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The Media Industry Advisory Service blog delivers future perspective on how media companies can move from the analog/physical present to the digital/virtual future. The blog examines both tactical events in the industry as well as long-vision strategic ideas, framed by the team’s many voices. We view our blog as a dialogue; please join us in this discussion about technology and the media industry.
12 May, 2008 11:02 AM EST
MySpace Cracks Open the Door on the Future of Social Networking
Posted By: Andrew Frank, Research VP
"The walls around the garden are coming down," according to Chris DeWolfe, the CEO and co-founder of MySpace, still the world's No. 1 social network according to many measures. He was referring to MySpace's announcement of its Data Availability initiative, which will let members opt in to share MySpace profile data with other Web sites, including Yahoo, eBay, Photobucket and Twitter.
Data portability in social networks has become a hot-button topic, and a great deal of power hangs in the balance as the social networking giants contemplate how best to liberate their users' data without either: a) creating a privacy or security backlash, or b) giving away the store (that is, both their traffic and their proprietary access to profile data of great potential value for targeted advertising) In this announcement, MySpace has signaled a cautious phased and modular approach to the issue. It has stepped - but not leapt - ahead of the crowd by carefully limiting the capabilities of the offering, while keeping open plenty of options for its next step. At the foundation of this offering is the OAuth standard, which governs how an API supplying data can authenticate itself to a third party - for instance, how a site like Twitter can allow a user to disclose data from an unrelated service provider such as MySpace and authenticate that the data it receives really is from MySpace. There are two important things to observe about this. First, OAuth covers only the authentication of the API data, not the user, who is authenticated through an external dialogue directly with myspace.com. Third-party authentication of users is the province of OpenID, a related standard that MySpace has indicated it may support in the future but has not yet committed to. Second, as a direct result, the data sharing model is unidirectional - that is, MySpace can export but not import profile data, restricting the service to MySpace members who wish to apply their profile data elsewhere, not users of other social networks who wish to import data to MySpace. This is why the offering is not a leap into the unknown. Also not included is a business model, such as third-party sites using disclosed MySpace profile data to target advertising on their sites for a revenue share back to MySpace. At first glance, this seems like a triple play: third parties get higher CPMs from MySpace's HyperTargeting system, MySpace gets more revenue, and users and privacy advocates get truly transparent opt-in control. The fact that MySpace has restrained the scope of this announcement to omit this feature, which would surely please some anxious shareholders, is another indication of the measured pace of innovation in this tricky area. All of this leads to the question of why, given all the risks along with MySpace's persistent membership loyalty even in the face of challengers as formidable as Facebook, MySpace would do this. Its answer rings true: MySpace's audience is demanding it, and better to give them what they want by carefully opening the door while trying to maintain order than to wait for them to crash the gates. 08 May, 2008 06:33 PM EST
Overreaching or Protecting Vital Copyright/IP?
Posted By: Michael McGuire, Research VP
Well, the so-called "PRO-IP" amendment to copyright law has cleared the House. The proposed bill seeks to increase the penalties for pirating content (with a special focus on counterfeiting) to include asset seizures such as computers and even real estate. Yet, what caught our eye are the provisions for the creation in the Executive Office of the President of an Intellectual Property Enforcement Officer (similar to the U.S.'s Trade Representative.)
Not surprisingly, it is backed by the major media companies, which on the face of it doesn't necessarily mean it's evil, but it does mean one shouldn't blindly accept it. The question I have is: Where is all the extra enforcement going to come from? Aren't most law enforcement agencies pretty busy already? Who will set the policy objectives for the Intellectual Property Enforcement Officer? Already, the Justice Department is raising objections to the bill, fearing the IPEO (nice acronym) may infringe on its turf. 05 May, 2008 11:28 AM EST
Reality and Perception at Yahoo and Microsoft
Posted By: Andrew Frank, Research VP
As the world searches for deeper meaning in the final chapter of the Microsoft-Yahoo acquisition story (…or is it?), one emerging storyline defines this as the moment when Microsoft saw its last, best chance to catch the new computing champion, Google, slip through its fingers. The New York Times, for example, claims "Google…has leapt far ahead in markets like web advertising." Well, besides web advertising…or, more precisely, web search advertising, what markets would those be? Of course there's much enthusiasm about the future of cloud computing services, but today these are speculative notions with no significant revenue attached. No, this deal was about digital advertising, and its ability to supply the economic fuel necessary to innovate computing’s nebulous future. The point is, as important as advertising revenue may be, Google's dominant paid search model is surely no hammerlock on innovation, and even Google itself continues to adjust and optimize that model in anticipation of shifts in the market. In this sense, Microsoft may be better off focusing on innovations of its own in the areas of search and online ad management, rather than wrestling with daunting service integration issues which many feared with aYahoo merger.
