some advocates say that even those types of native ads should carry a disclosure, so consumers will know that the article didn't originate with the publisher."  So should all native advertising or sponsored content be treated equally?  I maintain that some notification may seem helpful, users are apt to overlook.  The idea of "caveat emptor" or buyer beware still should hold true.  Should these ads become more deceptive the consumer will engage and fight back and the marketplace will feel the effect. 

Charter Does Need A Cable Merger

In discussion about a possible merger, Charter CEO Tom Rutledge said that they don't need Time Warner Cable.  Yet as we are well aware, what we say and what we do are not always the same thing.  In a classic dating analogy, showing a bit of disinterest can sometimes work to make the other more attractive or to encourage more interaction.  So regardless of what is being said, it is painfully clear that Charter needs a consolidation partner and Time Warner Cable, given its size, becomes the best way to achieve scalability and cost efficiencies.  They also give them access to more of the LA DMA as well as to the entire NY state, including the number one DMA, NYC.  Other smaller operators would be able to achieve such immediate return, although Cablevision, is a cache unlike other markets. "Analyst Amy Yong of Macquarie Capital wrote 'It’s hard to ignore that Cablevision has some of the best zip codes in the country including New York, NY, Fairfield County, CT, and Bergen County, NJ. It just wouldn't return much cost efficiencies at the start.'"  

So I am reluctant to believe comments by the Charter CEO as anything more than posturing.  Major stockholder John Malone has other plans.  As an innovative financial whiz who has been quite successful in managing a portfolio of media companies, Malone clearly has a strategic plan in mind and knows that the pipeline to the home is crucial.  Charter lacks major markets and needs to merge to gain better coverage of the US market.  And if that means swapping and sharing with Comcast to get a deal done, Malone will move in that direction.  We have two major telcos, two major satellite companies, and perhaps we are getting closer to two major cable operators. 

Netflix Pushing Family Fare Exclusive Content

Let's face it, sometimes it is hard to say no to your little boy or girl.  And with the rise of tablets, our kids are sharing with each other all the great content they are watching online.  Netflix seems to recognize the value of programming that speaks to the younger audience and pushes their parents to purchase on their behalf.  And Netflix is becoming the must have purchase for the home. 

So, add another reason why more and more families may be buying a Netflix subscription for the Holidays.  "A deal with DreamWorks Animation represents the streaming service's largest push yet into original programming. Turbo F.A.S.T., a 26-episode series based on Turbo, a feature film about racing snails, will be released Dec. 24".  And more kid friendly shows are in the works.  Most importantly, these deals represent exclusive windows in which other streaming platforms won't have access. 

The kid demographic strategy offers a compelling reason for Netflix to pursue.  "Subscribers who watch kids' shows on Netflix tend to use the service more often, (chief content officer Ted) Sarandos says, and presumably see a better return on the $7.99 monthly fee. And kids often watch the same episodes over and over".  And an added benefit for the parents and ultimate purchaser of a Netflix subscription, no advertising to their children.  So given the rush to buy the next iPad or Surface or other mobile device, comes the need to buy content to run it.  And Netflix is making the case for being the perfect stocking stuffer. 

When Ads Are Really Content

Today's Wall Street Journal has a terrific article that looks at the rise of sponsored content.  Some websites clearly differentiate what is true editorial and what is a sponsored advertisement; others, have found the art of the "blurred line" between the two.  But given the success of branded content over traditional display advertising, the trend is moving more to content advertising.  In fact, "Spending on sponsored content is expected to grow 24% to $1.9 billion this year, a faster growth rate than for most other forms of digital marketing."  It is not necessarily a new way of advertising, but it is seen as potentially deceptive when the consumer cannot differentiate between ad and content. 

The success of sponsored or native ads means that it will not be going away anytime soon.  Whether it leads to some type of regulation remains to be seen.  The IAB (Interactive Advertising Bureau) has already formed a task force, according to the article, "to create their own standards."  Self regulation certainly beats federal regulation. 

Amazon Might Want Drones Over US Post Service

Just a month after announcing its partnership with the US Postal Service for Sunday delivery, Amazon now would like to deliver your packages by drone service. During this Sunday's 60 minutes, CEO Jeff Bezos announced, "Prime Air, a futuristic delivery system that the company says will get packages into customers' hands in half an hour or less, delivered via unmanned aerial vehicles."  Will Star Trek transporter service be coming soon after?

While initially appealing, one wonders just how practical such a delivery concept it can be.  Certainly package size and weight matters as does location and assurance of delivery.   And what are the insurance implications if a drone fails and falls from the sky, let alone if the package drops.  Such a delivery mechanism may be some day, but it is hard to imagine it being used within the next decade.  I have more faith in the US Postal Service to deliver the goods.