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March 23, 2006
FCC embarks on its plan to foster online video
If the FCC intended to scare TV networks into sanitizing broadcast programming by imposing staggering multimillion-dollar "indecency" fines, the tactic worked. The feds have chased portions of the new WB show "The Bedford Diaries" off the air--and onto the Web.
The New York Times reported today that the WB is shying away from broadcasting scenes that could potentially offend the federal watchdogs. But, rather than leave the footage on the cutting room floor, the WB will make the entire, unexpurgated version of the show available online.
On the other hand, providing complete "director's-cut" shows online can only be a boon for the Web, ultimately driving more and more consumers online, showing them that content unavailable anywhere else can be found on the Internet.
Nielsen To Report TV Viewing Via Web, Will Use Software Meter To Do It
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Nielsen's No. 1 priority for the next couple of years isn't commercial ratings, TV time, or place-shifting, or even advancing its traditional in-home measurement of conventional TV. It's understanding the link between television and the Internet, and the company plans to introduce a new method for measuring television programming viewed over the Internet by the end of this year, Susan Whiting, CEO of the TV ratings giant, told a roomful of the nation's biggest advertisers Wednesday during a presentation in New York.
Read more of Joe Mandese's story >>
Posted by Martino Mingione at 12:07 PM | Comments (1) | TrackBackANA Marketers: Our TV Spots Are Tanking
An interesting poll of advertisers conducted by Forrester Research and reported by Zachary Rodgers.
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Television is an increasingly wobbly target for ad spending and will likely soon begin hemorrhaging dollars to interactive and other channels. That's according to a Forrester poll of 133 advertisers who control more than $20 billion in advertising. Among those surveyed were Charles Schwab, Colgate, Dunkin' Donuts, Johnson & Johnson, Mattel, Pfizer, and Verizon.
The study, undertaken in conjunction with the Association of National Advertisers (ANA) and presented at the TV Ad Forum in New York, found 78% of these marketers feel the potency of their television advertising has declined in the last two years.
Seventy percent believe digital video recorders (DVR) and video-on-demand (VOD) will "reduce or destroy" the effectiveness of :30 spots. And once DVR penetration grows to above 30 million households, 24 percent intend to cut their TV ad budgets by at least a quarter and reallocate that money to online advertising, product placement and other channels. Smaller percentages said they'd pursue program sponsorships, product placement and online video ads (45%).
Posted by Martino Mingione at 11:06 AM | Comments (288) | TrackBackMarch 22, 2006
Brightcove acquires MetaStories
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Internet TV player Brightcove has acquired rich media technology provider MetaStories to increase its self-service publishing capabilities.
MetaStories' StoryMaker tool is a hosted service that lets producers of online content combine video, graphics, text, and audio components to create Flash-based rich media. Its Web-based video editing tools are expected to complement Brightcove's existing tools to publish, track, and monetize existing video content.
MetaStories' StoryMaker tool is used by media companies like Yahoo!, MSN, Discovery Networks and Scripps Networks. Yahoo! uses StoryMaker to produce its "Kevin Sites in the Hot Zone" episodes; while Scripps uses it for producing niche broadband channels for its HGTV, DIY and Food Network content.
MetaStories' client list is also complementary to Brightcove's, with many of the companies either working with Brightcove or on Brightcove's radar as a potential client.
Like Brightcove's own online video publishing tools, StoryMaker creates Flash-based content, which fits in with founder Jeremy Allaire's past experience as CTO of Macromedia.
The companies did not disclose financial terms of the acquisition.
Posted by Martino Mingione at 09:41 AM | Comments (83) | TrackBackVOD, DVR's and the Cable Providers
New consumer research from the Leichtman Research Group, finds that nearly three quarters of VOD users who have a DVR from their cable company strongly agree that their cable service is better because they have both Video-on-Demand (VOD) and a Digital Video Recorder (DVR). Few report that they are likely to switch providers.