Then there's the storyline about Yahoo's comeback hopes, frequently pinned to a potential search alliance with Google. This, too, seems overblown. Such an alliance, assuming it could evade antitrust concerns, can only take Yahoo so far. Yahoo, like Microsoft, will also need to innovate boldly to capture the next wave of digital ad spending, which is multichannel (including mobile and next generation TV platforms) and driven by persistent demands for more accountability from more sophisticated advertisers who have not yet fully embraced any of the three leaders. With online video and social media still struggling to find the right formula for monetization, and big advertisers leaving the TV upfronts with their wallets still full of cash, the field is much more open than these storylines would have us believe. The point here is Yahoo, which has been stepping up its efforts lately in spite of the noise, needs now to accelerate these efforts if it's to keep its shareholders at bay for the next couple of quarters. A Google search deal, while good for headlines, is unlikely to be a stroke that changes the game. So don't fret that the race is over. We're still in the early heats, and there are bound to be more thrills and spills ahead as focus shifts back to integrating smaller, more tactical acquisitions and innovating new game-changing services. 02 May, 2008 11:31 AM EST
A Would-Be Media Titan Stumbles: Starbucks Retrenches Entertainment Business Unit
Posted By: Allen Weiner and Mike McGuire
The news that Starbucks is taking a step back and reassessing (here and here, the second link is to a WSJ story; subscription required) its efforts to link its coffee-selling "experience" with entertainment properties can be viewed as a cautionary tale about the limits of brand expansion in a world where digital media choices are limitless. But that is not to say that we think Starbucks should abandon its efforts at linking entertainment with its in-store "experience." In fact, we would argue the company needs to redouble its efforts but bring some serious focus to its role as a media intermediary.
Back in 2004, Starbucks, the global coffee brand, was making aggressive steps to leverage its customer base and its built-in Wi-Fi access. The company owned the music label, Hear Music (acquired in 1999), and started selling CDs (including the top-selling Ray Charles CD, "Genius Loves Company"). At the center of this foray into entertainment, reportedly a pet project of Starbucks Chairman Howard Schultz, was Ken Lombard, who joined the company after playing an instrumental role in helping build Magic Johnson's business empire. Lombard joined Starbucks in May 2004, and very quickly Starbucks' entertainment efforts began to take shape. With Lombard pushing things, Starbucks tested an in-store music CD-burning capability, forged a partnership with the William Morris Agency to find books and movie projects to promote, and created its own channel in iTunes to sell Hear Music artists. The company's underlying coffee business appeared to be the kind of cash machine that would support the aggressive development of a new type of media company. In fact, we cast Starbucks as an up-and-coming "media titan," because we saw the marrying of a huge network of stores with Wi-Fi access (3,100 stores in the U.S. had Wi-Fi as of October 2004) as an important audience aggregator of online consumers. Well, while Charles' album went on to garner multiple Grammys and sell nearly 800,000 copies, the movies Starbucks promoted didn't exactly light up ticket sales in theaters, and the music-related efforts seemed to suffer from a benign neglect that consigned CDs to just another retail display among dozens of coffee cups, commuter mugs and coffee makers. In conversations we had with Lombard in 2004 and 2005, it was clear he understood the potential business benefits of linking the store experience with music and other forms of content. However, he also underscored that the primary mission for the company was to keep people in the stores and buying. As long as the entertainment unit's media efforts were obvious and logical extensions of the Starbucks brand, and they kept people coming into the stores, he said the company would consider an array of possible media-related opportunities. Apparently, the success, or lack thereof, can be found in Lombard's resignation. Where do we think Starbucks' entertainment division took its eyes off the ball, or more accurately, swung at the wrong pitch? First, it has failed to extend and link the content business with the company's focus on making the stores a "third place" (besides home and work) to spend time. In many stores, the cafe section is often outfitted with stuffed chairs and tables with hard-backed chairs. Most stores provide free electricity for customers, and many stores also provide wireless Internet access (provided in American stores by AT&T, in Canadian stores by Bell Mobility, and by T-Mobile in the U.K.). While the store design achieves the physical requirements of being a third place, Starbucks couldn't add the media link. In particular, we believed (and still do) that local newspapers and news organizations could partner with Starbucks' network of stores, providing a hyperlocal news segment delivered to Starbucks customers logging on at any of the stores, for example. Given the state of U.S. newspapers, this would still seem to be a viable tactic. So, in May 2008, we have Starbucks reviewing its options in the entertainment space, while Chairman Schultz tries to maintain Starbucks' "experience." Despite having an impressive infrastructure of stores and Wi-Fi access, as well as a strong if somewhat buffeted brand, Starbucks remains more of an aspiring media titan than a true "player" in the industry. 24 April, 2008 02:38 PM EST
Yahoo Appears Determined to Produce TV
Posted By: Allen Weiner, Managing VP
In the wake of Yahoo's celebrated December 2006 dismissal of Lloyd Braun, then head of the company's media group, marking what most thought was the end of an effort to create original TV programming, it appears the Web search and portal giant has not lost the desire to be the next Fred Silverman. Two new "shows," "Prime Time in No Time" and "Good Morning Yahoo!" (GMY; which replaced "The 9") are fixtures on Yahoo these days, both created in the style of E's "The Soup," which mashes up short TV clips with comments from an on-screen host. As a side note, actor Greg Kinnear started off as the first host of "The Soup," but rest assured neither Yahoo host has the chops to go beyond Web-based TV.
