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December 30, 2005
TNT Ends 2005 on Top as Most-Watched Ad Supported Cable Channel
From Mediaweek via MediaDailyNews:
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Not only did TNT conclude the year as the most-watched ad supported cable channel, the network also has the most viewers in the 18 to 49 demographic (1.17 million) and the 25 to 54 demographic (1.24 million) for the fourth year in a row. USA Network placed second, and FX's Nip/Tuck was the most watched show among 18- to 49-year-olds, according to Nielsen Media Research.
December 28, 2005
Invasion of the Podcasters. Trickle might be more descriptive.
Every once in a while I think that listening to podcasts is what I might try next. Then, after contemplating it for about 3 more seconds, I always change my mind. Apparently, I remain in the majority.
According to a new study by podcast advertising company Podtrac and research firm Taylor Nelson Sofres, the media is a largely male pursuit. The study, based on an online survey of 1,000 Web users in December, found that 78 percent of those who have ever heard a podcast are men.
Podtrac also found that, overall, the number of podcast devotees remains low. Just 32 percent of respondents were familiar with the word "podcasting," and just 32 percent of that group had ever listened to one. That equates to about 9%.
CBS to Stream TV Shows on Yahoo!
CBS is looking online to attract new viewers for its popular comedies "Two and a Half Men" and "How I Met Your Mother."
The network will make two complete episodes of each of the Monday night sitcoms available for one week in a deal with Yahoo! The promotion is called the "CBS Comedy Bowl," alluding to the plethora of college football bowl games that take place this time of year.
TiVo: 'Buy our DVR to skip ads and we will sell different ads to you'
How many times have we heard someone use TiVo as a verb – as in ‘I’ll tivo that and watch it later.’ Like Google, TiVo has built a brand name that is recognized well beyond its actual customer base. Four years ago, it looked like TiVo would become a dominant consumer platform.
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But what is happening is they're getting a smaller and smaller piece of a growing DVR marketplace.
NBC cable exec Tom Rogers made the jump to CEO in July, taking over for co-founder Michael Ramsay, an engineer more attuned to the tech business than the entertainment world. Since then, Rogers has injected the company with a media-orientation.
It would appear that Tom Rogers is focused on being more than just a tech company. Like the media-savvy management team at Yahoo!, he wants TiVo to also be a media company. And a big part of that strategy is to become more attractive to advertisers. TiVo will need as many advertising partnerships as possible in order to scale the business and make real money off it. This is ironic since they are also responsible for creating the very box that helps viewers skip traditional commercials on television.
But I did not write this post to take any pot shots at them. Quite the contrary, I understand the compelling business reasons for them to do this. The odds are stacked against them and I think I see them misfiring on some tactical executions that will be necessary. But I wish them good fortune in their attempt.
December 22, 2005
GoogAOL wants to sell TV and Print ads, too
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I've refrained from blogging about the rumors and eventual news of the Google and AOL deal. I am much more interested in what they will actually do together and judge whether it might lead to opportunities. Well, we are just starting to get some hints about that.
Apparently, the partnership is more than just an online advertising play. As part of the deal, both companies plan to explore the sales of so-called offline media like TV and print.
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"With this agreement, AOL's sales force will now be able to sell all types of online advertising ... and we'll explore expanding the partnership into selling television and print advertising," Time Warner Chairman-CEO Richard Parsons wrote in a staff memo, which surfaced Wednesday in a report by the Financial Times.
I am very interested in the television ad sales because I used to sell enterprise software into that market and Time Warner was one of my largest customers. It is also more lucrative than Google's search marketing niche.
Print advertising is a topic I am less familiar with, but Time Warner does have a vast magazine infrastructure from which to draw. Judging by Google's first test in print advertising, they will sorely need that expertise.
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For follow up on Google's first misstep, read 'Google is not invincible. There, I said it and I am still standing.' |
MediaDailyNews notes that a "big new Google advertiser, coincidentally, may be AOL. As part of the deal, Google is giving AOL an estimated $300 million in "marketing credits" to promote its content on Google, which at least one knowledgeable observer believes may be used for more than just paid search placements on Google's sites."
Surely, there are many chapters yet to write about this story.
Big Apple Feeds TV
Hat tip to Craig Sender for pointing out an article in Broadcasting and Cable. It helps point out that the idea of television is changing. I wonder if some of the cell phone viewers will also be in Times Square?
