Tivo killed the ad inserted spot. VOD tries to disable fast forwarding, but people always find away around it. Success in monetizing content requires smart advertising and a keen understanding of how much is enough. The article in the New York Times demonstrates that branded entertainment can fund projects and can uniquely break through the clutter to get noticed. As the article suggests, "Integrating a brand or product into the plot of a movie, a TV series or a video game is intended to thwart the increasing ability of consumers to zap, zip through or otherwise dodge — so to speak — traditional advertising tactics like television commercials."
Certainly these are not new ideas. The golden age of television was all about sponsors who integrated their messages into the title or plot of the show. Uncle Miltie and his Texaco Theatre, the Jack Benny Program weaved products like Lucky Strikes and Jello.
Ultimately, the success of the sponsorship and promotion rests on the appeal of the content. Viewers will watch "Soccer Mom" if the storyline appeals, the actors are engaging, and the interest is peaked. First and foremost, the content must be engaging and interesting; otherwise, it becomes seen as a long commercial message to avoid.
Thursday, March 27, 2008
Wednesday, March 26, 2008
Strike Effect? Online Video Jumps In February
Well, people are not bored with online video. In a short month, video usage jumped back up in February, slightly higher than December. Silicon Alley Insider reports the topline Nielsen VideoCensus info for the last three months, including avergage time spent viewing per month:
December - 6.2 billion/130 mins
January - 5.9 billion/124.4 mins
February - 6.3 billion/130 mins
At the same time, Nielsen broadcast TV ratings were down 20% in February, perhaps finally due to the effects of the writers strike and lack of original programming on TV. My family, like most I believe, were tuned in many nights in a row for all the American Idol shows. Will online viewers be as loyal to their web shows as they are to their TV shows. An these usage numbers need to be dissected further to determine what types of video are of most interest.
I am a fan of short form video on the web, but I wonder if the low barrier to entry will simply create more glut and less quality. Will the 80/20 rule apply and the vast majority of views come from aggregators like Hulu, Joost, You Tube, and perhaps also broadcast websites. Or will the glut of bad video create dissatisfaction which in turn causes people to start to turn off online video for other activities like gaming. All bets are on...
December - 6.2 billion/130 mins
January - 5.9 billion/124.4 mins
February - 6.3 billion/130 mins
At the same time, Nielsen broadcast TV ratings were down 20% in February, perhaps finally due to the effects of the writers strike and lack of original programming on TV. My family, like most I believe, were tuned in many nights in a row for all the American Idol shows. Will online viewers be as loyal to their web shows as they are to their TV shows. An these usage numbers need to be dissected further to determine what types of video are of most interest.
I am a fan of short form video on the web, but I wonder if the low barrier to entry will simply create more glut and less quality. Will the 80/20 rule apply and the vast majority of views come from aggregators like Hulu, Joost, You Tube, and perhaps also broadcast websites. Or will the glut of bad video create dissatisfaction which in turn causes people to start to turn off online video for other activities like gaming. All bets are on...
Tuesday, March 25, 2008
Is Amazon's Kindle Taking Off
The more I see people carrying Amazon's Kindle on the train, the more I think that this could be looked back to be to books and reading what the Apple iPod was to music. The announcement that Tribune is delivering a new political magazine exclusively for this platform indicates that others see revenue opportunities from a subscription service. And Tribune is said to be creating more virtual magazines across topics like finance, travel, food, etc.
Would people buy Fortune Magazine for Kindle even if similar content is available for free on the web. Does Kindle morph into a web based reader. Will people be willing to stop buying books for electronic copies. And should Kindle come with an audio book component to add even more value. Amazon recently purchased Audible, so anything is possible. Newspaper and Magazines seem to have the bigger challenge in an online world to get virtual subscriptions when content is available free. How online content differs from subscription will determine viability for these products.
Would people buy Fortune Magazine for Kindle even if similar content is available for free on the web. Does Kindle morph into a web based reader. Will people be willing to stop buying books for electronic copies. And should Kindle come with an audio book component to add even more value. Amazon recently purchased Audible, so anything is possible. Newspaper and Magazines seem to have the bigger challenge in an online world to get virtual subscriptions when content is available free. How online content differs from subscription will determine viability for these products.
Monday, March 24, 2008
DOJ Approves XM Sirius Merger
While the Department of Justice has approved the merger of Sirius and XM Satellite, it is now the FCC's turn to rule. Given technological changes from the internet, including Apple and the ipod, free radio, and even direct to home companies like Dish and Direct TV, the FCC should let this merger proceed. The landscape of enertainment is changing...
Web Games On For Nets
Want to increase the number of hits to your site, want to improve the stickiness of the brand, want to keep your audience coming back for more, then online gaming seems to be the cure!
Tha data being released indicates the growing demand for casual games as well as its interest across most demographics. As the article points out, “If you look at our audience — which ranges from pre-schoolers to parents — gaming is the No. 1 thing from an entertainment perspective online,” Youngblood said. “So if we're to be relevant to this audience, we have to make sure we're offering content that they want.”
What struck me most interesting was the revenue coming from games. While online advertising is not discussed, it is clear that there is a benefit measured by usage of these sites. Nickelodeon saw over 20 million users come to their site in January.
Most surprising was that people were also subscribing to game sites "...DirecTV has signed up more than 135,000 subscribers with interactive boxes to its $5.95 per month service, which offers such casual games as Monopoly, Slingo, Scrabble, Solitaire and poker." A pretty piece of change to Direct TV; if I do the math, that is providing almost $10 million dollars of revenue from these gaming sites!