Parsing Yahoo's TV/video strategy based on these programs leads us to believe: 1) Yahoo believes there is a business in being a content creator despite the plethora of high-quality small production companies bursting into the TV space (Next New Networks and Federated Media, to name two); and 2) advertisers are buying into this foray, with Verizon sponsoring "Prime Time" and Dunkin' Donuts paying the bills for "GMY." But that's where the clarity around Yahoo's TV strategy ends. Yahoo TV, the company's "starting point" for all things TV, includes "Prime Time" in its featured listings, but does not showcase "GMY." Based on the "URL," I think Yahoo considers that show "news," but even so, why not promote it everywhere possible? Even in 2.0 parlance, it is TV. All three major networks promote their morning shows on their Web sites despite the fact they all fall under the jurisdiction of their news departments. And speaking of "GMY," it seems that Yahoo Go, the company's major mobile "starting point," would be an ideal home for the show, providing it competitive differentiation from "regular TV" morning fare, but checking Go thoroughly, it was nowhere to be found. Being in the TV business is not for dabblers. There is a middle ground between being so deliberate (as some networks have been) that you appear late to the game and behind the curve and having a strategy that consists of just tossing out a show or two for the sake of being part of a trend. 22 April, 2008 06:01 PM EST
Does Google Have a Video Strategy?
Posted By: Allen Weiner, Managing VP
Google manifests its video efforts in two ways: 1) YouTube, the world's most popular video community, which allows folks the options to upload and view videos as well as use a host of Web 2.0 sharing and community features; and 2) Google Video, a vertical search page that crawls the Web and indexes video from both YouTube and the Web at large. Google Video recently changed its fit and finish to resemble more of an online TV viewing experience, while adding a few bells and whistles such as the ability to sort searches by most blogged or most shared. The changes are fairly subtle and leave Google followers wondering what the company's long-term vision for video will look like. Will it remain a dabbler or follow the big-picture path it took in advertising by acquiring DoubleClick?
Leaving aside the inherent issues surrounding Google's limited approach to video search (such as the lack of speech-to-text search capabilities), the current dual strategy in video is a neither-here-nor-there weakness, but it also could represent Google laying low with a large bombshell in the works. As Google continues to build out businesses that are "repeatable and scalable" (so says Eric Schmidt in the 1Q08 earnings call), the company's emerging cloud business could become a major high-bandwidth video network that offers content providers of all sorts the ability to upload, efficiently broadcast, track and monetize video content. In essence, the cloud would contain a series of video delivery applications and services, some built by Google, some built by third parties. On the surface, this next-gen video strategy might appear to replicate Google's current YouTube brand, which in many ways has been field-testing the viability of this cloud video network concept for the past few years. At some point, however, it would make sense for Google to create two cloud/network offerings: one dedicated to consumer creators (YouTube) and the other for professional creators, each with its own set of applications and liquidity options, not to mention copyright-screening and accounting needs. One ingredient to accelerate this strategy would be in Google's acquisition of an online video publishing platform provider (see "A Market Overview of Online Video Publishing Platform Providers") to enhance its cloud-based roster of such services as ingestion, transcoding and player customization. Alternatively, Google could stay neutral and just remain the "arms dealer" that provides content owners and application developers the network sandbox in which TV moves to a new level. 18 April, 2008 02:18 PM EST
Newspapers Claim Constitutional Right to Track Users, Target Ads
Posted By: Andrew Frank, Research VP
Here's a radical new twist (via The New York Times) in the privacy-vs.-online-ad-targeting controversy: The Newspaper Association of America (NAA) has filed testimony with the Federal Trade Commission (FTC) opposing the commission's recently proposed Online Behavioral Advertising Privacy Principles, claiming that its right to use behavioral-targeting platforms such as AOL's Tacoda and Revenue Science is protected by the First Amendment, as a form of "editorial judgment." Behavioral targeting (BT) relies on users' accumulated browsing history to select which ads they'll see, and it represents a significant source of increased revenue for online advertising, especially for non-category-specific news pages.
We know things are desperate in the newspaper industry, but this is a dangerous balancing act. The NAA could have simply crafted an argument from economic necessity, which is a major theme of the filing. But by claiming that privacy regulations are a form of unconstitutional censorship, the NAA appears to have adopted an antipopulist position on a tinderbox issue. A key stress point here is its attempt to draw a boundary between BT and deceptive advertising, claiming that "no connection between behavioral targeting and falsity or misleadingness (sic) has been demonstrated." This assertion is directly at odds with the position of most privacy advocate groups, for whom the lack of transparency inherent in most BT practices is on its face misleading, because most data collection contexts (that is, Web sites that collect visitor data for behavioral networks by hosting their third-party cookies) do not clearly disclose their tracking practices. The FTC has tried to strike a balance, promoting common-sense, self-regulatory principles of "clear, consumer-friendly, and prominent" disclosures and giving consumers "the ability to choose whether or not to have their information collected for such purpose." These principles are difficult to oppose, especially on constitutional grounds. It would behoove the NAA and its members to take a more nuanced position on this issue. More disclosure and consumer control will improve, not undermine, the efficacy and acceptability of BT. Moreover, online newspapers - especially local ones - have a profound and historic opportunity to forge closer and more profitable relationships with their readers by taking the lead on opt-in profiling and trust issues in general. Arguing that the First Amendment protects the right to obstruct transparency for the sake of higher ad rates is as counterproductive as it is counterintuitive. 15 April, 2008 12:12 PM EST
Take Down the Help Wanted Sign
Posted By: Allen Weiner, Managing VP
The annual census from the American Society of Newspaper Editors (ASNE) revealed some disappointing, yet expected, news about the current climate at American newspapers: The number of full-time professional staff members fell by 2,400 in 2007, a drop of 4.4% to a current total of 52,600. This does not even take into account the spate of layoffs in 2008 from two incumbent stalwarts, The New York Times and The Washington Post.