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For the first time, feeds will be available to mobile phone companies and IPTV carriers. The feeds are nonexclusive but meant only for TV programming related to the festivities.
December 21, 2005
Connecting Dots ... Verizon, Seachange, Motorola
Verizon, confirmed that it is using SeaChange International's IP Video System to enable VOD on its FiOS TV service. The solution automates FiOS TV's VOD service from content ingest to set-top applications; in the Verizon deployment it is working in tandem with Motorola set-tops. It is also capable of supporting interactive advertising, games-on-demand, and other new applications.
SeaChange infrastructure and Motorola set top boxes are a popular combination for the cable companies, too. So, it would appear that Verizon has reduced the number of variables in its deployment as much as it could and that implies that their IPTV service is well grounded harware-wise.
FiOS TV, which is delivered over a fiber-to-the-premises network, is currently available in parts of the Dallas-Fort Worth area; in Herndon, Virginia; and in Temple Terrace, Florida.
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See also: SeaChange has equipment upgrades that will be available in early 2006 |
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See also: Motorola is a popular choice for Hi-Def, DVR's and should benefit from Comcast cap ex in 2006 |
The Advertising Model Is Dying
L.A. Times (free registration required)
Los Angeles Times columnist Joel Stein has put his comic touch to the topic of advertising, which he posits is no longer a viable enterprise. - Read the whole story...
When DVRs make it possible to skip TV commercials altogether, what's the point of advertising on the medium? The networks, Stein notes, are busy making deals to deliver ad-free programming to various portable video devices.
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At this rate, we'll soon have to directly pay the real cost for most of our high-quality media. And this is when the revolution starts. Take away welfare, send their kids to war in Iraq — poor people will deal with it. But now that they've taken away Stern's "lesbian-dial-a-date," there could be rioting in the streets.
CBS.com Channels the Dead
It looks like CBS is continuing its exploration of how to test new distribution of its digital media assets. The following story is from Rebecca Stropoli at Broadcasting and Cable.
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James Van Praagh is talking to dead people once again during a live one-hour séance via streaming video on CBS.com on Wednesday, Dec. 21. Beginning at 3 p.m. ET, the public will be able to contact Van Praagh, the co-executive producer of the popular CBS drama Ghost Whisperer, either by phone or through a designated chat room.
Viewers will also be able to download the séance as a podcast, and it will be archived on CBS.com. This “Ghost Whisperer Séance” is Van Praagh’s second via CBS.com; his “Ghost Whisperer Halloween Séance” streamed on Oct. 27.
December 20, 2005
Give me your Time or give me your Money
Ultramercial says they have a patent on a business model for VOD advertising. In an email, they said "it allows the viewer to make the choice: watch an ad that 'earns' them each segment of their program - OR - pay-per-view. The viewer chooses between an explicit exchange of value: their time for the content - OR - their money."
In the accompanying graphic, you can see how they expect a viewer of broadband TV shows to navigate to the show they want to watch.
Paul Grusche of Untramercial claims that the Ultramercial approach is "being considered by two major networks to bring their shows online."
Time Magazine Considers Ad Gateway to Subscription Content
Using technology from Ultramercial, Time.com gives access to its "Person of the Year" cover story, along with full archive of articles.
In his own words ...
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Jeff Marshall, SVP and managing director of Starcom IP, commenting on the possible Google/AOL partnership.
Klipmart Rolls Out In-Stream Product
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Klipmart unvieled an in-stream video advertising product that consolidates media placement and reporting for online video ads.
Called Universal In Stream, the offering is geared toward agencies and aims to simplify the deployment of ads that run before or during broadband video content.
With the new product, Klipmart will encode a single video ad and send the execution to each Web site in the media buy. The agency receives back one consolidated report with both reach and frequency metrics.
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The target customers are media buyers who may have to place more video campaigns and executions. Chris Young, Klipmart's CEO, says "the top 30 sites on the Internet," have certified the product. The site roster includes Yahoo!, but Klipmart hasn't gotten permission to divulge the names of other publishers.
Klipmart had processed about 10 beta campaigns for agency clients using the new system.
December 19, 2005
JibJab is not AdMad, looking for PayDay another way
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My brother and I still rent our apartments, and we don't drive fancy cars. We're profitable because we pinch pennies.
Gregg Spiridellis, 34, one of the Spiridellis brothers who started JibJab.