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Just 15% feel that they don't need a DVR because they have on-demand service, and 19% feel that they don't need on-demand service because they have a DVR.
Among VOD users who have a DVR:
Mean spending on cable TV service is $76.65 per month (43% above average)
78% also get high-speed Internet from cable
Mean annual household income is 42% above average
65% of current digital cable subscribers have used VOD
Just 16% of current VOD users report that they would be very likely to pay $0.99 to get a primetime program on-demandPosted by Martino Mingione at 09:31 AM | Comments (25) | TrackBack
IAB proposes guidelines for Broadband Video
The INTERACTIVE ADVERTISING BUREAU is calling for comment on a set of guidelines for broadband video commercial measurement. The proposed guidelines address online browser activity that involves streaming video.
According to the guidelines, "a valid broadband ad impression may only be counted when an ad counter (logging server) receives and responds to an HTTP request for a tracking asset from a client. The count must happen after the initiation of the stream, post-buffering, as opposed to the linked broadband content itself."
Web Execs: TV Merging With Internet
I was reading an article by Erik Sass. It quoted panelist comments hosted by the Advertising Research Foundation in New York. Two of the panelists were interesting enough to include here. Here is an excerpt of those comments with a few of my own mixed in.
Internet companies will increasingly rely on TV networks to provide online content.
"They do have the content," Yahoo Executive Vice President Greg Coleman said of the major TV industry players, adding: "the answer is going to be partnerships of all different kinds."
Joanne Bradford, corporate vice president of global sales and trade marketing and chief media revenue officer for Microsoft, said that even though the Internet and television are melding, TV isn't likely to dominate the smaller, fledgling Internet advertising market.
"The industry is not at a place where you can just turn over what we do to television," she said, stressing that online ad sales are driven by data. "It's a very different sell--it's bought in a different way; the back-end reporting structure is different."
I’ll kibitz here a little. She is absolutely correct but I have a different question: if Madison Avenue were willing to shift a portion of its huge $18B television ad spending ($60B from all U.S. sources) away from traditional television into online television, would online media companies sell their ad inventory differently? I think so.
Bradford noted that online agencies' capacity to place premium inventory still lags far behind demand -- meaning that a huge pot of ad dollars are being lost every year. "Until we're at the place that we have operational scale and ease of use as an industry, we're always going to be behind," Bradford warned, concluding: "[TV's] not as efficient as we are, but we don't have the scale that they do."
Experience has taught me one thing: the definition of efficiency is different on Madison Avenue. Their economics dictate that the best buy is one that fulfills the media plan and generates very low internal overhead costs. And I am afraid to say that by that measure, Ms. Bradford, TV is the most efficient medium.
March 20, 2006
Do the Math, download fees alone don't cut it
Dick Wolf, the producer of the Law and Order series, said the following in Variety:
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That doesn't include profit participants or the studio, of course, so let's say ($30 million) is cut 50-50 with the studio and everybody else. To the network, that's a grand total of $15 million -- and 22 episodes of a hit like that are worth a lot more than that.
"Housewives" might average $250,000 for a thirty-second commercial spot. With about 20 thirty-second spots an episode for ABC to sell, that comes to $5 million for just one episode. Over the course of a season, that's $260 million in average gross revenues ABC pulls in.
That is way more than one gets from downloading fees.
Posted by Martino Mingione at 03:51 PM | Comments (38) | TrackBackNCAA March Madness Video Streams
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Here we are in the middle of NCAA March Madness, with college hoops fans among the best consumer audiences a marketer could hope for because they are loyal, passionate, educated, and affluent.
As of Sunday night, CBS said its NCAA March Madness on Demand (MMOD) served more than 14 million streams of live video from the 2006 NCAA® Division I Men's Basketball Championship. It logged more than 4 million visitors during the first four days of the tournament.
CBS said that a total of 1.15 million users have registered for March Madness on Demand.