The fallout from the news has obvious implications about the state of the newspaper industry, but it leads to a number of issues worth pondering. Here are two: - Just to survive, newspapers will need to amp up their attention to the mantra of doing more with less. As such, will the net result be a greater reliance on citizen media in the form of bloggers or participatory media services such as NowPublic? Reliance on such sources raises IT issues, not to mention workflow, content credibility and brand issues, but those concerns will need to be addressed expediently just to keep the lights on. - Hiring at the online departments of newspapers was flat in 2007, according to the ASNE census. The myth that news operations can make up for decreased print revenue with a greater online presence is currently being shattered at publishing companies, as most have seen a plateau in Web traffic in recent months. This state of affairs suggests that more than a shift in strategy is in order. Mike McGuire and I will address some of the ways newspapers can address their future in a series of upcoming reports. Stay tuned. 15 April, 2008 12:09 PM EST
IAC/InterActiveCorp Has a New Angle on Search
Posted By: Andrew Frank, Research VP
A few weeks ago, I was treated to a sneak-peak preview of RushmoreDrive, IAC's new search engine for the black community. I was hosted by the site's creator, Johnny Taylor, whose enthusiasm for the project was rare even by startup standards. In the meeting, we coined the term "identity search" to describe what could be an important new idea for getting around Google's near monopoly on the consumer search category, which Barry Diller's Ask.com has been trying to do for some time without great success. The theory runs something like this: Everyone knows search results can be much more relevant if the search engine knows something about the user. Google makes use of such easily determined information as the approximate location of the searcher, but it has wisely avoided moving away from the anonymity of its query box, although Gmail and iGoogle (not to mention search history) could surely reveal more about a user if the user were inclined to opt in to personalized search. Google and its competitors have no doubt tested these concepts and discovered that the negatives of personalization outweigh the positives of increased relevance.
Identity search offers a compromise. Rather than opting in to personal profiling, users can go to a site that expresses something important about themselves — such as their membership in a broad ethnic community — to get more-meaningful results. Within that context, they can be even more specific and search for news or jobs. Although the concept is fairly simple, it recognizes the possibility that the growing online activities of ethnic groups may be reaching a critical mass, which justifies the hope that these sites might attract significant marketer attention, if they can be persuaded to switch search engines. Although there are many black online communities and Web sites, RushmoreDrive is not positioned to compete with them, and claims it will actually benefit these destinations by giving them more direct exposure to the black community, a claim that BlackPlanet.com appears to have bought into. For skeptics, there is plenty of room for doubt. Although Google may not use personal targeting on its search results, many ad networks offer various forms of demographic — including ethnic — targeting, and Google's acquisition of DoubleClick may pave the way for it to do more personal ad targeting in the future. The runway probably isn't very long for identity search to take off before the gap between ethnic destinations and incumbent search engines closes. But I believe there's a chance that RushmoreDrive might lead to more diversity in the search landscape. 09 April, 2008 01:13 PM EST
"All Our Representatives are Busy with the Merger. Please Stay on the Line."
Posted By: Allen Weiner and Andrew Frank
In the likely event the Microsoft-Yahoo merger proceeds to the next phase, the prospect of a drawn-out period of distraction and uncertainty looms for the customers, partners and employees of both organizations, as well as third-party developers. Both companies proceed with a business-as-usual parade of exciting new media products and acquisitions, including Yahoo's acquisition of Maven Networks, its social networking alliance with Google and MySpace, the rollout of its new integrated advertising platform (AMP), its acquisition of IndexTools analytics software, Microsoft's acquisition of Rapt, and significant enhancements to WMS and Silverlight, all of which raise specific integration questions. It becomes increasingly challenging for technology leaders - not to mention analysts - to overlook the two elephants in the room:
1.How will Microsoft and Yahoo continue to be responsive to their customers, and (in Yahoo's case) retain and attract key talent during an extended period of uncertainty? 2. Can anyone in this business afford to make major commitments to platforms and innovations whose future and timing of operational harmony are so cloudy? This condition would appear to be a gift to Google, whose integration efforts with DoubleClick got under way earlier this year, but still have a long way to go. It might also help AOL's Platform A, were its own future not so cloudy as well. However, it most helps more-focused vendors that are not, as yet, aligned with these larger players and can take on the significant challenge of simplifying things on behalf of their customers. It won't be rare for competitors to use the Microsoft-Yahoo integration issues as a marketing hook to raise FUD in the marketplace. Most online publishers and advertisers can't afford to wait for the dust to settle on large mergers before they implement cost-saving automation and optimization in the ad operations, or tap the growing market for online video, or form their own alliance pools of online ad inventory, or get some experience with mobile. Although the scale of traffic commanded by the largest sites will continue to be an irresistible magnet for high-volume ad dollars, that doesn't mean that publishers, agencies, ad networks and advertisers must adopt their platforms, especially when good third-party alternatives are out there. What advertisers and publishers most need to do is to continue to insist on support from Google and Microsoft for open media standards, so that ad inventory and content feeds remain neutrally accessible and don't become walled off in balkanized platforms being "Frankensteined" together in an escalating war zone. As good as those integration demos may look, don't ignore the smoke and drums in the background. 08 April, 2008 01:28 PM EST
Can Yahoo's AMP Drown Out the Noise?
