Virtual Reality Is For Porn

We recently saw the show Avenue Q, a slightly risque musical parody of Sesame Street, first produced on Broadway about 15 years ago.  In today's NY Post, we learn that Oculus VR, now owned by Facebook, sees its next growth opportunity through the porn business.  Not an unlikely combination.

It seems that new technology has often found its early adopters through the porn industry.  The rise of the VCR brought many new owners for its easier access to porn videos; the rise of the internet has also been directly connected to the online connection to porn as well.  In fact, in Avenue Q, a popular song is based on this very fact, "The Internet Is For Porn":



The show may now feel a bit dated, but perhaps its rewrite could have this song changed to "VR Is For Porn" instead. According to the Post, "VR porn videos already number north of 1,000 from professional studios alone."  That compares to only about 30 games available for release.  It may seem a bit titillating, but the success of VR may seem to find its initial success as a result of this connection to porn.  We will wait and see. 

Mobile Video Ads Work Better

What is the last display ad you recall seeing?  Frankly, my eyes gloss over most display ads; they are more a nuisance than informative, clogging up the screen.  Headers, verticals, even overlays clog our screens but may not be very successful.  Well, a research report from BI Intelligence says that video advertising is the best future for mobile and desktop screens. And that trend is continuing to grow. 

As you scroll down your Facebook or other feeds, you may notice that videos start to play automatically.  And they have been successful.  "In-stream video ads, including ads that play at the start, during, and after  video content, yielded click-through rates (CTRs) that were 18x higher than HTML5 banner ad units in February 2015, according to Google's Rich Media Gallery. "

Of course prices for video ads are higher than static ones, but if they deliver more ROI, then it is clearly a better value.  Will display ads go away completely, doubtful.  But an integrated ad buy that utilizes both strategies on a page certainly should get more notice, better brand engagement, and hopefully more click throughs. 

Are We Being Watched And Listened To?

I most recently met a colleague who had taped over the camera on her laptop.  She was concerned that the device could be accessed without her knowledge and she could be watched without knowing it.  Her concern may be a valid one; Cameras have become a way of life, whether used for traffic enforcement, shoplifting, security.  And we seem to be ok with it.

The latest concern is that the next generation of smart TVs from Samsung may also be listening to us as well.  With a capability to use verbal commands to instruct the television set what functions to initiate, comes some interesting news.  But buried deep in the privacy policy for their set is a notice that the set will also share all communication that it hears.  Surprising, it shouldn't be.  Business Insider also tells us that "the Siri dictation feature is sent to servers that reside in the US and that Apple, its related companies and agents have access to the contents of what is dictated."

Privacy may simply be a thing of the past.  As more and more devices connect to the internet, our actions and our words get more easily captured.  What others decide to do with it, whether to use for safety and security, advertising, or to uncover private and personal information remains to be seen.  But what should not be a surprise is that someone is watching and listening to us.  And so we become more responsible for our actions.  

We've Got A Security Problem Here

2014 may best be known as the year of the hacker.  Most prominent has been the hacking of Sony, causing personal emails to be shared, a movie to be denied, and threats to be held on management.  And most recently, Sony's Playstation network and Microsoft's XBox network have both been hacked as well, resulting in an overloading of those systems.  Gamers are furious and we can all fear that 2015 will consist of even more cyber security problems. 

The simple truth is that our internet security is at risk for all of us.  As long as we are connected to the web, we are subject to potential hacking of our private data.  And there are so many different ways that hackers try to get us, from bogus emails to tapping our devices when we use an open WIFI connection.  Secure is simply not secure enough.  And from individuals to huge corporations like Sony, we have huge security issues.

For some, the idea of hacking is just a game, a challenge to see if you can break the code.  But for others, the purpose of hacking may be more sinister.  Locks and passwords may not be enough; if there is a will, there seems to always be a way to break the code.  Isn't that what the movie, The Imitation Game, is all about.  Whether for good or evil purposes, many love the idea of a good challenge.  And we are constantly facing threats to our cyber data. 