CBS also scored nicely with sponsorship of the extravaganza from the likes of Courtyard by Marriott, Dell, Lowe's, Pontiac, and State Farm.
Posted by Martino Mingione at 12:37 PM | Comments (23) | TrackBackMarch 09, 2006
The Third Screen
Information week reported that mobile phone content is forecast to reach $43 billion worldwide by 2010, up from $5.2 billion in 2004. Content covers music, games, and video. The study is a forecast by research firm iSuppli Corp.
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Video offers the most significant long-term opportunity in the mobile-content market, according to Mark Kirstein, iSuppli vice president of multimedia services and content. Growth in the mobile TV market will rely on new phone deployments, iSuppli said, estimating TV-capable phones will only represent 12 percent of the market by 2010.
To be sure, those growth projections sound impressive, but what about mobile advertising? According to Ad Age, advertising and cell phone-based content aren't mixing well yet. The article goes on to point out that advertisers are not even in any discussions about getting their message onto phones.
Nevertheless, a survey by Airwide Solutions, a mobile software company, suggests that there’s a huge appetite among marketers to get connected to cellphones, given their very personal nature. The survey, published Feb. 27, claims that 89% of major brands are planning to market via mobile phones by 2008, and more than half of brands plan to spend between 5% and 25% of their marketing budget in the medium in the next five years.
In my humble opinion, advertisers will play a bigger role in the wireless universe once consumers start feeling “digital sticker shock,” as they add up all the seemingly small charges for new content.
A number of commentators feel that wireless carriers are standing in the way of progress and suggest that carriers want to protect a pricing model that favors subscriptions over a wide array of free ad-supported content that cuts them out of the revenue picture.
Posted by Martino Mingione at 09:28 AM | Comments (10) | TrackBackMarch 08, 2006
First Time since 2001
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The Big Six networks -- ABC, CBS, Fox, NBC, UPN and WB -- collectively took in $22.3 billion last year, down from $22.37 billion the prior year, as a half-dozen of last year’s top 10 advertisers as measured by TNS, including Procter & Gamble Co., DaimlerChrysler and Johnson & Johnson, reduced their spending.
Posted by Martino Mingione at 04:54 PM | Comments (1848) | TrackBackIn his own words ...
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Google CEO Eric Schmidt talking about television's lack of targeting ads in a similar fashion as Google's targetability in online search. He also hinted that Google may have an answer for television.
Posted by Martino Mingione at 03:47 PM | Comments (18) | TrackBackMore Evidence of the coming Adpocalypse
I've made the observation numerous times that people will ultimately opt for an ad-supported VOD model over a pay-per-view scheme.
Broadcast networks are selling some of their most popular shows on Apple’s iTunes for $1.99, but a new study finds that most consumers would be willing to watch an ad if the sponsor picked up the cost of the show. And if that model becomes the standard, more would be interested in buying a video iPod.
The survey, which explored attitudes toward video iPods, found that 54% of respondents would be more likely to purchase an iPod if TV programs could be downloaded free of charge in exchange for watching a 30-second advertisement.
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Read more about that study in AdAge. (Sorry, subscription required) |
I think it is unrealistic that an advertiser would pay $1.99 for one ad insertion to one iPod viewer because that implies a hefty $1990 CPM. More realistic is that multiple ads would have to be inserted into the content, in a similar manner as regular linear operates.
Oh, and I recall writing about an upstart company called Ultramercial that forces you to choose: your money or your time.
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See how the Ultramercial business model works. |
A little thought about AT&T
Just a little observation about the proposed AT&T merger.
AT&T's footprint is already bigger than the biggest cable company. Also, the new telco's market capitalization will be more than the entire cable industry combined.
But I recall working with the cable industry when AT&T purchased TCI. The telco did not know what to do with television then. I doubt it has learned what to do with it since selling out to Comcast. So, I it is still Comcast's business to lose.