Posted By: Andrew Frank, Research VP
Amidst signs of an imminent confrontation in the Microsoft-Yahoo acquisition story, Yahoo announced AMP, a new advertising management platform for advertisers, agencies, ad networks, and publishers that will provide a single interface to search, display, local, mobile, and video inventory. The platform leverages a number of Yahoo acquisitions and partnerships, including BlueLithium for targeting and ad service, Right Media for "transparent marketplace" access, and its Newspaper Consortium of over 600 newspapers. One of the principal claims of the platform is its ability to allow publishers to manage their own ad networks, which puts it into direct competition with Adify. The more-direct competitors, of course, are DoubleClick's DART products, AOL's Platform-A suite, and Microsoft's Advertiser and Publisher Solutions - for now.
AMP marketing makes some provocative claims about its advancement of the state-of-the-art in advertising management for publishers, which in particular overlook vendors such as Operative, Solbright, FatTail, and Fivia, which have been seeing significant uptake from online publishers looking to optimize and streamline their online ad operations. Even if the platform is a true breakthrough, however, it will be difficult for the marketplace to take this announcement outside of the context of Yahoo's efforts to either fend off or improve the terms of its impending acquisition. It does, however, finally answer a long-standing complaint about Yahoo's advertising offerings, which has been their lack of integration and synergy. This becomes clear in the idea of AMP, which offers a compelling story of how all of Yahoo's pieces can be brought together to bring value to different parts of the ecosystem. It's a shame the product couldn't have come to light a year ago. Still, for objective observers, this should increase Yahoo's value in any context. Will this lead to a happier outcome for Yahoo, its shareholders and its customers? We won't have to wait long to find out. 08 April, 2008 01:22 PM EST
Imeem Picking Up SNOCAP Assets: The Reverse Russian-Doll Strategy of Social Networks
Posted By: Michael McGuire, Research VP
Imeem announced this week that it was buying the assets of SNOCAP, the startup developed by Shawn Fanning, who gave the world the original Napster file-trading technology. Financial deals of imeem's acquisition were not disclosed, but Ali Aydar, an early engineering exec for SNOCAP and the original Napster, will be joining imeem as VP of operations. SNOCAP's digital registry was/is an important development in the evolution of online music. It's worth noting that SNOCAP's technology is the basis MyStores bands use to sell content directly on things like their MySpace pages. (iMeem will continue to support the MySpaces stores on MySpace.)
The announcement of the deal got me to thinking about something I posted back on March 3. Way back then, I noted the two major behavior models for online music: browse and buy. What I should have added, or more precisely what I should have called out explicitly, is that no one site can yet realistically argue that it can provide a rich browse and a complete buy capability. iTunes and Amazon are game-changing e-commerce (buy) sites for buying downloads. Last.FM and imeem have great search, discovery and recommendation tools (browse), yet provide links to users who want to purchase songs they run across while using those tools. Can a site that's defined itself as a social-media site become a strong online retailer of songs? Conversely, can iTunes or Amazon add compelling social-networking tools/capabilities to the iTunes store or Amazon store such that those destinations become as well known for the browsing experience as much as the buying experience? In terms of technology hurdles, either scenario shouldn't present too many serious challenges. What's more important is the question that would have to be asked before the "browse" sites or the "buy" sites add significant new platform capabilities: Should they? 04 April, 2008 05:27 PM EST
Online Music Update: MySpace Announces Plans for Online Music Service
Posted By: Michael McGuire, Research VP
MySpace confirmed it was going to launch an online music service at some point in the coming months, according to this news story and this news story. In short, MySpace is going to attempt to leverage the millions and millions of visitors, and the millions of bands with pages, into a revenue-generating online music service.
At some yet-to-be-announced date in the future, the service will have a download component for a la carte purchases of DRM-free songs (according to the press release), an ad-supported streaming service and tie-ins to a mobile storefront (delivered via Jamba, a News Corp. corporate sibling of MySpace). Apparently, sales to concert tickets will also be available. MySpace users will be able to create a personalized music experience on their pages, according to the MySpace press release. All of this is very well and good. At least three of the major labels - Universal, Sony BMG and Warner Music - are officially "in" on the deal. EMI, an early proponent of dumping DRM and, to some degree, the first of the majors to grasp the importance of the online transition (based on comments it has made during quarterly financial results calls over the years), has yet to sign on. That's probably just a timing issue, nothing more. The power of MySpace's 100+ million visitors is undeniable. So, on paper, this makes a great deal of sense. And even if it doesn't really work out in terms of business, it's going to be an important learning experience for all involved. Here's what I find particularly interesting, despite the dearth of details: - This story and the News.com story (the first link in this post) indicate that this yet-unnamed service will be a MySpace spinoff and that the labels will get an equity stake in the service. Given the competition for artists and their spotty history of cooperation (Pressplay was originally an online subscription service joint venture between Universal and Sony Music that carried content from BMG, Warner and EMI, and was eventually sold to Roxio, which turned it into the "legal" Napster music service), one wonders whether the scale and reach of MySpace's audience will be enough to keep the project on track. - Where are all the independent labels? - What happens to the efforts to let bands sell directly from their pages based on a digital registry provided by SNOCAP with a transaction platform MySpace developed? MySpace certainly has the scale and sheer audience size to make its planned service a potentially serious competitor to iTunes (now officially, according to an Apple press release issued today, the largest retailer of music in the U.S.). Yet, sites like imeem and Last.FM have created pretty compelling social-networked experiences centered on music. Can a one-stop shop really top them all? No, probably not. Then again, the essential value of MySpace's future offering is that it's going to be a legal alternative that, if done properly, creates an easy way for the MySpace crowd to pay for music, either through their time and attention (advertising) or directly via payments. My guess is music-related transactions - that actually generate revenue - are going to remain a sideshow to everything else going on at MySpace. 03 April, 2008 11:56 AM EST
Ad Researchers Highlight Job Security in Challenging Times
Posted By: Andrew Frank, Research VP
As I write this, the annual ARF "re:Think" conference is under way in New York City, and, despite an unfortunate scheduling conflict with a well-attended IAB Marketplace conference on Monday, it's drawn a large and enthusiastic crowd.