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The Spiridellis brothers seem happy to try numerous approaches to build their business in a way that lets them maintain their particular brand of humor, which Evan Spiridellis, 31, describes as "a little bit naughty but never quite R-rated." They're still not quite sure how to make money from their product, according to Cnet.
Yet JibJab, which recently added its eighth employee, is not exactly a raging commercial success -- at least not yet.
And according to the Cnet article, they are not looking to advertising as a source of revenue. It's because producing online entertainment, particularly video, supported by advertising is "still a very shaky business model," and the brothers "won't risk the integrity of our brand by putting a can of soda in the foreground."
Starz says their VOD service impacts DVD rentals
Starz Entertainment conducted a study amoung nearly 500 Comcast subscribers who were also users of Starz VOD package. Some of the conclusions:
"More than half -- even among those who described themselves as medium to light users of Starz on Demand -- said that they rented and purchased fewer DVDs because of the availability of films on the on-demand platform. Of the roughly 14 million Starz Encore subscribers, about 3.6 million regularly access the Starz on Demand service."
December 18, 2005
Connecting Dots ... Yahoo! and Seven Network
Earlier this year, Terry Semel said that Yahoo! aimed to become a major distribution platform rather than a production company. “Think of us as a global network,” he said. So, a recently announced partnership in Australia and New Zealand fits well into that idea.
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Yahoo! and the Seven Network will combine their online, mobile and IPTV businesses in a new equally-owned joint venture. This launch should start in late January, coinciding with coverage of the Australian Open tennis tournament and the Winter Olympic Games. New consumer offerings will ultimately be available across online, mobile and broadband television in areas such as news, sports, entertainment, television, games, music, and travel.
The Seven Network is a large television company in Australia and magazine company publishing titles including Marie Claire, Better Homes and Gardens and Men’s Health.
Yahoo! will become the key platform for the development of Seven beyond broadcast television and magazine publishing, as it builds its digital media division. Yahoo! is also the second major online portal in Australia, used by over 4.75 million Australians a month.
The rival Nine Network formed an alliance with Microsoft back in 1997, creating ninemsn, the most popular web site in Australia.
source: InformITV.com
I can't wait to watch Lord of the Rings on my 2" cell phone screen!
Do you want to watch video on your cell phone? Are you willing to pay for it?
An April 2005 JupiterResearch ask 1,100 people questions like those. Of those respondents, 44 percent said they would be interested in video at all. Only 19 percent said they'd consider paying for a video service.
Of those that would be interested, 25 percent said they would watch 30-minute live TV shows, and 21 percent would watch 60-minute live TV shows. Only 8 percent and 5 percent, respectively, would pay for those same services.
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See also: But will my phone ring when my TV show is about to start? |
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See also: MobiTV to Sell Video Ads on Cell Phones |
Monetizing Video Podcasts, Washington Post style
I see that the recent video podcasts at Washingtonpost.com want to be monetized with video advertising. For the next month, they signed up EarthLink as a sponsor.
Here is how it will work. Viewers see a video slide telling them the Washingtonpost.com video will play after a commercial message. Then a 15-second ad plays, followed by the content. People can see the video podcasts either on their Video iPods, or on the Web.
I will classify this as another ‘build it and [hopefully] they will come’ exercise. Here are the problems that will keep this monetization experiment small.
So far, there's no way to dynamically insert ads into video podcasts, so ads are actually part of the overall video file. This means the ads will still be associated with the video even if someone views the content years from now.
It's also technically impossible to measure actual viewership, though publishers can determine how many people downloaded the video file. Washingtonpost.com wouldn't reveal the size of the audience for its video podcasting service, but it's presumably quite small.
Dynamic ad insersion and verification are two vital components of a healthy, large-scale ad model. Both television and online advertising could not exist without them.
The companies didn't provide details of the financial aspects of the deal, but said it was priced on a flat fee basis. MediaVest negotiated the buy on behalf of EarthLink.
December 17, 2005
Follow the Money
Many digital media business plans are created around the idea that advertising revenue will monetize their initiative. I believe this thinking is the correct one. However, I continue to be amazed how many bright people embark on a 'build it and they will come' strategy. The 'they' are the advertisers.
The first point to make is that the big money, especially in television advertising, is decided inside the media-buying departments owned by the largest agency conglomerates. Advertisers set budgets and hire agencies to deliver results.
