Web Video Revenue Problem Solved

How do you monetize web videos; well, according to Silicon Alley its product placement. They cite 6 reasons why product placement works including anti-skip, always connected with the video, and measurable. At the same time, Silicon Alley warns in a separate editorial that product placement can prove embarrassing. Not sure I totally agree; none of their examples seemed horrible. What may be worse is missed opportunities. One example would be M&Ms choosing to not be featured in the movie, ET; instead, Reeses Pieces were substituted as the candy that attracts the alien.

For advertisers trying to determine where to place their brand, the key is that the brand name should already be known and its brand message understood. While an unknown brand may be featured, it may be unrealistic to expect that the viewer makes a connection to the brand and its value or preference. Product placement is not the only way to be successful with web video. Hulu's strategy that less is more, is also proving valuable. Less clutter means more likelihood that the message is heard and the message resonates with the viewer. "Fewer ads make the ones on the site more memorable, Hulu executives say, allowing the site to charge higher prices for the ad units."

Newspaper To Stop The Printing Press To Focus on Digital

The Christian Science Monitor, one of the oldest papers, has made the decision to shut down the newspaper presses by next April and focus its coverage with email and web. Circulation of their daily has dropped to 52,000 and deficits are rising. "The Monitor will announce today that come April 2009, it will fold its tab-sized daily and relaunch as a glossy, oversized newsweekly format, while beefing up its Web site with more original reporting and frequent updates. The globally-focused newspaper also plans to create a daily, paid, e-mail edition that will include top Monitor stories, links to other stories and an original editor’s column."
Perhaps the time is ripe to stop all printing and create an e-version copy instead. The advertising dollar is moving online and their readers seem to prefer getting their CS news from the web. Still for a printing company, it is hard to stop printing altogether. At some point, however, Kindle or the Sony Reader or some other digital device is the next step to enjoy a downloaded copy of the news. That is where this trend is heading.

The CS Monitor is not the first to shut down. "Two smaller dailies have made similar moves in the past year. E.W. Scripps kept Kentucky Post alive at KYPost.com after folding the 27,000-circ paper along with sibling paper Cincinnati Post on Dec. 31, 2007. And in April, the 17,000-circ afternoon Capital Times in Madison, Wis., dropped its freestanding daily edition and beefed up its Web site."

Verizon Q3 Strong, Now 7th-Biggest U.S. Cable TV Provider

In just a couple of years, Verizon has grown from a start-up cable operator to the 7th largest MSO in the United States. That is quite a meteoric rise and their quarterly growth indicates that they are looking to overtake 6th place within the next few years. Unlike satellite providers, Verizon offers consumers the first real competitive choice for cable, internet, and phone. Where the cable landscape emulated the wild west only a decade or so ago, acquisition and consolidation has turned cable from a land of many to a land of few. Former cable companies, Adelphia, Century, TCI, Lenfest, and others were once part of that world.

Now, the top 10 list looks like this:
1. Comcast Cable - 24.5 M Basic Video Customers
2. Time Warner Cable - 13.3 M
3. Cox Communications - 5.4 M
4. Charter - 5.2 M
5. Cablevision - 3.1 M
6. Bright House Networks - 2.3M
7. VERIZON - 1.6 M
8. Mediacom - 1.3 M
9. Suddenlink Communications - 1.3M
10. CableOne - .7 M

It is easy to see that the list size drops precipitously and that size matters. Verizon has grown by being the true overbuilder across these other cable companies. AT&T, as the other telco has seen less growth but is currently at .5 M and expects to reach 1.0 M at the end of the year, which would then rank them at the 10th spot, pushing out CableOne.

Cable companies have been seeing growth of basics despite this competition. Is this because the telco companies are taking the low hanging, least desirable customers first, or is it more customers switching from Dish or Direct TV. Either way, as the telcos grow their footprint across the cable landscape, this list may change as a result of downward shifts to the cable company while the telco numbers soar. Perhaps more cable consolidation is in order to survive the telco onslaught...eat or be eaten!

Disney movies on tap at TiVo

Disney is moving aggressively into new media. A couple weeks ago, they announced their deal with Netflix and yesterday they announced a deal with Tivo. "TiVo is set to announce Thursday that hundreds of movie titles, most significantly from Disney, will be available to its broadband subscribers courtesy of deals with CinemaNow and Jaman." It adds another level of value to the Tivo brand. And Disney produces great content and can continue to monetize its library every few years as new parents seek great programming for their new families to watch. Will Snow White, Little Mermaid, Beauty and the Beast and all their other titles ever grow old. I doubt it. It is that rite of passage to share our favorite movies growing up with our own children.

What does change is the method of distribution. Where once the only place to go was the movie theater then The Wonderful World of Disney on Sunday Night TV, we have moved through VHS, dvd, and now download. Disney is successfully driving that trend. These new families are technologically savvy and prefer new media to old. Whether it is download to own or rent, or continue to purchase dvd or cd, the flexibility to deliver the content in whatever form the consumer desires makes it worthwhile. And as long as a digital copy cannot be easily shared and drm is working, Disney can be assured that their content remains valuable for the next generation as well.