Changes are afoot at the ARF, most notably the departure of its chief research officer, Joe Plummer, who will be replaced by Joel Rubinson of the Aegis Group's Synovate unit (here's an interview with him). The change coincides with a notable shift in the group's engagement with "engagement" and its ambitious efforts to develop new cross-channel metrics based on the concept. (Note that, as good researchers, we do not infer causality from correlation.) The word "engagement" now appears to have gone from vanguard to punch line in two short years, and even those who attempted to earnestly highlight the concept in comments and presentations couldn't miss the snickers in the audience. (Let's not throw the baby out with the bathwater though: The word may be tired, but the idea that metrics need to get beyond raw impression data and closer to effectiveness remains solid.) The maxim "under stress we regress" would seem to apply to this year's conference, where more traditional brand equity measures (albeit using new methodologies) were back in vogue. None other than Google set this theme in motion with Harris Interactive when they created major buzz with a study finding that 30-second commercials for consumer packaged goods (CPG) were as effective online as they were on TV. This was not just a reversal of much of the "accepted wisdom" that 30-second spots don't work in online video, but also a reinforcement of the view that the next big wave of online media spending is going to come from traditional brand marketers - especially CPG - shifting budgets online. Although they may still need some convincing, this assertion was also made by Digitas Chairman and CEO David Kenny in his keynote presentation. Alan Wurtzel, NBC's president of research and media development, delivered an inspiring keynote that first ridiculed the buzzword-laden new media pitches of an increasingly desperate mainstream media establishment, then offered a range of studies suggesting that, overall, technology - even consumer multitasking and DVR ad-skipping - has not killed traditional advertising methods. To make this point, he showed eye-tracking charts and invoked one of the more controversial themes of advertising research: the idea that, even if there's no actual conscious absorption of an advertising message, "preconscious" messaging occurs and is important. This set the stage for this year's wave of new "neuromarketing" techniques, featuring better, faster, and cheaper biometric technology and methodology (see Stuart Elliott's recent NY Times coverage). Whatever one's view of these developments, Wurtzel offered a compelling take-away: The complexity of media disruption means better-than-average job security for media research professionals. Others in the media business may be a bit more worried. 02 April, 2008 11:24 AM EST
The Power of Link Journalism
Posted By: Allen Weiner, Managing VP
The concept of link journalism is fairly basic in premise, but is both powerful and precarious in implementation. Simply stated, it is the use of a link to a selected piece of content (text, video, audio, image) to add context to an original composition. Publishers have varying policies on link journalism as well as varied views on the impact to their brands. The concept of giving away Web traffic or adding credibility to a source that's not part of your brand is perhaps viewed by some digital immigrants as counterintuitive.
The practice of link journalism manifests in two ways: Links can be the major content focus of a story or blog post, as in "here are the top links of the day" as they relate to a topic or issue. This is an expansion of a traditional "newspaper column," which is often made up of musings, anecdotes and condensed (and sometimes rewritten) press releases. Links can also be used in the course of a news story or feature as a substitute for an outside source as well as to provide greater depth to a topic. While there are no best practices in this area, it's safe to say that any reporter looking to remain employed will thoroughly check the source behind the link to ensure it's accurate. This really is no different from the time-honored (read: pre-Digital Age) practice of verifying sources for a news or feature story. For most old-school editors, vetting a source was not a best practice - it was the only practice. I can only imagine some of the editors I worked for dealing with today's instant journalism, which emphasizes speed over accuracy. (This is part of MSM's problem: Bloggers don't get whacked for inaccuracy - MSM does.) In addition to reliability over linked sources, there's also the issue of dead links. Without some sort of dynamic pinging method, link journalism runs the risk of ticking off readers by sending them to the online graveyard where pages are not found. This also underscores the issue that the technology behind most link journalism is fairly ad hoc, using primarily DIY tools found in blogging platforms or word processors. A few vendors in alpha testing stage are tackling this issue as a snap-on to the newsroom workflow process. Technology and best practices aside, if link journalism is to thrive, news organizations will need to take a more holistic view of the news experience. If a reporter or editor uses his or her expertise to provide readers with the means to get additional insight into a topic, it only serves to increase loyalty and strengthen a brand. The narrow "not invented here" approach will be the calling card of those news organizations who wonder why they are deemed irrelevant. 02 April, 2008 11:08 AM EST
Twitter Me This
Posted By: Allen Weiner, Managing VP
For those of you who have the sense to ignore a lot of the Web 2.0 hysteria, Twitter is a semi-phenomenon that is a human GPS service that allows ordinary people to share their "current location" or "what they’re doing" with the world. Twitter, (which according to some estimates has in excess of 800,000 users) is a multi platform deal in that you inform your followers by typing message via Web or mobile phone or IM or…and receive alerts (Tweets) the same way. At this moment, I have 25 people who seem intent on knowing which baseball game I am at or what I have to say about my working day. By the same token, I am following 18 people, many of whom arent really people - but that's where the story gets interesting.
