Is It An Ad Or Editorial Or Both?

These days as we troll the web and glean content from our favorite sites, we are being exposed to ads in every form, from banner ads to pre-rolls, vying for our attention and our click.  But many users may not realize that some of those articles or highlights we click on may not be editorial but rather a paid advertisement.  Some might still call it an advertorial, but for many in the digital world it is known as native advertising.  "How to define native advertising exactly is still up for debate, and it can be defined quite broadly — as in: any advertising that integrates fully into the content within which it is placed."  And its goal is to blend advertising seamlessly among the content that we consume.

The results of using native advertising indicates that it does a better job of driving clicks than traditional banner advertising.  "Native advertising is being heralded as the savior of digital publishing, but as marketers' content treads increasingly on editorial ground, one of the big questions is: How should it be regulated?"  Or should it be regulated at all?  As users of the web, does the long time notion of "buyer beware" still hold true or should websites do a better job of clearly identifying sponsored content from independent editorial.

Some native advertising is not specifically about driving a brand message; rather, it is used to drive viewership to other sites that may provide additional content discovery and valuable editorial content.  Other native ads may drive to transition pages, only to be exposed to more native content before a second click to the intended web site and content.  And other native ads click to a website of pure advertorial content.  It costs the user a click or two, it drives analytics, but is it harmful?  I might contend that it also leads to a smarter web surfer; click me once shame on you, click me twice, shame on me.

The blending of editorial and advertising is not a new phenomenon.  Both print and video sites have been selling advertorial sections for as long as advertising has been around.  What may feel unusual on the digital platform is that the signs indicating that it is native advertising is either not expressively stated or hidden on the page.  According to "Ogden Publications CEO Bryan Welch. 'There will be no need to identify it,' he said. “I see everything blending.”  And that of course leads to my original thought, that the user or buyer beware.

Newspapers Continue To Show Red Ink

According to Gannett, the newspaper industry will lose 1 billion dollars in revenue this year.  Gannett, owner of USA Today and other newspapers also says that the rise of digital advertising is not enough to offset the losses of the print business.  But this loss wouldn't mark the first year of billion dollar losses.  "Data from the Newspaper Association of America shows that print advertising in the newspaper industry has been decreasing for about seven consecutive years, losing $1.8 billion in 2012."  So while the total loss in 2013 is less than the prior year, it is still a major hit. 

Gannett attributes some of those losses to it being a non-Olympic year, as well as to a slow economy.  The article fails to elaborate on what the effect of digital advertising is having and how fast that side is growing.  One would expect that the two revenue lines will eventually cross and it would be interesting to see the rising slope of digital to print and the steepness of the tend.  The print world will only continue to fall as tablets become an ever increasing part of our world.  New releases by Apple of its iPad line, new Microsoft and Nokia tablets, and of course Amazon's Kindle all rely on digital content and print content distributors need to better strategize their business model to build new subscription and advertising models that best offset these print losses.

Yahoo Knows That Content Is King - Hires Couric And Pogue

First came the announcement that David Pogue is leaving The New York Times to start a new chapter at Yahoo.  Now comes news that Katie Couric is coming on board as well.  "Sources said that Couric is now close to completing a deal to put a Web interview show right on Yahoo’s home page."  As CEO Marissa Meyers continues to put her stamp on Yahoo, it has become clear that she too regards content as king.  Original, exclusive content that drives viewership and grows ad revenue.

That established old media stars like Katie Couric (broadcast television) and David Pogue (newspapers) are moving to digital platforms follows a path of using branded content to attract users to new platforms.  Last month, Walt Mossberg announced that he too was leaving the printed world of The Wall Street Journal to start his own website.  Perhaps Meyers can convince Mossberg that his talents can best be merchandized with the backing of the Yahoo brand.