2014 may represent a pivotal mark, but it wasn't the first.  Last year, it was Edward Snowden that shared classified government information.  We also had the hacking of financial data from The Home Depot and Target. And next year, I am quite certain that more corporations will face similar hacking issues.  We should all be worried; unfortunately, as long as their is secrecy and privacy, there will be others trying to expose it.  For good or evil purposes, it will be a constant in our lives. 

Amazon To Offer Ad Supported Video Streaming Service

Amazon's plan to rule the online universe has taken a fresh turn with plans to expand its video strategy.  Currently offering Amazon Prime, a $99 a year service that includes video streaming, free shipping, and more, its next move is a separate free, ad supported video streaming service to attract a larger audience.  While no specific launch date was announced, the service could appeal to cord cutters among others.  And while some think it could hurt the Netflix subscription model, I actually believe it will only help it.

For Amazon, it offers another way to monetize its exclusive online content, shows like Alpha House and the new kids series, Gortimer Gibbon's Life On Normal Street, as well as acquired programs from HBO including The Sopranos, Deadwood, The Wire, and more.  Adding an ad component will also help track and perhaps even enable its advertising to lead to online purchase behavior (on the Amazon website, of course).  The data of users to the service coupled with their purchase behavior could bring premium ad pricing.  Plus, the appeal of the Amazon free streaming service might eventually upsell them to a Prime customer.

Why shouldn't Netflix be worried?  Viewer consumption of programming is based on appeal and interest.  With its blend of original and acquired TV and movie content, and a relatively inexpensive monthly price, Netflix customers will remain as long as there is always a breadth and depth of content choices.  But Netflix might just consider a free ad supported service to both monetize its video content and drive adoption to upsell to its subscription service, too.  And Netflix, because they are not tied to their own e-commerce model could also offer a click through to other online retailers to purchase after viewing an ad.  Netflix might like a piece of that action, as well.  The only downside for Netflix, that customers drop the paid subscription for the free model, but it might be worth the risk.

Netflix Surges As More Consumers Join

I joined Netflix first when it offered DVDs through the mail.  I lasted a year.  I preferred the immediacy and choice that cable offered.  How simple to scroll through on demand and watch shows and movies from a wide sources of content.  My daughter encouraged us, after the latest snow day this winter, to join Netflix again.  This time for its streaming content.  And we are now loyal users.

For each of us in the family, Netflix offers and recommends content that matches our interests.  Easy to discover content, easy to use, and easy to watch.  Like many others, I am currently fixated on Orange Is The New Black.    And it is fair to say that some of my TV time has switched from cable to streaming. 

I take my own experiences and can easily see why Netflix has been doing so well.  Since their misstep a few years back with trying to separate their DVD business from streaming, they have recognized the value of original content and used it to drive subscriber growth.  Whether it is OISTNB or House of Cards, it has led to both Emmy nominations and awards.  With their quarterly earnings announcement, Netflix continues to attract viewers, "signing on 1.69 million during the period, extending its total to 50.05 million, of which 47.99 million are paid subs."  In the US alone, they have now over 36 mm households.  And while the stock market always wonders how long such growth can last, I expect Netflix will find new revenue models to further improve their value.

signing on 1.69 million during the period, extending its total to 50.05 million, of which 47.99 million are paid subs. - See more at: http://www.multichannel.com/news/tv-apps/netflix-pushes-past-50-million-subs/382645#sthash.b3NKB1Z8.dpuf

signing on 1.69 million during the period, extending its total to 50.05 million, of which 47.99 million are paid subs. - See more at: http://www.multichannel.com/news/tv-apps/netflix-pushes-past-50-million-subs/382645#sthash.b3NKB1Z8.dpuf

This years Emmy awards are next month and most likely Netflix original shows will win more statues.  That kind of publicity will cause more households to want to watch its programs.  And once they watch one episode, the Netflix feature that automatically loads the next show to start will keep them tuned in.  It encourages binge viewing, but it also encourages loyalty. 

Sirius Continues To Grow

Each year the Auto Show comes to New York and each year, new model cars and concept vehicles are shared with the public.  And on the showroom floors it seems every new car being sold offers a subscription to SiriusXM even as some start to remove cd and dvd players from the dash.  The rise of digital content and satellite radio creates a complete entertainment solution. 