A second point: agency profit margins are razor thin and depend upon transactional efficiency for their profitability. That is, the more it costs an agency in labor to do things like post-buy analysis, the slimmer their profit margins.
It is not glamorous to say but starting in the late 1990's, agencies began competing on their media buying prowess. Some even outsource the creative process to others! When video on demand (VOD) and digital video recorders (DVR) and broadband television become more than experiments, these agency buyers will be the one spending the real money.
I read with interest the latest projections by media research firm RECMA.
WPP's media agencies — MindShare, Mediaedge:cia and Grey's MediaCom — give the British holding company control of 22.3% of the worldwide media-planning and -buying business.
Paris-based Publicis Group, parent of Starcom MediaVest and ZenithOptimedia, increased its share of the global media-buying business to 16%.
In fact, the media-buying units of the six big agency-holding companies now control 73.6% of the global business, up from the 57.8% a year ago—when there were seven holding companies (counting Grey).
Slicing up the Pie Percent of 2005 worldwide media-buying/planning market, it looks like this:
Group WPP Group Publicis Groupe Omnicom Interpublic Group Aegis Group Havas Others, unaffiliated Source: RECMA
Now comes the bonus credit test. Which privately held software company supplies media buying (not planning) solutions for linear television and print to most of the above conglomerates? Donovan Data Systems (DDS).
Posted by Martino Mingione at 10:48 AM | Comments (397) | TrackBackI wonder how much they spent for the consultants?
When it comes to preparing one's company for the digital revolution, some companies just knuckle down and accomplish more than others. The six-year-old independent TV and movie company known as Lion's Gate Entertainment will now be called LionsGate Entertainment.
Phew. Rarely do I see such bold vision. Not only did they drop the space between the names, they also got rid of the apostrophe!
CEO Jon Felthimer hopes the fresh strategy provides “a new look for an integrated, unified company that is greater than the sum of its parts,” CEO Jon Felthimer said.
Lionsgate is involved in diverse businesses, which extend beyond TV and theatricals to home and family entertainment, documentary films, music publishing and video-on-demand. It has also acquired the lionsgate.com domain name as it prepares for new digital distribution platforms.
December 16, 2005
Reach versus Targeting
An InsightExpress survey commissioned by ValueClick Media/Fastclick (Nasdaq: VCLK) had an interesting statistic in it. The respondents were comprised of 300 online media buyers.
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A significant number of respondents (40 percent) cited reach as their primary reason for using an ad network, followed by targeting (19 percent), and performance/ROI (15 percent).
note: Reach is the number of people you touch with your marketing message. Central calculation in a television ad buy is to determine how each media providers contributes to the reach and frequency goals of a media plan.
The party line amongst the Internet savvy intelligencia is that online advertising is all about ROI and that television advertising is a slowly dying medium because it is unaccountable. Another common refrain is that advertisers want ‘targeting’ and that is another reason why online grows faster than television.
So what does it tell us that even online buyers using ad networks also value reach more than targeting and ROI combined? Maybe, just maybe, this is a hint that when VOD, DVR, and Broadband TV are eventually monetized with advertising, reach will remain the most important objective.
Food for thought, anyways. I'd love to hear your opinion.
Top ad-supported Cable Networks for 2005
According to Nielsen Media Research:
TNT is the top ad-supported cable network YTD, averaging 2.58 million total viewers in prime time.
USA is in second, with an average 2.31 million prime time viewers.
Nick at Nite is third, with 1.89 million.
ESPN is fourth, with 1.79 million.
Fox News Channel is fifth, with 1.78 million.
December 14, 2005
Hollywood's favorite plot lines always revolve around someone else's money.
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Forbes author Peter Kafka notes that the combined value of all Dreamworks assets totals $3.4 billion. After comparing it to the the original $2.7 billion value when the company was capitalized he notes that it produced a stunning 2% annualized return. But the founding trio only put up $33 million each -- and the Paramount deal alone will make them $170 million.
The lesson is use someone else's money. I helped create a small company for a multi-billionaire once and he also kept making that same point.
"Now Viacom will be attempting the same trick. They will lay out $1.6 billion for the DreamWorks deal, but ... [are] looking to immediately bring in private backers to pick up ... $1 billion of that, in exchange for DreamWorks' 59-film library. Viacom's pitch: The films ... will throw off around $700 million over the years. And at some point ... investors will be able to resell the asset for another $700 million or $800 million."
