Papers Facing Worst Year for Ad Revenue

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

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

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

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

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

Apple: 5 billion songs sold by iTunes

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

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

Huffington Post starts local news push

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

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

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

TV networks brace for potential actors strike

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

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

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

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

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

Microsoft Bets on Interactive Ads

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

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

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

Remote Clicks That Do More Than Just Change Channels

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

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

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

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

Hollywood In ‘De Facto’ Strike: AMPTP

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

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

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

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

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

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

YouTube Hasn't Figured Out How to Make Money

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

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

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