Using content to drive adoption and usage is an important strategy that demonstrates just how important content is to a platform's success.  It is not just that you build a site but that you house it with meaningful content that consumers will seek out.  And branded, well known, credible content is far easier to market than unknown, untested content.  Certainly, both can survive and prosper, but branded, established content potentially comes with a built in base of consumers that will follow the path to a new platform.  And that is certainly what Yahoo expects to happen.

David Pogue Leaves New York Times

After 13 years writing a column for the New York Times, David Pogue has accepted a position at Yahoo, writing articles and creating videos for the web.  A big loss for print, a big gain for Yahoo. 

From his blog, "Leaving The Times is a big deal. My years there coincided with the explosion of just about everything important in today’s tech — the Web, social media, e-books, smartphones, tablets, duck-faced selfies. It’s been an amazing ride...." 

Will Broadcasters Drop Their Over The Air Signals?

As Aereo disrupts the broadcast platform, it poses a potential threat to long term retransmission fees.  The more Aereo wins court cases, the more cities it populate, and the bigger the threat to the revenue model.  If Aereo can retransmit broadcast signals for free, why can't cable operators.  And that possibility concerns broadcasters. 

In the past, Fox Network threatened to move from broadcaster to cable programmer, and now we learn that ABC Network considered it as well.  "A cable network doesn’t broadcast its signal over the air like broadcast networks, preventing Aereo from taking the signal and re-transmitting it online to paid subscribers, as it is doing with the broadcast networks in certain markets."  Of course we have also heard other rumors that ABC/Disney parent would consider selling all their owned and operated affiliates as another possibility.  Clearly, Aereo's disruptive approach has gotten the broadcasters to reexamine their current revenue models.  Aereo's approach could also quickly deflate the valuation price of any affiliate sale, unless all affiliated stations converted from broadcast to cable. 

And while Aereo may be successful in building antenna farms, I am not convinced that cable operators would bypass license fees through a similar approach.  The cost of building and maintaining verse negotiating for more streaming access to broadcaster linear and on demand programs would justify maintaining the status quo of license fees for cable operators to continue to pay.  Plus, cable operators have more flexibility in building out its broadband and wireless platforms for authenticated customers with discounts for those that subscribe to cable.  Such a radical approach like converting broadcast to cable is like killing a mouse with an elephant gun; there are simpler solutions.

Aereo Launching In Its Next Market

Tuesday, October 22, 2013, Detroit DMA consumers will be able to cut their cable cord and still gain access to broadcast and some cable networks in their market without an antenna.  A broadband feed is all that is required to sign up and get Aereo delivered into your home.  And despite numerous attempts by the broadcasters to block Aereo, the courts have yet to agree and have allowed the business to rollout into additional markets.  According to reports, "Aereo says it expects to be in 22 cities this year."  The more success that Aereo has, the harder it may be to put the genie back into the bottle. 

Rather than fight Aereo, broadcasters should spend more of their effort working with their cable/telco/satellite operators to enable their signals to be authenticated for TV Everywhere.  Give consumers the value of getting their broadcast channels, not only on the TV set, but also on their mobile devices.  Increase the value by offering more on demand programs online along with the linear feed.  Consumers may just prefer maintaining their cable subscription for this added level of value.  And that minimizes the losses that Aereo might present in each market.

ABC Networks' O&O For Sale?

According to reports, Disney/ABC may be considering a sales of its eight owned and operated affiliated broadcast networks.  Although denied by the network, the timing might be right to separate the distribution side of the business from the content side.  And there may be a significant ROI, too.  "Disney CEO Bob Iger is interested in what the broadcast business could fetch now that station valuations are much higher than when the company last explored a sale in 2010." 

Of course, it was CapCities, the owners of broadcast networks that originally bought ABC, the content side.  That was prior to Disney buying the merged company.  Now with talk of unlocking shareholder value by concentrating on one side or the other, ABC/Disney may prefer to work in the world of content over distribution. They certainly aren't the first to make such a move.  Time Warner made the same decision when it spun out the Time Warner Cable business.  