For example, the UK Prime Minster's Office at 21 Downing Street began using Twitter as a low-cost, populist way to deliver messages of some societal significance. A recent Tweet had a link to a YouTube video that showed a new national bus pass scheme for pensioners and people with disabilities. A number of the socialcasting sites, such as Blog TV and Yahoo Live, use Twitter to tell you what programs are just starting, with embedded links allowing you to immediately tune in. This is not limited to Web 2.0 TV providers; according to the Wall Street Journal, the major TV networks are experimenting with Twitter. Newspapers, on the other hand, are mixed on using Twitter. Some see it as a valuable means to connect with readers by offering updates to breaking stories, and one German newspaper reporter encourages his followers to send him questions they would like answered when he interviews leading political figures. Twitter is not alone for long. There are countless knockoffs and Yahoo! is testing Fire Eagle, a similar service that works in conjunction with all those people you have in your email and IM list. The carriers are also looking at this, with Verizon cutting a deal with Loopt, a social-mapping firm whose service uses GPS to allow friends to find friends via their mobile phone (for $3.99 a month, that is). There's little doubt that geolocation is hugely sensible as it relates to adding context to content and even providing baffled drivers with the ability to get from here to there. Twitter and the like seem to me to be nibbling at the edges of absurdity and intrusiveness. My biggest issue is that these consumer generated GPS services force us to operate in interrupt mode as if the latest Tweet making its way to my email, IM client or mobile phone is more important than what I am doing now. With so much media grabbing at small strands of our daily lives, I think being bombarded with atomized messages will eventually lead to consumer backlash and consumer media meltdown. Maybe it's the digital immigrant in me speaking, but if I really cared that a fellow Twitter thought about his daily commuter, I'd ask. Or, as my digital native daughter says, that's just TMI. 31 March, 2008 03:56 PM EST
Digital TV Enters the Home Stretch in the U.K., But Is It Really the Last Lap?
Posted By: Adam Daum, Research VP
From the time digital terrestrial TV (DTT) was launched in the U.K. in October 1998, it took two years before the first million set-top boxes had been shipped. How times change. The latest figures show that over 4 million units of DTT equipment were sold in the last quarter of 2007 alone.
So, the equipment is finally flying off the shelves, even if the game's not quite over yet. It turns out that 94% of those 4 million units went into households that already had digital TV, and only 6% went to net new DTT-only households. Digital TV penetration has reached about 87% of households, which is a great achievement, but that last 13% could still be a challenge. Still, no one really doubts that the analog signal will be switched off on schedule in 2012, without riots in the streets. So it's game over, right? The regulator can auction off the freed-up spectrum, the government can bank the cash, and consumers can relax in front of an increased choice of free-to-air reality TV shows. Everyone's happy. Well, not quite. Millions of consumers have acquired shiny new HD-ready TV sets; but even after analog switch-off, there will be a pretty thin lineup of free-to-air HD channels available. And the regulator's position is that the post-analog-switch-off spectrum auction will only deliver either a meager selection of HDTV channels or a meager selection of mobile TV channels, but not both. Let the market decide! Meanwhile … a new report argues that the regulator's spectrum plan is somewhat suboptimal, and that if we would all just migrate to a combination of national single-frequency networks, plus equipment based on DVB-T2 (rather than the current DVB-T), and MPEG-4 (rather than the current MPEG-2), then the increased spectrum efficiency would deliver a world of wall-to-wall free-to-air HDTV, with plenty of spectrum left over for mobile TV. We just have to replace all that old-fashioned DTT equipment we just bought. A minor inconvenience, I'm sure you'll agree. It may start slowly, in 2012, but another 10 years and the new boxes will be flying off the shelves. Way to go! Except that … the TV 2.0 industry tells us that kids are so busy on YouTube and MySpace (or possibly MySpaceTV) that they just don't watch broadcast TV any more. So, is it really credible that today's kids will be buying integrated DVB-T2-MPEG-4 HDTVs at the rate of 4 million a quarter in 2022? As a professional skeptic, my answer would have to be: "only if those devices also have broadband connectivity, so that they can access both broadcast and Internet-based networks." Messy as it sounds, the future may well be hybrid. 31 March, 2008 12:30 PM EST
Warner Music Looks to ISP Levies to Fund Music Business
Posted By: Michael McGuire, Research VP
A veritable explosion in big-music's willingness to experiment with new business models seems to be the hallmark of the first half of 2008. In this story, we see that Warner Music is hiring an exec to spearhead the development of a system for delivering music online that would be monetized by a levy charged by consumer ISPs. (Disclosure: I know Jim Griffin and have appeared with him on various music-industry panels.)
