Digital Hollywood Talks About The End Of Banner Ads

I had the pleasure of attending Digital Hollywood's Media Summit this week, featuring a number of fascinating panels and well regarded speakers.  At Wednesday's Media Strategies panel, I listened as Lincoln Millstein, SVP of Hearst Corp, provided great insights, along with the other panelists.  He went further by providing new examples, outside the web universe, to support his thoughts.  In one answer, he contradicted others by saying that cultures in an organization can change and cited two auto examples with Ford and General Motors.

And in another Q&A asking what the future will hold, he saw an end to banner advertising over the next 1 to 2 years.  Millstein said, "Brands, advertisers, agencies are taking back control of creative." The banner ad no longer works and more innovative ad approaches must be taken.    Of course, we know that banner ads won't completely go away, he later remarked, but their value will greatly diminish. 

Of course, what all content and distribution companies want to know is how do I best monetize my content and my platform.  For most, the source of revenue is either subscription or advertising.  Many believe that better data will help to improve the ad experience.  And personalization is key to a better ad experience.  It was also noted that buying information needs to be combined with interest so that ads aren't being pushed for products and services already purchased.  Ads after purchase are simply wasteful, as one panelist noted. 

Roku Delivers New Streaming Device

Roku has announced its next generation streaming stick that turns any HD TV into a connected set.  And at a price point half of its first generation model, at under $50, Roku is competing directly against Google's Chromecast and even the Apple TV box.  "The other major perk over the Chromecast is you get access to all 1,200 of Roku's apps, or "channels" in Roku's parlance. This includes nearly every major service -- such as Netflix, YouTube, HBO Go, Amazon Instant, MLB.TV, Showtime Anytime, and PBS -- as well as a huge number of niche content sources."  Impressive amount of content to make any consumer satisfied.  It should be available to the public next month.

What excites me more about their efforts is their search capability.  "Besides a new look, the app also integrates Roku's excellent cross-platform search, which scours several major content sources (including Netflix, Amazon Instant, HBO Go, and Hulu Plus) to find where a TV show or movie is available and how much it costs."  For those of us wondering where to find a certain show across content providers, this feature is sure to please. 

Roku clearly has raised the bar and what Google and Apple plan to do with their devices will only keep the competition strong.  Plus at such a low price point, Roku may just have the financial edge too.

Native Ads In The Form Of A Selfie

We all worry that we are being duped on web sites when we see content that is not truly editorial, but paid sponsorship from a company.  These native ads though have become more valuable than banners as more people click on them.  Whether they know it is an ad or not, the caption and photo engages us to click.  Some sites do more to tell us which content is paid and which is not; others do not.

So on the Academy Award telecast on Sunday, we were treated to Ellen DeGeneres taking a selfie with a number of stars using her Samsung Galaxy phone.  Product promotion, native ad, it was a scripted piece.  And from what we now understand, a paid for moment.  "The integration of the Samsung Galaxy Note 3 into the show itself offered another example of why marketers have become so fond of programming like the Oscars and the Super Bowl. They are live shows that tens of millions of viewers deem each year as must-watch television, and they provide numerous alternative ways to engage with consumers beyond traditional commercials." All I can say is brilliant marketing!

But there was unintended product placement, too.  "And during the pizza delivery stunt engineered by Ms. DeGeneres, there were two brand logos clearly visible on the boxes delivered to the theater: Big Mama’s & Papa’s Pizzeria and Coca-Cola."  Unfortunately, neither paid for a sponsorship.  And in fact, the soft drink sponsor was their competitor, Pepsi.  Of course, when programming is live, unintended things happen, too.  At least we didn't have any streakers.

Apple TV Set Top Not A Bad Business

With all the focus on on iPads and iPhones, Apple's set top TV box, priced under $100, continues to do well.  Last year, it sold over a billion dollars in revenue of this product and since inception has "sold more than 13 million units of its 'hobby' product, compared with eight million for the competing Roku set-top."  Not bad numbers given that Apple spends significantly more of its time on its other product line. 

The good news is that Apple recognizes that the Apple TV is not the runt of the litter and plans to put more investment and time into this product.  The hope is that a next generation will be announced before the end of the year.  Having that expectation myself, I have held off buying the Apple TV set top; I am eager for that new release to finally purchase one for at least one of our HD sets. 

Of course, I believe more investors and enthusiasts are still more interested in what next new product will emerge.  Will it be a TV set, a product I don't believe they should release, or a wearable device, like the possibility of an iWatch.  I would be more excited to hear that news.  Until hten, congrats on the good news on Apple TV set top boxes; it may not be as sexy as an iPad or iPhone, but it is a welcome device in the home. 

ABC Streaming The Oscars ... With A Catch

At first glance, the news that ABC would be streaming the Oscar telecast on Sunday was good news to cord cutters and non cable households.  But the truth is in the fine print, you must first be an authenticated cable customer.  "In order to access WATCH ABC, you must have a cable subscription through Comcast, Cablevision, Cox Communications, Charter Communications, Midcontinent Communicaitons (sp), Verizion FiOS, Google Fiber or AT&T U-Verse in either New York, Los Angeles, Chicago, Philadelphia, San Francisco, Houston, Raleigh-Durham or Fresno."  Certainly added value for cable customers not able to watch through their cable box.

But what if ABC offered the Oscars to everyone, whether they bought cable or not.  Would they really lose broadcast viewership or would they gain a much larger number of consumers who would like to watch but aren't authenticated.  And if they can monetize the advertising of the video stream, could it be a profitable tactic too.  I'm sure the big worry is to risk losing license fees that they get from their cable operator partners.  Its why they are fighting Aereo. 