For any of you out there who want high-quality movies to help make your digital media business plan work, there is one approach. Maybe Les Moonves should call Brian Roberts.
"Viacom ... will be on the hook for up to $600 million of the purchase price. But it will be able to begin to see cash flow almost immediately through a distribution deal with DreamWorks Animation. Now the risk begins to look much more modest: Paramount is getting a ready-made pipeline of films, the rights to use the animation studio's output in conjunction with its powerhouse cable networks, like Nickelodeon, and Steven Spielberg's halo effect. And it only has to bet a few hundred million of its own dollars."
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Read the entire aticle. |
In his own words ...
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Every week there are 436,000 illegal downloads of Battlestar Galactica. Clearly, someone is downloading it and watching it on a smaller screen. Ever since iTunes went online with video, there have been 500,000 downloads per week. It's pretty clear people want to watch this stuff. Now, given that we are selling Battlestar Galactica for $1.99, there is finally a legitimate model in place.
Jeff Zucker, NBC Universal Television Group President, answering the question: Do people want to watch 30- and 60-minute shows on smaller screens?Posted by Martino Mingione at 12:25 PM | Comments (427) | TrackBack
Read the entire interview in Broadcasting & Cable. Subscription required.
Monetizing the Digital Media Revolution
You may have notice in the banner above that I have retitled the motto of this blog to "Monetizing the Digital Media Revolution."
This seemed appropriate since many of my posts have focused on how businesses either compete against each other or are finding ways to monetize their business plans.
It is my hope that you enjoy having at least one information source that is primarily focused in this direction. Either way, I would like to know what topics are of most interest to you. Drop me a comment!
Posted by Martino Mingione at 10:19 AM | Comments (1550) | TrackBackBut will my phone ring when my TV show is about to start?
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Apple's Video iPod has contributed to an acceptance of watching mobile video on a tiny 2" screen. If so, then my original opinion that people would not watch TV on their cell phones could be wrong.
Royal Philips Electronics has been a longtime proponent of mobile TV viewing. Executives there said earlier this year that they expect more than 50% of handsets worldwide will come with TV capability by 2013.
The electronics giant announced it will introduce to the U.S. next year the mobile TV broadcast chipsets it has successfully tested in Europe and Japan.
Stock speculators might want to look at Crown Castle Mobile Media (ticker: CCI) because Phillips will partner with them. That stock is already up over 60% YTD. Crown Castle also owns certain broadcast spectrum rights and plans to launch a mobile broadcast network in the U.S. in 2006.
Phillips' new chipset is its first all-in-one broadcast solution for wireless handset makers. Nokia is testing the chips in Europe, but we do not know who will use the chips in the U.S.
Competing chipmakers such as Texas Instruments and Qualcomm also have announced plans for broadcast phone chips. Qualcomm announced a similar all-in-one chipset solution two weeks ago. That chipset uses a different standard that Qualcomm said Verizon will use for real-time broadcasting; no launch date has been revealed.
Finding content is an issue:
Do you have anything a little more ... post-Police Academy?
by John Paczkowski at Good Morning Silicon Valley
12/15/05
HBO will put clips from its series, specials and sports programming on a new on-demand streaming video service being launched early next year by Cingular.
HBO Links With Cingular for Exclusive Content Deal
Broadcasting and Cable
December 13, 2005
When life hands you lemons, make lemonade
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It is popular throughout the blogosphere to point out traditional media companies are in trouble. The most common theme is that these dinosaurs will die off; eventually replaced by online companies who 'get it.' Into that discussion, here is a little factoid to contemplate:
Of $2.7 billion spent on local online advertising last year, newspapers nabbed $1.19 billion, and TV stations got $119 million of the ad pie, according to media-research firm Borrell & Associates.
It is true that television stations and newspapers have a serious challenge and I don't mean to imply that they will prosper. But these media dinosaurs (who mostly focus on local audiences) are getting almost 50% of local online revenue. I wonder how much of the pie they will receive after they 'get it.'
December 09, 2005
Our Blades do not star Wesley Snipes
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Why is this man (Bill Styslinger) smiling? Maybe it is because SeaChange International stock (SEAC) has risen 28% in the last month. So, I looked around for news and found this: they have fancy, new equipment upgrades deliverable in early 2006. SEAC is the leading provider of ad insersion gear and VOD servers to Comcast and Time Warner. They are also competing for the IPTV and broadband markets.