Many of the details of this plan are sketchy, but Griffin has long advocated collective blanket licenses as a way to, as he puts it in the story, "… monetize the anarchy of the Internet." As noted in the story, critics of the idea will argue that it's an unfair tax being levied against every ISP user - even those who don't download music - that is being collected to benefit a single industry. Other objections raised to these types of plans, not this specific one, include how the usage and consumption of content will be counted: the challenges associated with how artists are remunerated - popularity based on consumer consumption or a flat rate. Keep one thing in mind while watching this one evolve: It's only one of many possible business models. At this point in the music industry's evolutionary arc, the more experiments like this there are, the better off the industry will be. 26 March, 2008 06:50 PM EST
Mapping the News
Posted By: Allen Weiner, Managing VP
In an effort to add context to content, a number of news organizations have taken to adding mapping to create a level of differentiation, as well as provide consumers the ability to search and find news based on geography. For example, a newspaper can embed news into an interactive map, allowing its readers to focus on news that's happening in their neighborhood, if that's what interests them.
There are several ways to go about this, with a new platform and service from MetaCarta called GeoSearch News being one of the more robust offerings that a news organization can deploy. The Massachusetts-based company showcases the possibilities by indexing an extensive collection of more than 1,400 national, international and local news sources every hour in addition to direct feeds from The Associated Press and Reuters. What separates MetaCarta's service is that it combines crisp data visualization with the ability to search by topic and location (not yet by ZIP code, however), allowing fairly deep personalization. MetaCarta, which has a number of news organizations as clients, is facing a business model challenge. The company is undecided whether it should just sell the service to individual content providers or continue to add value (in the form of additional news sources and content forms such as video) to its own version and productize it as a branded destination. History suggests that competing with your customers can be a slippery slope that provides others in the market with a solid talk track in head-to-head sales situations. For the most part, newspapers have taken mapping into their own hands, using hacks of Google's or Yahoo's maps to create experimental interactive experiences. These mapping applications are almost always created by editorial teams rather than IT departments, as newspapers now generally have a policy that states that simply adding code to a Web page does not require IT approval. Bakersfield.com, the online product of The Bakersfield Californian, has a pothole map that allows folks to e-mail the most annoying pothole in their neighborhood. The results are plotted on a Google map (easily done through a simple script), which even allow additional comments such as reporting when the city fixes these nasty buggers. One of the best pure news maps comes from the Salt Lake Tribune's tribtowns.com, which plots news stories by category on a Yahoo map. The site does not have a search feature but has a crisp interface in which a story pops up when mousing over the map. For their part, search providers view adding context and geolocated content to maps as fairly important. Yahoo's NewsGlobe and a recent effort from Microsoft to combine Virtual Earth with SQL Server 2008 are just two examples that show promise. By using location-based metadata offered by YouTube creators, Google plots videos on Google Earth. With all this activity from vendors/service providers as well as publishers, you can sense that the geolocation wave as part of the Web 2.0 movement is clearly taking hold. 26 March, 2008 05:08 PM EST
In an Era of Unbridled Innovation, We Go Back to the Past?
Posted By: Michael McGuire, Research VP
Perhaps it's the congestion I'm suffering from, but I'm having a hard time understanding the consumer value proposition for this alleged plan by label Sony BMG. Now that I think about it, the headline for this entry is wrong. I don't think this idea was ever even seriously considered by the labels, was it? If it was, it was discarded quickly, and rightfully so.
In the story, a Sony executive offers the consumer the value prop of paying $9-$12/month to access ... the Sony BMG catalog. Perhaps I'm just overly sensitive, but the wording of the story is interesting in that it states that Sony's "digital catalog" would be available. For anybody who has paid attention to the online music market, this could be important. Licensing regimes being what they are, all the songs in iTunes or available on Rhapsody's music subscription service do not represent the entirety of the world's recorded music. Rather, they represent, more or less, what the labels have cleared to sell via download or accessed via online subscription systems. Honestly, I'm trying to locate any information, any tidbit anywhere, indicating that consumers would prefer to look for their music label by label. Does anybody really even know which labels their favorite artists, or even those not-so-favorite-but-like-one-or-two-of-their-songs artists, work for? I very seriously doubt it. One could argue that the power of search ameliorates the issue of having a by-label service, but the online payment requirement most certainly does work against this idea. How many different accounts will a consumer be expected to have on one credit card? Look, I understand the labels are struggling and are concerned about having Apple control so much of the online music market. And the subscription offerings, while solid businesses, aren't generating consumers like a la carte download services. The great mobile subscription offerings, such as Comes With Music (Nokia's offering in which consumers who sign up for the first year can keep all the music they can download, allegedly, forever), are not scheduled to launch until later in 2008. But honestly, this is like the giants of fast-moving consumer goods deciding it would be better to sell their products through stores that carry exclusively Procter & Gamble, Unilever, Kraft or General Mills brands. Really, does April Fools' Day fall on 24 March (the day the original article ran in the Frankfurt publication) in Germany? |
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