Oprah Endorsing Amazon's Kindle

Seems like I'm not the only one that thinks Kindle is the future of reading. Oprah also agrees and is giving Kindle her thumbs up today on her show. If Oprah's Book Club recommendations are any indication of her affect on book sales, her endorsement should spike Kindle sales. "In an email to subscribers, Amazon says its founder Jeff Bezos will be appearing on Oprah to talk to her about her new favourite gadget."

Still, it is a down economy and consumers are cutting back on their spending, even their Holiday spending plans will be reduced. For Kindle to succeed, it simply needs to demonstrate how quickly the consumer will save money with Kindle versus paper. Focus marketing on cost savings and you will ultimately drive sales. Throw in the trees saved and you hit a double. Add Oprah's endorsement and it appears to be a walk off grand slam!

Network Audience Keeps Eroding

Broadcast viewership is down. And even when you count delayed viewing via DVR, the total number is still down. Less people are watching network TV. So what does it mean and is it problematic. Perhaps not.

It does not infer that people are turning off their TV sets to, god forbid, read a book. (I'm kidding) But there may be a number of reasons why broadcast viewing is down.

1. Cable networks - more choices and not just reruns. Original series are airing on cable and getting Emmys. TBS is airing baseball playoffs. ESPN has Monday Night Football. And cable content has been regarded as a higher quality to its broadcast counterpart.

2. Writers strike - when shows premiering this year are reworkings of old shows (aka Knight Rider), its hard to say that quality shows are coming to broadcast television. The quantity of new shows this year is way down and cable offers more fresh alternatives.

3. Internet viewing - the numbers are still small compared to total TV viewing and most content is still short form. Most people may argue that internet viewing is additive and does not replace TV viewing.

4. DVDs - still popular and Netflix continues to offer a compelling service. DVD sales may be down but its number is still impactful.

5. VOD - still small but not necessarily being included in the DVR figure. Still it is a growing alternative to broadcast TV.

Once there were only a few broadcast networks and cable was repeat and unwatchable shows. But that was then. Today, the broadcast networks also own cable networks so they have more ways to reach the viewers. Broadcast viewing may be down, but I bet TV viewing, whether live, delayed, or on-demand, remains healthy and strong.

Netflix sees half million Blu-ray subscribers

Netflix continues to embrace the technological shift. Not only are they deploying a download strategy, they are embracing the Hi Def world as well. And while the numbers are small, they believe that 500k of their base, or a little over half a percent, will pay a premium for HD movies on Blu-ray. Will an incremental dollar per month be felt by the Netflix customer? Or will their customer feel that this extra charge is unfair. "Netflix said the additional charge, to reflect the higher cost of Blu-ray discs, will be added to billing statements on or after November 5 and only to members who have previously enabled Blu-ray shipping on their Netflix accounts." Over the year, the added revenue impact could exceed $6 million dollars annually!

As the cost of Blu-ray players decrease, so too will the cost of discs. How long will this premium last? And will their best customers feel slighted by this added cost. Or will this increase be barely felt by this niche audience. For Netflix, the timing may be right.

Actors Union Board Holds Off On Strike Authorization; Requests Mediation

SAG holds off on strike authorization...REALLY. With the economy in a downward spiral, networks like NBC cutting back on their costs, CBS/Viacom's owner Sumner Redstone, in need of capital to stay afloat, and new media barely making a dent into traditional platforms, you can't decide what to do about a strike. REALLY. You are going back to negotiators requesting mediation and continue to threaten to take a strike vote if you can't find agreement. REALLY. " The studios maintain that SAG members shouldn’t expect anything beyond what the other four major unions signed on to this year. AMPTP also pointed out that each of those deals were made in 'better economic times.' " So SAG still is considering a strike. REALLY...Really?...REALLY!

NBC Shows Content Usage Across Platforms

Using TAMI, or the Total Audience Measure Index, to count usage across platforms, NBC affirms that TV maintains a clear superiority in usage. It makes you scratch your head why the Writers Guild and SAG have fought so forcefully for its share, when its share is still a blimp. Makes you wonder why there was a strike last year at all. They truly were fighting over pennies. It demonstrates that a short term agreement would not have hurt their long term viability.

And while the information is valuable to ad monetization, it may not paint a completely true picture. Still, it is a terrific means to compare the platforms and get an aggregate understanding of how content performs. I also think that DVR usage should be measured and can only assume that it is being included inside Television. But is the information accurate and does it measure real usage. It is argued that it does not represent engagement-based measurement and that across platforms, usage measurement is not apples to apples.

But, it is a first step and represents a small leap in recognizing that content, no matter where it is viewed, has an impact on ad monetization. NewTeeVee makes an interesting point, "... because the data isn’t engagement-based focusing on total minutes, either for television or the streaming data, it’s mostly useless, but for including the download numbers we thank NBC profusely! The bottom line is, TV is still king, though streaming is growing. But, unless and until they provide minutes of streaming, it will be difficult to get a true idea of what portion of viewing of shows happens via sanctioned streaming channels." It does say that content is being viewed in many ways, across mobile, VOD, streaming, and download. Viewing patterns are changing and good content gets consumed many times over.