SeaChange says that their Ingest Blade will allow broadband operators to capture hundreds of TV programs at a time and make them immediately available via VOD. The new blade is scheduled for customer shipment early next year.
The company says that the new blade, together with its previously announced Memory Blade, exemplify its strategy of helping operators add streams, storage and ingest independently, in convenient increments, to both new and existing systems.
SeaChange claims that its new blade products allow even small, standalone servers to record more than 50 channels simultaneously and deliver thousands of VOD streams.
According to SeaChange, the potential of the new blades is fully realized when used in tandem with its Axiom video operation system software, which dynamically manages the lifespan of VOD content.
Follow the Money (in Hi-Def)
Comcast Corp. is expected to spend the same amount of money on capital expenditures in 2006 — $3.4 billion — as it did in 2005, according to a new research study by Sanford C. Bernstein.
Comcast's strategy of deploying high-definition digital video recorder combination boxes has put Comcast far ahead of competitors in HD-readiness. By the end of 2005, Comcast will have pre-positioned HD in 24% of digital homes.
For those of you who look for investment plays: these boxes are supplied by Comcast to their digital customers for free and it is Motorola who supplies them.
Meet the Press netcasts on MSNBC.com
NBC says that their 'Meet the Press' podcasts are popular. The company says that "since its launch in July, monthly downloads have increased tenfold – with 90,000 downloads in November and 25,000 already in the first week of December."
With the philosophy that content just wants to be consumed however each person dictates, starting this Sunday, Meet the Press can be watched via broadband at the viewers convenience.
"We are already appointment television on Sunday mornings for those who are home. Now if people are busy with their families when we are on the air, they can watch us when it is convenient for them" said Tim Russert.
Oh, you asked if our new service could scale. I thought you asked if it could stall.
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TiVo announced nearly a month ago new services that include movie tickets from Fandango, shared photo slide shows, weather and traffic information from Yahoo!, and Internet radio shows and podcasts. They'll be free to TiVo subscribers, who already either pay a monthly fee of $13 or have purchased a lifetime subscription.
But many people won't see the new features for another two months, according to a company spokesman, who called the distribution of software updates a "progressive rollout."
Especially eager TiVo owners can attempt to expedite their machine's download of the software by going to a page on the TiVo.com site called "software priority request," but the new functions may still not arrive for several weeks.
In his own words ...
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We are a pretty simple company. We are trying to make content and then we want to be able to get it into viewers’ homes ... without gatekeepers, without intermediaries.
Peter Chernin, News Corp.’s Chief Operating Officer, while speaking to investors at the Credit Suisse First Boston Media Week Conference. The single biggest trend has been the growth of broadband and that bodes well for content companies such as his.
December 08, 2005
I may not defend my neighbor's television habits, but I defend to the death his right to watch it
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There is no need to come up with additional puns or insights. Click on the link to read the entire article, but here are the best excerpts.
(excerpts from George Will's article 'The Inalienable Right to a Remote')
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Feeling flush with (other people's) cash, the Senate has concocted a novel way to spend $3 billion: create a new entitlement. The Senate has passed -- and so has the House, with differences -- an entitlement to digital television.
If this ... becomes law, everyone who owns old analog television sets ... will get subsidies to pay for making those sets capable of receiving digital signals.
... this story illustrates the timeless truth that no matter how deeply you distrust the government's judgment, you are too trusting
Why is this a crisis? Because ... by April 2009 broadcasters must end analog transmissions and the government will have auctioned the analog frequencies for various telecommunications purposes. For the vast majority of Americans, April 2009 will mean . . . absolutely nothing. Nationwide, 85 percent of all television households (and 63 percent of households below the poverty line) already have cable or satellite service.
.. Today a digital-capable set with a flat-screen display can be purchased from -- liberals, please pardon the mention of your Great Satan -- Wal-Mart for less than $460. But compassionate conservatism has a government response to the crisis ...
... The $990 million House version of this entitlement -- call it No Couch Potato Left Behind -- is (relatively) parsimonious: Consumers would get vouchers worth only $40 and would be restricted to a measly two vouchers per household. The Senate's more spacious entitlement would pay for most of the cost -- $50 to $60 -- of the converter boxes. But there is Republican rigor in this: Consumers would be required to pay $10. That is the conservatism in compassionate conservatism.