For Sirius, consumers of new cars are enjoying their 3 month free trial of the service and more and more seem to be deciding to keep paying a monthly subscription.  "Sirius added 173,480 net paying subscribers in the quarter ended March 31, raising the total to 25.8 million."  With subscription fees and advertising, revenues for the quarter rose as well, despite competition from digital media and traditional radio. 

So what does the future hold for Sirius?  Are they an acquisition target or is there a limit to their growth goals?  The good news, because of advertising as well, Sirius had a "better-than-expected 11 percent rise in quarterly revenue".  Given the quarter subscription increase was only 0.68%, the challenge continues to be how to create more meaningful growth for the business.  For now Sirius has a good story to tell, its what happens next that should keep us tuned in.

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.

My Son Has Found Defiance

While he is indeed entering adolescence, Defiance is not how he treats his parents; rather, it is a multi-media piece of entertainment that has entered our home.  Even before I knew of the TV series that premiered this week on SyFy, I knew about the game.  He pre-ordered it from Amazon and waited patiently (and a little impatiently) for its arrival to play on X-Box.  He got an early chance to play an online version before its arrival too.  And he was clear that we needed to record the series for his viewing pleasure.  He was hooked.

What is Defiance?  I have no idea.  I haven't watched him play it or had a chance to watch the show with him.  But I agree that it is more than just a TV show or online game.  "The game and show have been pitched as groundbreaking transmedia, thanks to how they have been designed to complement each other and build out the world of its characters. And digging into the way both elements have been created to co-exist, it’s hard to deny the potential in the approach."  To make this work takes a lot of collaboration.  Plot points must co-exist both on the TV screen and online.  For viewers and players like my son, they make for a far richer experience.  Matching game play to linear viewing may be the biggest challenge of them all.

But does it translate into greater monetization?  The game side of the business model doesn't seem to need a lot of pushing to do well.  Some game success can be equated to box office size returns.  But rating should swell if users are engaged with the online characters and buy in to them on the TV screen as well.   "That difference, according to (Syfy head of original content Mark) Stern, is by design. '[The show] is going for a broader, older demo, but [the game] is going for a younger and more male-skewed audience,' he said. 'Hopefully we’ll be able to pull more of that younger demo into our channel and push older audience into the game.'”  Building interest to the demographics is key to higher revenue returns.

Content creators are sure to watch this series and measure the value it produces.  The success of this "transmedia" approach may just foretell the future of television programming.  How well it works remains to be seen, but it may just be the beginning of more collaborative online and on-screen ventures.

Charlie Ergan Speaks

It's worth checking out the article on Charlie Ergan in today's Wall Street Journal.  There has been quite a bit of press recently on his company, Dish Network.  From his latest DVR that completely hops over ads to his fight with AMC Networks and their former parent company Cablevision over Voom, Charlie doesn't seem to mind a battle. 

Although the article speaks only about his Auto Hop service, he clearly has opinions on the future of TV and advertising.  "With the new service, Mr. Ergen aims to force the networks to develop 'more meaningful' ads, using, for example, demographic targeting of viewers."  But how can networks show more "meaningful ads" if ads are immediately skipped over.  What does Charlie really want?

Perhaps his real point is that the networks are offering the same content with less ads on other platforms, like Hulu.  Viewers, like his children, are bypassing cable subscriptions for the web.  "Mr. Ergen, 59 years old, says four of his five children have stopped paying for a TV subscription, and the fifth is living home."  Viewing habits are changing whether Dish is skipping ads or not.  His ploy may be to find ways to get networks to lower their costs to him so he can lower his costs to subscribers and win them back.  At the end of the day, he certainly has gotten the attention of the network executives.

So what is Ergan's next move?  He is also holding on to wireless spectrum with an opportunity to build out a competing service.  The costs to build are enormous and Ergan may want to consider a partnership with an existing mobile carrier.  AT&T couldn't do a deal with T-Mobile.  Perhaps Charlie can.  The future is two way wireless of voice, video, and data and Charlie Ergan seems intent to compete with a cost effective model. 