Gaming seems to work on all levels, as applications on social networking sites, as brand builders, and as I have come to learn, as ways to build and grow affinity and loyalty programs with customers. Across devices, gaming is the impetus for change in the entertainment landscape.
Tha data being released indicates the growing demand for casual games as well as its interest across most demographics. As the article points out, “If you look at our audience — which ranges from pre-schoolers to parents — gaming is the No. 1 thing from an entertainment perspective online,” Youngblood said. “So if we're to be relevant to this audience, we have to make sure we're offering content that they want.”
What struck me most interesting was the revenue coming from games. While online advertising is not discussed, it is clear that there is a benefit measured by usage of these sites. Nickelodeon saw over 20 million users come to their site in January.
Most surprising was that people were also subscribing to game sites "...DirecTV has signed up more than 135,000 subscribers with interactive boxes to its $5.95 per month service, which offers such casual games as Monopoly, Slingo, Scrabble, Solitaire and poker." A pretty piece of change to Direct TV; if I do the math, that is providing almost $10 million dollars of revenue from these gaming sites!
Gaming seems to work on all levels, as applications on social networking sites, as brand builders, and as I have come to learn, as ways to build and grow affinity and loyalty programs with customers. Across devices, gaming is the impetus for change in the entertainment landscape.
Sunday, March 23, 2008
Nokia Morph - the phone of the future
Concept video from Nokia of a futuristic cell phone that utilizes nanotechnology to combine function and form. It repels dirt, stretches to different forms, becomes wearable, and recharges from the sun. Definitely science fiction but fascinating to think what the cell phone could become. Watch an original episode of Star Trek; back in the 1960's, who would ever expect that the communication device used on that show would be exactly the kind of phone we use today. Makes you hope that this kind of phone could exist one day.
Friday, March 21, 2008
Second Life Voted Last Year's Most Over-hyped Trend
According to a poll of attendees at an Ad Age Digital Media Conference, Second Life was voted the most over-hyped media trend. While I have not found much interest in it personally, I have watched my son create avatars inside Club Penguin, Pirates Online, and to a certain extent, through Webkinz. Each allowed him to play in a virtual world and interact with others. Luckily for me, on a very limited level.
And while he sporadically goes to them, the impetus is the gaming, not the exploration. I believe for that reason, Second Life, as it stands today is over-hyped and is more fad than future. Content providers that create multiple platforms for their brands will find more success coming from these online worlds. Watch Hannah Montanah or Pirates of the Carribbean, then interact in their space. Move from TV to VOD to Wii to PC, but stay with the content. That loyalty can equate to revenue and allow brand messages to break through the clutter.
And while he sporadically goes to them, the impetus is the gaming, not the exploration. I believe for that reason, Second Life, as it stands today is over-hyped and is more fad than future. Content providers that create multiple platforms for their brands will find more success coming from these online worlds. Watch Hannah Montanah or Pirates of the Carribbean, then interact in their space. Move from TV to VOD to Wii to PC, but stay with the content. That loyalty can equate to revenue and allow brand messages to break through the clutter.
Thursday, March 20, 2008
Can Social Networks Make Money
My previous post looked at the growth of online advertising and the likely places for success. The article in The Economist suggests that sites like My Space and Facebook, while becoming an integral part of the online experience, may not be the place to find revenue.
One of the most interesting quotes from the article believes that "it is entirely conceivable that social networking, like web-mail, will never make oodles of money. That, however, in no way detracts from its enormous utility. Social networking has made explicit the connections between people, so that a thriving ecosystem of small programs can exploit this “social graph” to enable friends to interact via games, greetings, video clips and so on."
The article looks at email as a similar business that has yet to find a strong revenue model. My Space has the power of Murdoch behind it, but no one has been able to build strong synergies. Facebook tried to grow an ad model through Beacon but got chastised by its critics and users for invasion of privacy.
As extensions of core brands, social networks can build loyalty and enhance relationships, but it will be fascinating to watch who can prove that there is a revenue model to profit from.
One of the most interesting quotes from the article believes that "it is entirely conceivable that social networking, like web-mail, will never make oodles of money. That, however, in no way detracts from its enormous utility. Social networking has made explicit the connections between people, so that a thriving ecosystem of small programs can exploit this “social graph” to enable friends to interact via games, greetings, video clips and so on."
The article looks at email as a similar business that has yet to find a strong revenue model. My Space has the power of Murdoch behind it, but no one has been able to build strong synergies. Facebook tried to grow an ad model through Beacon but got chastised by its critics and users for invasion of privacy.
As extensions of core brands, social networks can build loyalty and enhance relationships, but it will be fascinating to watch who can prove that there is a revenue model to profit from.
Online Ad Spending to Rise 23% in 2008
I always wonder when I read about advertising spending whether increases in advertising is a result of overall growth, or if these dollars are simply moving from one pocket to another. Prior to online, I paid attention to the rise in cable advertising vs broadcasting and if one was taking from the other. So this growth projection of 23% is great unless the companies that survive on ad dollars are overall seeing dollars decrease from their other pocket.
The writers strike was about getting their fair share from this source of revenue. It seems most of the dollars are actually coming from search...hooray Google. But there is money from online video as well - "-- Rich media/video ad spend is set to keep growing as a percentage of online ad budgets, rising to 18.5 percent in 2012 from 10.2 percent in 2008."
One thing for sure, online advertising is far more measurable. Specific purchase behavior can be tracked and documented to show the ROI. In this new media world, Big Brother is watching. George Orwell was right.
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