Why Ad Rates Are Plummeting And What It Means For Publishers

In economics, we call it supply and demand. Add the price elasticity component and well, that is explaining the state of ad networks and new media today. This article clearly explains the path we are headed. As content publishers look at monetization tools, from ad revenue to subscription, how they earn their revenue is being affected by glut and cheaper alternatives. For advertising, their CPM is being hurt when ad networks are discounting their own ads in the remnant, or secondary market. Why buy an ad directly, if it can be bought for less by an ad network. "Agencies and advertisers can't resist the discount and begin to buy their way onto premium sites through ad networks only. This drives down the amount of inventory publishers can sell on their own and increases their reliance on ad networks. The vicious cycle continues."

And does specific content matter. For agencies using demographics to reach a particular audience segment, does it matter whether they are reading a premium site or "stocks r us". Same audience and reach at a lower cost with more frequency. "Why pay a $25 CPM to reach that wealthy, 50-year-old, Boston-area living, Mercedes Benz-owner on NYTimes.com when you can pay a $.60 CPM to reach the same guy five minutes later when he's reading a five-year-old article on stockjocksofwallstreettheblog.com's archives?" This economic model ultimately leads to more price wars and lower pricing.

And so, content publishers will need to offset this loss of revenue by restricting ad networks from re-selling their content, marketing the value of the content and the brand, and perhaps even charging a subscription fee for access. At the same time, the internet continues to increase the amount of accessible content; how it is controlled and managed within web sites will bring more control back into the advertising model.

Actor's Strike Unlikely

I guess SAG had to wait till after their awards show to make changes. No use stirring the pot before the big televised event. And so they waited till the day after to fire their national executive director and chief negotiator, Doug Allen. At the same time, SAG will be joining forces with the other actor's union, AFTRA, to renegotiate their advertising agreements.

"The negotiating committee for the union, which has been working without a contract with the Alliance of Motion Picture and Television Producers since last June, will now shrink to a 10-member task force, according to the Associated Press." I have a better idea, accept the AFTRA agreement with AMPTP and move forward. It's time to move forward, not waste more time or money, when a legitimate deal with actors has been already struck.

Senate Agrees To Move DTV Transition Date

The senate bill proposes to move the digital transition date from next month, February 17, out five months to June 12. This bill must now be worked out with a House bill. Tick tock the clock is ticking. The public isn't ready for digital; I say this bill gets worked out and the transition is delayed.

Syndication Is Not Dead

Despite the dire predictions, the word on the street is that syndication of TV programming is not dead...yet. "As another NATPE gets under way in Las Vegas, amid the perennial reports of low attendance and sparse sales, here’s something worth remembering: Syndication isn’t dead." That is the word being spread around. "More important, both 'Wheel' and 'Oprah' generate millions upon millions of dollars in profit for the companies involved in their production and distribution. Same goes for anyone fortunate enough to have a piece of 'Entertainment Tonight' or 'Who Wants to be a Millionaire?' or 'Tyler Perry’s House of Payne.'”

But as alternative distribution models grow, both online and mobile, will that hurt the current syndication model or can it actually be an opportunity for more revenue? As local broadcasting is faced with declining revenue, can they afford syndicated product? WIll they need to rely on originally produced local content to differentiate themselves not only from other local broadcasters but also from the web and sites like Hulu. The article may be worrying about the next generation of syndication personalities, but they should also worry about changing distribution platforms, too.

Deloitte Issues 2009 Media Predictions

A new year and a new President, technology and entertainment layoffs abound, so what are the headlines and future for 2009. Deloitte has issued their predictions for the technology, media, and telecommunications industries.

Digital storage cost for user generated video - can this content be adequately monetized or will the power swing back to mainstream media who can create and distribute professionally produced video. Per World Screen.com, "'Advertisers are generally reluctant to place ads next to any content that could damage a client's brand.' As such, sites may need to start charging people to upload or share content." Given the costs will a revenue stream ever be found.

Mobile content - will the consumer accept mobile advertising and in what form. Pre-rolls on video content, text messages, coupon offers, etc. "With global advertising experiencing double-digit decreases and the coming year promising an even tougher economy, mobile advertising's time may have come. More able than ever before to carry advertising, mobile phones are at their most ubiquitous -- and there is a more mature understanding of what mobile can and cannot deliver in advertising." A key challenge, but mobile can present more opportunities as well.

3D content - a clear rise of theatrical titles in 3D to keep audiences from staying in their home and watching films on their big HD screens. It's all about differentiating the theatrical experience from the home. And I'm sure in a few years, homes will soon possess 3D as well, but for now more content is being created and theaters are being modified to offer the experience. For an added fee! Many titles to look forward to including Monsters vs Aliens, Toy Story 3D, and even the next Harry potter film.

Late Night With Jimmy Fallon Webisode

Very proud because it features my wife!

Actor's Union To Give Up Strike Vote

SAG's leadership has finally realized that they did not have the support of its members to push for a strike and have taken the threat off the table. Instead, they intend to send to their constituents the contract offer from AMPTP and allow them the chance to vote. "The declaration represents an about-face and follows months of preparations for a strike vote that would have given the guild the power to shut down production of major studio movies and prime-time TV shows. The last contract expired in June."

So there are now two possible outcomes; a vote to accept the contract would allow all unions to focus their attention on creating good content. BUT...what happens if the membership reject the contract offer. What then. New leadership for SAG. Does strike talk re-emerge. Or do they merge their union with AFTRA and follow its contract. Will it means that SAG has lost its way and should fade off into the sunset. Ahhh, a classic Hollywood ending. Still, until this next vote is taken, SAG's future is unclear. In these bad economic times, unions are losing their advantage and belt tightening is needed on both sides of the table.

Inaugural ratings likely second best

According to preliminary Nielsen numbers, the inauguration of Ronald Reagan 28 years ago was seen by a larger percentage of US households than this week's Barack Obama inauguration. But are we really comparing apples to apples. "Preliminary Nielsen estimates show that 29.2% of U.S. households were watching the presidential inauguration -- easily the largest in decades but below the 37.4 household rating for Reagan. Obama's figures include viewership on roughly 15 broadcast and cable networks, while the Reagan ceremony was viewed only on ABC, CBS and NBC; also, they do not include the huge online viewing this time around, with CNN.com, FoxNews.com and MSNBC.com all reporting record streaming video traffic." And what about sites like Hulu that also carried the stream. While I am confident that number of online viewers is minimal relative to the other outlets, the aggregate of video coverage should be counted in order to make a fair comparison between 1981 and 2009's inauguration.

But I am surprised that the Obama inauguration figures were not higher. Still it ranked higher than most others. With so many places to watch this historical day, it will be interesting to see what the final numbers indicate.

Google Ends Sale of Ads in Papers After 2 Years

Print advertising must be dying if Google can't sell its ads. And while old media is clearly not Google's expertise, you would think that they would be able to build a connection between digital and print and use that synergy to augment the sales process. But unfortunately, the experiment was a bust. “'While we hoped that Print Ads would create a new revenue stream for newspapers and produce more relevant advertising for consumers, the product has not created the impact that we — or our partners — wanted,' wrote Spencer Spinnell, director of Google Print Ads, on an official corporate blog."

For Google, it means stick with what you do best; for print, it may simply spell disaster.