As to the networks, the Auto Hop feature is already out of the box.  You can't turn back technology.  Tivo and the DVR was the first step; consumers want to skip commercials.  As Ergan intimated in the interview, a new creative approach is needed.  Less breaks and more innovative and targeted ads could help.  Viewers are changing habits and it is time to take notice.

Are QR Codes Working? Maybe!

As a marketer, QR codes were meant to drive engagement with print materials and validate through analytics the appeal of print. For consumers, QR codes gave their smartphones more functionality and returned more relevant information. They were the secret source that put print and digital into the same room. Today's newspapers use QR codes to give more detail behind the story and ads include QR codes to drive prospects to their websites. But are these ugly squares of lines and shapes successfully transforming the business?

This article written in iMedia Connection actually defends QR codes. And while the title of the piece may assume otherwise, consumers are aware of QR codes, how they work, and how they can be of value. The problem is not with the consumer using QR codes, but with the advertiser and marketers relying on them as a tactic. "Instead of placing a QR Code on an advertisement at the last minute, marketers and creatives need to incorporate codes into a campaign during the early stages of development, and they must do so from the consumer's perspective, not their own. Just these few best practices alone can help boost consumer interaction and response rates."

An interesting read, especially as smartphones continue to become the de facto phone in our daily lives. And as phones can more quickly capture and translate these QR codes, engagement will improve as well.

Interactive Better Served With Mobile - The Convergence of TV and Web

Are you watching TV when an ad shows up and on top of the ad is a box inviting you to hit ok to receive more info on the ad? Are they intrusive or helpful? Have you reached for your remote to press the ok button? Or simply ignored?

Perhaps you prefer to interact with your TV on a different device. Through an audio signature, an app on your smartphone or tablet will connect you to the appropriate site. "It then serves up links, coupons or music downloads corresponding to what it hears on the tube through smartphone microphones." Intrusive or helpful? It seems in an app world, unless you proactively open your app, you are immune to these messages. It is your call to receive these signals. In the case where pop up boxes simply appear on your TV screen, they are not as easy to eliminate.

An innovate use of mobile ad interaction comes from Shazam. "One of the earliest users is Old Navy. The retailer's chief marketing officer, Amy Curtis-McIntyre, talked about the company's Shazam ads at Ad Age's Digital Conference this past spring. When consumers used the app to identify any of the songs heard in Old Navy spots, styling tips, deals and key looks featured in the commercial popped up." An intriguing way to interact with a brand.

For networks, working to make their programming more highly involved, interactivity can work on many levels. It can lead to more loyalty with a program, it focuses the attention span to the programming, and ultimately the ads that run with it, and it better measures who is watching. "With listening technology that loosely mimics Shazam's, ABC launched apps to serve ancillary trivia in step with the now defunct TV show "My Generation" last fall and, more recently, "Grey's Anatomy," thanks to Nielsen Media Sync technology."

This relationship of multiple devices synced together is the future of interactivity on television, not intrusive pop up ads on the TV screen. TV programming and TV advertising can actually improve thanks to the rise of mobile devices in the home. As viewers get more comfortable engaging with programming through their iPads, iPhones, and other devices, improved measurement will occur and ad revenues will rise. Internet and TV working better together.

Smart TVs To Rule Over CableCards and Set Top Boxes

CableCard Set Top Boxes are nearing 30 million and barely half a million CableCards are in Tivos and non converter box devices. On the other hand, TV manufacturers have shipped over 60 million internet connected TVs in 2011 alone with more already in the home. "Television manufacturers will ship 138 million connected TV units worldwide in 2015 -- with more than half-billion connected TVs having shipped by then" making the CableCard and set top box less relevant in the home. "An increasing number of connected TVs will include wireless support to be able to deliver content to devices such as smartphones and tablets in the home. According to DisplaySearch's forecast, more than 98 million TV sets with 802.11 wireless networking built-in will ship in 2015." The set top box has some catching up to do.