Such a sale would certainly free ABC/Disney to construct interesting distribution partnership deals without having its internal businesses in a perpetual state of conflict.  It would enable more freedom to push a TV Everywhere approach for both linear and on demand streaming of all of its shows.  Still it would be hard to part with all the dollars flowing into the company from rising retransmission fees.  "RBC Capital analyst David Bank said rising retrans dollars are one reason Disney may be loath to part with the stations right now despite soaring valuations."  But if your strategists are telling you that the threat of companies like Aereo could disrupt the retrans model and future fees, it may be smart to gamble on other ventures, take your profits and concentrate on content focused ventures that better support the goals of the Disney/ABC brands. 

Certainly the rumors of a possible sale are flowing.  They will never be confirmed until the deal is consummated. Still, the timing and the opportunity to focus on content never felt more right.  To me, such a sale makes sense. 

Time Warner Cable To Bring Back Ovation Network

Despite dropping the Ovation Network the beginning of the year under the guise of controlling costs by dropping low rated channels, Time Warner Cable plans to relaunch the network the beginning of next year.  The rationale given, an increase in original arts programming on the network.  A wonderful benefit to present to the subscriber.  I am a fan of the arts and a fan of Ovation so my comments are not about the value that the network provides, especially as art programming is underrepresented on linear television.  It is simply that the original reason Time Warner Cable dropped the channel was to cut costs for little viewed programming. 

I doubt that the investment that Ovation is making in original programming will substantially change the ratings of the channel.  Other arts networks, like A&E and Bravo, ultimately moved away from high art programming for more "pop culture" shows to attract a broader audience.  I suspect that the deal was also predicated on a lower license fee cost and "marketing investment" back to Time Warner Cable.  Fine in the short run, but not consistent with its earlier "public push by the cable operator to cull its lineup of poorly rated channels. CEO Glenn Britt made much of that plan, aimed at controlling rising programming costs."  So if you start adding channels and costs, has your strategy changed?

Ultimately, low rated channels likely also have the lowest license fee costs to the operator; they would have little or no effect on the subscriber fees that are passed through to consumers.  Those higher fees tend to be tied to the highest rated cable networks and especially regional and national sports networks.  According to the article, "A Time Warner Cable spokeswoman said that the company continues to look at 'three primary factors: cost, viewership and unique content' when it comes to assessing the value of a channel."  SO will TWC start to drop other low rated channels.  It remains to be seen if we ever hear that cable operators are actually lowering their monthly subscription fees to consumers as a result of cutting costs.  Frankly, I doubt it.  And as cable costs rise, consumers will seek to shed those fees for streaming video alternatives.  And it is in the OTT platform that networks like Ovation could have the chance to shine and breakout. 

Are You Ready For More Football?

I love football.  I love the strategy, the athletics, the march down the field toward the endzone.  And there is nothing more enjoyable then a Sunday afternoon on the couch watching the game(s).  But truth be told, too much of a good thing can be too much.  So I find Sunday Night and Monday Night Football to test my enjoyable, unless of course it is my team.  And still, it is difficult to stay up to the bitter end. 

So when I read that the NFL is considering adding a second football game to the Thursday schedule, my heart sinks.  "The NFL's belief is that adding another Thursday game would generate more national interest, plus it would give the league a chance to sell rights to another round of games."  It may also be that not enough people are watching the NFL Network while in-market teams get the simulcast on a broadcast channel.  Truth is that the search for more money is what will likely find a cable network bidding for a second Thursday game.  But I believe it is also killing future fan interest in the game that I love.  Too much of a good thing can indeed be too much.

In an earlier blog, I wrote about the DirecTv agreement expiring next year and who might want to buy those rights.  I suggested that an OTT platform like Apple TV or Netflix or Amazon could afford the investment and attract additional subscribers to their base.  That kind of viewership deal makes sense, a second Thursday night game does not.  It pushes one more game off the Sunday afternoon line-up.  And as a fan, reduces the impact of watching results of games across the day.  It simply extends the game week too far.  My vote, let's limit football to Sunday and Monday.  Enough is enough.