Schedule your TiVo from your cell phone
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TiVo subscribers will soon be able to program television recordings straight from cell phones using the Verizon Wireless network.
Dubbed TiVo Mobile, it's also the latest feature the company is introducing to help differentiate itself from the growing number of rival DVR offerings from cable and satellite TV operators.
Posted by Martino Mingione at 01:25 PM | Comments (19) | TrackBackMergers of Old Media and New
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For many traditional media companies, consolidation is the way to go when it comes to developing or furthering an online presence. This strategy has proven easier and more lucrative than in-house development for companies like News Corp., Dow Jones & Co. and now, NBC Universal, which this week announced a $600 million acquisition of iVillage.com.
A good article about this trend was written by David Shabelman at TheDeal.com. Here are some highlights:
NBC Universal Inc.'s $600 million acquisition of iVillage Inc. highlights the rapid-fire consolidation among Internet content providers, reflecting the growing shift of advertising dollars from print products to online properties.
The most recent run on Internet content companies began in November 2004, when Dow Jones & Co. of New York agreed to acquire online financial news site MarketWatch Inc. for $528 million. In March 2005, The New York Times Co. spent $410 million to acquire consumer information firm About Inc. from Primedia Inc. Media giant News Corp. of New York joined the rush in late 2005, spending a total of $1.2 billion to acquire Intermix Media Inc., with its popular MySpace.com social networking site, and IGN Entertainment Inc., a provider of video game information that also runs movie information Web site RottenTomatoes.com and lifestyle site AskMen.com.
Valuations in Internet content deals have ranged widely. The iVillage deal, pegged at 24 times the company's fiscal 2006 Ebitda, is at the high end of comparable transactions, according to New York investment bank Jefferies & Co. The purchase of IGN was valued at only 13 times 2006 Ebitda, while the Intermix acquisition was valued at 21 times Ebitda, reflecting greater growth prospects associated with MySpace.com.
Driving the rush to acquire Internet content sites is an upsurge in online advertising.
Despite the boom in online advertising, however, even stronger independent content providers such as iVillage are teaming with larger companies rather than brave the mounting competition from major media companies.Posted by Martino Mingione at 01:02 PM | Comments (103) | TrackBack
March 07, 2006
Cingular launches new mobile TV service
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Cingular will announce an on-demand mobile TV service that runs over its new 3G wireless network. The service is called Cingular Video; allowing viewers to select short three- to five-minute clips from 18 different channels, including selections from shows airing on the Cartoon Network, NBC and ESPN.
Cingular has partnered with media companies to offer content from sources such as Fox News, which will offer short clips of news, and HBO, which will offer clips of "The Sopranos," "Sex and the City," "Curb Your Enthusiasm" and "Entourage."
Cingular Video should be available free of charge to Cingular customers purchasing an unlimited 3G data package, which costs $19.99 per month. The data package also allows for unlimited text messaging, e-mailing and picture sharing over the network. To receive clips from HBO, customers will have to subscribe to a premium channel, which costs $4.99 per month.
Cingular's 3G network is currently available in Austin, Baltimore, Boston, Chicago, Dallas, Houston, Las Vegas, Phoenix, Portland OR, Salt Lake City, San Diego, San Francisco, San Jose, Seattle/Tacoma, and Washington.
Posted by Martino Mingione at 09:34 AM | Comments (44) | TrackBackAOL To Sell Programming -- Just Like Yahoo! and Google
Reuters is reporting that Time Warner's AOL unit will soon behave even more like Web rivals Yahoo! and Google when it begins selling content on its site. The company says it will not limit content to what is produced by Time Warner's various divisions. Instead, it is in discussions with an array of TV networks and other providers of video and music.
One reason AOL is beginning to go where others have gone before is the perception that Apple's iTunes site, which has been enormously successful, imposes too rigid a price structure on consumers. AOL will be more flexible in its pricing. Some of the content available for download will even be free.