... defenders of this entitlement argue that taxpayers will not be burdened by its costs because the government's sale of the analog frequencies will yield perhaps $10 billion.
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Think about that: Because the government may get $10 billion from one transaction, taxpayers are unburdened by government's giving away $3 billion with another transaction...
Simply amazing. Maybe we can get Congress to underwrite VOD content next!
Looks like some portion of this hair-brained scheme was included in the final bill.
House OKs Digital Broadcast Conversion Plan
by Mitch Shapiro at IP & Democracy
Acacia projects that New Tools will Push Interactive Advertising
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Interactive advertising is an idea that opens up a 2-way connection between advertiser and consumer. We all know that online interactive advertising has grown by leaps and bounds over the last 10 years. However, that growth may be crude when compared to what could happen after interactivity is added to television, phones, and other devices. OpenTV, the acquirer of the last company I built, is in that field of expertise.
One thing I focus on is the lack of tools for both the buyer and sellers to make this market function properly. There is no future DoubleClick yet in this field and existing Internet tools are not up to the job.
With that said, tools and middleware available for the interactive advertising industry are set to take off in the next five years, according to Acacia Research Group. This is a belief that I share, so I thought it would be good to share some of their information with you.
(excerpts from ClickZ, written by Enid Burns)
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Tool and middleware vendors offering artificial intelligence and other software applications are expected to see sales to the interactive advertising industry reach $190 million by 2010. Sales for 2005 are recorded at just $19.6 million, according to the report.
… Such applications are already used in video games, and in-game advertising. The offering creates possibilities for the Internet, mobile applications and other platforms, though each medium creates its own set of challenges...
"To deploy content across operators and handsets, you need middleware to reach all users," said [Christine Arrington, senior analyst at Acacia]
The tools and middleware that will aid advertising and marketing across multiple interactive channels is still in its early stages. Tool and middleware providers require some marketing of their own to be recognized by the advertising industry.
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"There's a world out there that advertisers can take advantage of, especially with the growth of broadband," said Arrington. "It's going to take toolmakers proving to advertisers that the tools they have can make it easier to develop interactive advertising."
The report was compiled with primary research via interviews and surveys with product vendors; technology suppliers; professional organizations and government agencies; distributors and end users within the market where possible. Forecasts were then made based on the survey and interview findings.
For anyone planning on competing in this arena, the report is a must. However it is costly. If you want that report click here and mention that Martino Mingione refered you to get a 10% discount.
December 07, 2005
Gordon Gecko updated for the 21st century: 'Tiered Pricing is Good'
The one bright spot for the music industry has been Apple's iTunes store, which has sold 600 million songs since 2003, accounting for 80 percent of legal downloads in the United States.
But what price is fair? Apple says it is 99 cents a song. Of this, Apple gets 4 cents, the music publishers snag 8 cents, and the record companies pocket most of the rest.
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Slate's Adam L. Penenberg wrote a good piece called The Right Price for Digital Music, Why 99 cents per song is too much, and too little. In it he suggests that a NASDAQ-like should exist for music downloads. I include it here because it's well written and the idea could also apply to video as well.
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Steve Jobs, who has been willing to take a few pennies per download so long as he sells bushels of iPods, calls tiered pricing "greedy." That view is shared by millions of consumers who believe the record companies have been gouging them for years. …
What we need is a system that will continue to pack the corporate coffers yet be fair to music lovers. The solution: a real-time commodities market that combines aspects of Apple's iTunes, Nasdaq, the Chicago Mercantile Exchange, Priceline, and eBay.
Here's how it would work: Songs would be priced strictly on demand. The more people who download the latest Eminem single, the higher the price will go. The same is true in reverse — the fewer people who buy a song, the lower the price goes. Music prices would oscillate like stocks on Nasdaq …
Since millions of tunes sit on servers waiting to be downloaded, the vast majority of them quite obscure, sellers would benefit because it would create increased demand for music that would otherwise sit unpurchased …
The big wild card here is the impact of illegal file sharing. David Blackburn ... has argued that peer-to-peer systems increase demand for less popular recordings but dampen sales of hits. If that's the case, charging extra for top sellers might just push legal downloaders back into the outlaw world of peer-to-peer file trading … A Digital Music Exchange may not be a perfect solution, but who would you prefer to set the price of music: consumers or record executives?
December 06, 2005
Google is not invincible. There, I said it and I am still standing.