And wouldn't each ABC affiliate in each market want to show their own streaming feed to maximize their local ad load too.  By limiting to authenticated viewers only, the ABC Network most likely expects that it won't materially affect its affiliates ratings in each DMA.  But would opening the stream to all web enabled devices be more favorable than problematic.  Or is the concern that it could lead to letting the genie out of the bottle and lead to widespread cord cutting.  Doubtful. 

TiVo Winning Strategy Working With Cable Operators

TiVo seems to have found the winning strategy, partnering with cable operators to get their TiVo boxes into the home.  That resulted in them installing to more than 300,000 customers in their Q4 announcement, and an increase of 34% from the same quarter last year.  TiVo now has more than 4.2 million customers, an impressive number. 

I only wish my own cable operator offered TiVo as a set top choice; instead they are pushing their own Xfinity branded IP set top device.  "TiVo said it’s poised to make more progress with Comcast, which doesn’t lease TiVo boxes but has integrated its VOD service with retail-bought TiVo DVRs in select markets. After putting that plan on pause last year, TiVo said it and Comcast have since resumed that work and expect to complete the  deployment in all Comcast markets by June 30, 2014. Comcast markets in line to support VOD on retail TiVo boxes include Chicago, Atlanta and Houston." 

As TiVo continues to grow its base, the research that it draws from their boxes become more valuable to advertisers and to agencies.  Connecting the dots between household demographics, psychographics, and preferences and watched programs helps to make a more efficient advertising buy.   Its an exciting growth story for TiVo and for the premier DVR device. 

Is Aereo Stealing Or Adding Value To Broadcaster Signals?

According to the major broadcasters, "Aereo is engaging in theft on a massive scale and must be stopped."  They will get their day in court as the Supreme Court has agreed to listen to the case.  But while everyone argues, Aereo continues to grow markets and customers. 

Aereo argues that broadcast signals are being delivered to homes over free, over the air signals.  They are simply renting to consumers an antenna to capture those signals as well as additional services like DVR.  So is it stealing signals or not?  Broadcasters have been able to get cable operators to pay for access to their networks because of previous rules known as must carry and retransmission consent.  Some smaller broadcasters relied on must carry, requiring cable operators to carry their service, at no charge, to assure that their low powered signals gained wider distribution.  Others, charged for their networks.  Univision, a Spanish language broadcaster, successfully transitioned from must carry status to retransmission consent, as their network gained popularity.  For them, it opened a brand new revenue stream.

In these cases, broadcasters provided a signal directly to cable operators' headends, but Aereo has taken a different route.  By renting individual antennas, it has created a work around that seems to stay true to the notion of antenna carriage of broadcast signals.  That they deliver added services to the consumer and charges for rental and service in no way interrupts or interferes with the broadcaster.  And as long as broadcaster continue to use over the air signals, I believe that Aereo will continue to have a successful business.  That said, I believe that Aereo will win the Supreme Court case. 

Net Neutrality Nixed, Netflix Pays Up

Netflix's deal with Comcast to pay for assured access and speed to their broadband lines is only surprising in how quickly this agreement occurred.  It's as if Netflix had expected and prepared for this day and had an agreement in its back pocket read to present to broadband companies like Comcast, Verizon, and others.  "It also comes amid growing signs that congestion deep in the Internet is causing interruptions for customers trying to stream Netflix movies and TV shows."  And it shows that Netflix wanted to put its customers' satisfaction first in accessing its content. 

But such a first deal will now force Netflix to negotiate with each and every broadband provider to assure similar access and streaming speed.  Those additional expenditures will need to be absorbed and the next likely announcement could be an increase in monthly subscription fees to its consumers for Netflix.  Yes, it is trickle down theory at work where the customer, you and I, eventually pay more for the product or service we consume.

Some might point to the need for new net neutrality rules to squash this preferential treatment and once again give all content equal access and speed.  With this Comcast - Netflix deal, the genie is out of the bottle and it is unlikely that new rules will arise.  Good or bad, net neutrality is dead.  But that shouldn't stop innovation and entrepreneur efforts to improve streaming, increase bandwidth, and uncover new technologies to transmit and access content.  Ultimately, the rise of more choice for broadband access will keep prices down, not net neutrality laws.

For now, Netflix will be paying for a spot at the front of the broadband line; Amazon, Hulu, and others may shortly follow.  And consumers will pay as well.  It just might be time for another quantum leap in broadband technology and airwave access.  Net neutrality may be nixed but innovation remains our future. 

Sports Illustrated's 2nd Attempt At A Sports Network

For those that remember, Time, Inc.'s Sports Illustrated business once started a cable network with CNN that they dubbed CNNSI.  This 24 hours sports network tried mightily to compete against ESPN without much success.  It finally closed more than a decade today.  And so now we have the new iteration of a SI sports network.  "Time Inc. will team up with MLB’s digital arm, the NHL, NBA and Nascar to form 120 Sports, a 24-hour sports network that will stream everything but live games to the ever- mobile-connected sports addict."  SI will manage advertising for this venture.  While the plan is initially streaming, "The 120 Sports app will be free but could, down the road, grow to include a premium pay service — as well as other sports."

As a product extension for Sports Illustrated, the idea makes sense.  But the space is already crowded with other sports entities.  Despite the fact that they are partnering with the leagues, they are also competing against each league's own apps.  In addition, 120 Sports faces existing competition from ESPN, Fox Sports, CBS Sports, and NBC who are already heavily invested in the space.  120 Sports success will depend on how they can uniquely approach the content and demonstrate better value for the user.  But baseball fans may be already tied to MLB apps while football fans are tightly connected to NFL apps.  Should 120 Sports find a successful angle, they could possibly break through the clutter.  But it will not be easy.