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."
Friday, June 6, 2008
Thursday, June 5, 2008
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.
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.
Wednesday, June 4, 2008
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.
Tuesday, June 3, 2008
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.
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.
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.
Monday, June 2, 2008
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.
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.
Friday, May 30, 2008
John Dvorak's Second Opinion: Why Disney should buy TiVo
From Market Watch:
"...But TiVo has become a verb and holds all the best patents on this sort of technology -- and it is addictive.
More importantly it can be effortlessly turned into a conduit for the next generation of TV -- IPTV. This is television delivered via an IP connection either over the Internet or over a private closed IP network.
Everyone knows that eventually IPTV will become the dominant form of TV show distribution. Just as news distribution is being converted online because you save money on paper, ink, printing presses and delivery trucks, a similar change will take place in broadcast media.
With online broadcasting you don't need expensive transmitters, antennas, licensed personnel and government licenses to operate. IPTV makes things cheaper.
That said, the form that IPTV will eventually take is not certain. The Web made the online newspaper popular since the web was a perfect platform for print-style content. This is not the same for video content.
Video content on the web is a novelty, a diversion. There has to be some link to the TV set in the den for the IPTV initiative to ever take off. This means some sort of set top box or a direct connection between the TV and the Internet.
TiVo is sitting in the sweet spot. And when I see a company like Disney playing around with a company like TiVo I begin to wonder if Disney is getting its feet wet in advance of a buyout deal. With a market cap just under a billion it might be too much to swallow, but it would give Disney a technology it could use and leverage.
While some observers in the movie business see Disney as moving away from the content creation business insofar as movies are concerned, it seems to be solidly into TV content which is perfect for TiVo. And it does have movies that need distribution.
Besides giving the company more control over content by controlling such a device it might find it a good vehicle for delivering targeted advertising to the viewers. This has been the holy grail of broadcast advertising. The possibilities are endless if you can control a box like this and make it even more popular.... "
Tivo has superior controls and easily links to cable and online content. It intuitively saves programming of interest and may be able to truly target it saudience with ad messages they want to see. A Disney Tivo partnership seems to have a lot of great potential.
"...But TiVo has become a verb and holds all the best patents on this sort of technology -- and it is addictive.
More importantly it can be effortlessly turned into a conduit for the next generation of TV -- IPTV. This is television delivered via an IP connection either over the Internet or over a private closed IP network.
Everyone knows that eventually IPTV will become the dominant form of TV show distribution. Just as news distribution is being converted online because you save money on paper, ink, printing presses and delivery trucks, a similar change will take place in broadcast media.
With online broadcasting you don't need expensive transmitters, antennas, licensed personnel and government licenses to operate. IPTV makes things cheaper.
That said, the form that IPTV will eventually take is not certain. The Web made the online newspaper popular since the web was a perfect platform for print-style content. This is not the same for video content.
Video content on the web is a novelty, a diversion. There has to be some link to the TV set in the den for the IPTV initiative to ever take off. This means some sort of set top box or a direct connection between the TV and the Internet.
TiVo is sitting in the sweet spot. And when I see a company like Disney playing around with a company like TiVo I begin to wonder if Disney is getting its feet wet in advance of a buyout deal. With a market cap just under a billion it might be too much to swallow, but it would give Disney a technology it could use and leverage.
While some observers in the movie business see Disney as moving away from the content creation business insofar as movies are concerned, it seems to be solidly into TV content which is perfect for TiVo. And it does have movies that need distribution.
Besides giving the company more control over content by controlling such a device it might find it a good vehicle for delivering targeted advertising to the viewers. This has been the holy grail of broadcast advertising. The possibilities are endless if you can control a box like this and make it even more popular.... "
Tivo has superior controls and easily links to cable and online content. It intuitively saves programming of interest and may be able to truly target it saudience with ad messages they want to see. A Disney Tivo partnership seems to have a lot of great potential.
Thursday, May 29, 2008
Barnes & Noble launches mobile site
While it is important for Barnes & Noble to enter the mobile space, I'm not sure that they are solving a need by offering users more mobility to search for items online, place and track orders, locate Barnes & Noble stores and check stores for an item's availability. I was hoping to read that they were going to develop a competitive device to Amazon's Kindle that enabled consumers to both purchase hardbound and digital versions of books and magazines.
On my wish list would be to see Apple develop the competitive hardware and work jointly with B&N on software and downloads to gain another foothold in this digital space.
Lastly, there is no reason for B&N to purchase Borders, a competitive brick and mortar book store. I fear that most locations simply overlap and that they gain no additional synergies. The future is digital, not land.
On my wish list would be to see Apple develop the competitive hardware and work jointly with B&N on software and downloads to gain another foothold in this digital space.
Lastly, there is no reason for B&N to purchase Borders, a competitive brick and mortar book store. I fear that most locations simply overlap and that they gain no additional synergies. The future is digital, not land.
Wednesday, May 28, 2008
Nets Should Embrace VOD
VOD vs DVR. It seems that in this changing entertainment landscape, consumer control is gaining traction. For networks to survive and expand their revenue base, it is obvious that they need to push VOD applications. With DVR, the consumer will fast forward commercials and cost nets money. But VOD needs to do more than disable fast forward and other trick features that eliminate the ad message. It needs to become the preferred choice of consumers. Make it easier to find, search, and play. Allow it to be more interactive and customizable so that the content remains relevent for the user. Don't assume that they want to see the ads; they don't. So the ads have to be either much more entertaining and feel less intrusive. Avoid clutter and create unique features that DVRs can't copy. Find the win-win and consumer will stop pre-recording and start reaching for their VOD button!
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