Remember that a number of years ago, CE manufacturers tried to play in the same sandbox with cable but the industry was not eager to allow outsiders in. The CableCard was a means by the FCC to force cable operators to enable outside devices for cable programming. But the CE manufacturers did not see the value of putting a CableCard slot in their machines. They preferred a more simpler approach, valuing the consumers need for connectivity to the world wide web. And the consumers' needs broadened to require mobile accessibility, wireless support was easily added. The CableCard remained stagnate, hidden under the stairway (a lame Harry Potter reference). It has yet to come out of hiding and the vast majority of consumers have no idea what a CableCard is. But they do know Netlix, Hulu, Amazon, You Tube, and Apple.

Dot Anything

Remember the good ole days when a 212 area code meant NYC, 215 meant Philly, and .com meant business web address. Well the proliferation of smart phones and websites means that there is a shortage and the we must continue to grow the numbers. "The new rules affect what the industry calls top-level domain names, the familiar dot-coms and dot-nets that end every Web address. Now, instead of having to use one of those existing forms, users will be able to end their addresses with the name of their company, such as dot-Ford, or their city, like dot-Berlin."

But with this growth comes the need for zoning and now it seems it is harder than ever to know where a phone number is generated from or where a website originates. Exciting , yet problematic. "The shift, however, could also cause anxiety and disputes among governments, companies and other entities in safeguarding their brands and identities in cyberspace. Those seeking religious or political names, for example, could lead to sensitive situations."

Nothing can stop the proliferation of addresses, but certainly governance can help to better manage it. It certainly may hurt squatters to websites who hope to force brands to pay for rights to their name. Yet I am confident that new opportunities will present themselves. And in cases when companies with the same name in different industries each want access to their domain name, challenges will arise as well. It is the start of a whole new internet and let the battles begin.

QR Codes Invading Retailers

QR codes, those 2 dimensional, squiggly line boxes, are appearing in ads and on products. Go down the aisle of your favorite store and you may just start seeing them on the packaging of products. "The square patterns found in the corner of print ads, in store aisles and elsewhere can be scanned by consumers' smartphones and tablet computers to open a Web page, play a video or even place a call."

And while few consumers are using them, interest seems to be growing. Unsure how a product works, get a quick demonstration; download a coupon for just taking a snapshot. I also see great opportunity to capture information about a product and perhaps add your own notes. I'd love to see wine bottles add QR codes so I could remember which ones I may have tasted and to record my desire to buy again or not.

Applications for such use of QR codes abound. Whether in grocery or home improvement stores, real estate or restaurants, department stores or movie theaters, many companies could benefit from the addition of a QR code. And with their appearance on more and more print ads, awareness by the public will only grow.

Cable's EBIF Is Dying On The Vine

What happens when an industry is so resolute in its plans to protect it's turf against the competition that it draws a line in the sand only to see others attack from a different front. They lose. Such is the case in battle and so too in business. To stay so narrowly focused and unbending to changing external factors is a recipe in disaster. And so too the ultimate end of EBIF, Enhanced TV Binary Interchange Format, designed exclusively for cable.

"It was invented as a way to add more oomph to the fielded base of digital cable set-top boxes, which obsolesced almost before they were installed. Ten years ago." But the world became Internet Protocol (IP) based and TV and other consumer electronic manufacturers, found more flexibility working with IP than with the cable operators and their EBIF technology. The result are not helping cable with the rise of more over the top competitors offering similar video content. These competitors found the different front and did an end around on the cable operators.

Can EBIF and IP work together? Some Apps are working to make it so for better connectivity and TV on the go. But it may not be the ideal technological approach. Ever wonder what those blue pop up screens are that come up on your TV for on demand movies and other ads. They are achieved with EBIF. And they look like decades old graphics. Clunky and downright ugly. Certainly not as clean and easy to interact with as other means. Communication has changed and EBIF has not. The consumer seeks more convergence and ease of use in their interactions with their video content. EBIF has to change or cable operators will continue to lose.

Will TV Watching Become A 2 Screen Experience

As tablets and smartphones invade our daily lives, we are using them more. Not just to check e-mail or make a phone call, but to read a newspaper or magazine, play a game, or check on a baseball score. These small screens are so pervasive in our lives that they remain in use even as we watch TV.