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There is a flurry of discussions concerning Google and their expansion beyond the traditional search engine marketing sector – particularly in new forms of advertising. Undoubtedly, stories appearing in the New York Times have helped contribute to this. I can personally attest to conversations with large existing companies who participate in television advertising. The question is often ‘what Google is planning?’
I am not in the ‘know’ about Google’s ambitions. But from where I sit, they have a lot to learn about television media buyers and I don’t yet see any of the necessary moves that would make them successful in that venue. Television advertising is about branding and buyers there use metrics like reach and frequency. That is in stark contrast to SEM and its cost per click CPC metrics.
It’s chic on the Internet to say that television is dead and online is where it is at. Perhaps there is a clause in everyone’s blogging contract to say that someday all money spent on television advertising will eventually shift to the Internet. At the risk of being booted off the blogosphere: that is plain wrong.
An article in BusinessWeek reminds us that Google is not invincible and that they can fall short when entering into non-SEM lines of advertising. The article’s sub-title says it all: Why its plan to resell print ads to its army of advertisers may be off to a slow start.
"Google … purchased about a dozen pages of ad space from niche publications such as PC Magazine and Budget Living. Google then divvied up the space and sold it in small pieces, often four to seven per page, to its network of several hundred thousand advertisers -- most of whom can't afford pricey magazine ads on their own."
"… Only one of 10 advertisers interviewed by BusinessWeek said their print ad performed well enough to recoup the money it cost. And eight of the 10 were unhappy enough with the results that they say they're unlikely to do further print advertising with Google."
I am a satisfied consumer who uses Google for search everyday. I am a very happy investor who owned some Google stock during a part of its meteoric rise. But, despite my admiration for the company, I must say that Google will have to amend its strategy if it wishes to meld its technology advantage with television advertising.
Posted by Martino Mingione at 03:38 PM | Comments (85) | TrackBackLaugh it up, Fuzzball
If you want to get access to high-quality movies legally via the Internet on a pay-per-view basis, Movielink is likely your destination. The company is a joint venture between MGM studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. Studios.
Two weeks ago, Movielink signed a distribution deal with 20th Century Fox, covering both new-release and library titles. The first Fox titles to be available on Movielink include the CG-animated movie "Robots" and the horror film "Hide And Seek". Movies you will not find there are the Star Wars films because that series of titles is excluded from the deal.
MovieLink now has distribution rights to titles from each major studio. Movielink competitor, CinemaNow, has had a distribution deal in place with Fox for around two years.
Use an MP3, go to Prison
I have long believed that entertainment companies and software companies do not under how free digital distribution can often lead to more revenue, not less. I first witnessed this phenomenon back in the 1980's; when people 'stole' an expensive and popular PC program, only to end up as a legitimate sale in the future just because they wanted the latest and greatest versions.
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This sentiment was expressed in an opinion piece by Damian Kulash Jr., the lead singer for OK Go, written in the NY Times.
On whether non-paid content automatically means that the music industry lost money:
"... the major labels need to face reality: ... It's much better to have copies of albums on lots of iPods, even if only half of them have been paid for, than to have a few CD's sitting on a shelf and not being played. ... This is not just our megalomania, it's Marketing 101: the more times a song gets played, the more of a chance it has to catch the ear of someone new."
And on Digital Rights Management (DRM):
"Conscientious fans, who buy music legally because it's the right thing to do, just get insulted. They've made the choice not to steal their music, and the labels thank them by giving them an inferior product hampered by software ..."
iPod ups Video offering with an NBC deal
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NBC Universal has joined ABC in serving up video to owners of Apple's Video iPod. This deal started to bring primetime, cable, late-night and classic TV shows to the mobile device as of 2am this morning.
iTunes includes shows such as Law & Order and The Tonight Show with Jay Leno. Other shows include The Office, Surface, Late Night with Conan O'Brien, Monk and Battlestar Galactica.
Classic TV shows will also be offered as part of the partnership, including Alfred Hitchcock Presents, Dragnet, Adam-12 and Knight Rider.
"In our first two months we have sold more than three million videos, and have expanded our TV catalogue from five shows to 16 shows" said Steven Jobs.
The TV shows are available in the US only, and video availability varies by country. TV shows are $1.99 per episode, and music videos and short films are $1.99 each.
The deal with NBC means that iTunes now offers more than 300 episodes of 16 TV shows for viewing on a computer or iPod.