But why do these two devices, the TV and the tablet, need to be doing different things? What if the smaller screen was an extension of the larger one. There are too many instances where it would make sense. Watch a sitcom on the HDTV and blog on the iPad with others in real time. Watch "Who Wants To Be A Millionaire" and play along on the smartphone. Watch a cooking show and download the recipe. Watch QVC and shop. Two screens working together to augment the viewing experience.

For cable companies, it brings another level of interactivity and lends itself to a second screen for advertising. While cable pushes forward with interactivity on the big screen, it is not what the customer wants. They do not want the clutter on the big screen. But coordinate it with a small screen and it may prove a winning combination. Clutter aside, the tablet and smartphone aren't going away. A coordinated effort could be the next generation of viewing behavior.

There's Money In That Broadband Wire

First Comcast announces a loss of video subscribers with a gain of phone and internet subscribers; today, Cablevision announces the same news. In fact, the gain of phone and internet subscriptions far outpace the loss of its cable subscribers. As a result revenues for both Comcast and Cablevision are up for the first quarter. It is also important to note that profit margins for the video business is far narrower than from phone and internet.

It certainly suggests that owning the pipeline is a smart move, more so to provide interactive connectivity to the home. Cablevision increased its subscriber base through it's acquisition of Bresnan late last year. Comcast, who is already the largest cable operator, may seek to streamline its areas of business to assure more economies of scale. Rumors are floating that Comcast may deal their New York Metro DMA systems to either Cablevision or Time Warner Cable. Comcast is unlikely to be the dominant provider in NY unless it decides on an acquisition strategy. With the spin off of Rainbow still planned by Cablevision, perhaps it allows the Dolan family to put it's systems up for sale as well. Comcast may want to consider that opportunity although it would require another fight with the FCC. If that is the end game, Comcast may just want to retain it's NJ and CT systems.

Bigger Push In Over The Top Content Could Hurt Cable Operators

Cable operators should not be surprised by this story in Ad Age. "A group of deep-pocketed companies, including Microsoft and Verizon, are exploring delivering TV service over the web, a move that could disrupt the economics of cable TV and lead to a new generation of "virtual" cable companies that provide TV without owning the pipe into the home." XBox Live is there already; it is simply trying to dominate the home screen in a bigger way. And don't discount Sony Playstation and Wii as well as the rise of web connected TVs. The push is on to bypass cable subscription to bring content directly to the home.

And as these businesses are competing in the cable space, cable operators are doing the same with mobile apps to access cable programming. "The talks point to a future where consumers have the option of buying broadband internet service from one provider and TV service from another. It also promises to make the current dispute between programmers and cable companies over the right to stream content to new devices like iPads look like child's play." A sea change that could change the relationship between cable operator and consumer.

Cable operators with a broadband pipe to the home will have some leverage. The challenge will be in differentiating the value of the service from other broadband suppliers. Access to broadband may not require that a home be wired and wireless players could hit cable revenues hard. If broadband access is seen as a commodity, ultimately the lowest priced service will come out the winner.

Are we talking a revolutionary change in viewing habits; obviously not. But we are seeing a rise in cord shaving and ultimately cord cutting. Early adopters are already using over the top programming while eliminating their cable bill. Others are actually paying cable higher fees for broadband service to improve their streaming. But the rise of alternative players and the competitiveness of broadband services will force cable operators to rethink their business strategies.

Webby Nominations Announced

Another Webby On The Mantle. Hey a 5 word acceptance speech, typical for winners of the annual Webby Award. "The list included Justin Bieber, Angry Birds, Arcade Fire, Foursquare and the Old Spice guy. Presented by The International Academy of Digital Arts and Sciences, the awards will be handed out on May 3." It is time to vote!

Nominations are across numerous categories, not just viral videos. There are awards for websites, interactive advertising, and even mobile. The award recognizes excellence in digital media and legitimizes online video. A worry if viewers ignore their cable subscription and prefer more online content.

So check out some very inventive campaigns, great websites, and wonderful videos. And when it's time for the winners to be announced, enjoy their 5 word acceptance speeches. Its a Truly Remarkable Pleasure - - 5 words!