Wednesday, June 6, 2007

THE RIGHT AND WRONG LESSONS FROM MOBILE (Steve)
There are a few stories in the news this week about mobile phones and content. The stories can back up any opinion you have. If you think mobile content is a dead-end, you can find stories that support that. If you think mobile content is going to take off, there are stories for that, too. For those looking between the lines, there are good clues about the future.

NEWS ITEM ONE: Amp'd Mobile files Chapter 11.

Amp'd Mobile logoAmp'd Mobile filed for bankruptcy protection this week. It owes about $100 million, and put the absolute cheekiest spin on Chapter 11 you've ever heard. The company's press release said they've gone bankrupt, and here's why: "(because of) rapid growth, our back-end infrastructure was unable to keep up with customer demand."

Have you ever heard of better spin than this? "We were so successful, we went under." They have 200,000 subscribers, and you can trust me when I say that's not a model that would crush a mobile phone company.

Amp'd provides a ton of content for its subscribers. And the content is terrific - you can get stuff from MTV, Comedy Central, Adult Swim, ESPN, Maxim, CMT... a content aggregator's delight. They position Amp'd for young adults, and they have nailed it with the phones and with the content.

So why the flop?

Amp'd Mobile is a Mobile Virtual Network Operator (MVNO), which means it leases its "lines" from other networks like Verizon Wireless, AT&T, etc. So they don't have the name recognition the big companies have. Strike one. A lot of young adults are on family plans, and Mom and Dad aren't going to have Amp'd as the base for their plan. Strike two. And even ESPN tried its hand at the MVNO game. If anyone can make a go of it with specialized content, it's ESPN. It struck out. And that's a strike three for Amp'd, too.

All that tech-speak is my way of saying this: Don't think that Amp'd flopping means there's no demand for online video and audio content. The business behind the content is flawed; the content is very much in demand.

NEWS ITEM TWO: Apple's iPhone starts advertising for real

iPhone logoIf it's possible, the Apple iPhone looks even cooler in ads than it did when Steve Jobs did the demo for it. The iPhone is coming out at the end of June, and it will be a hit. It's already a hit, if what we've heard about pre-orders is even half-true. So what's to misunderstand about this mega success in the making?

A strategic decision Apple made means the iPhone will not be the next iPod.

Oh, it's going to be a hit. But because of the bizarre way the cellphone industry works, Apple made a deal with AT&T (the former Cingular as you no doubt have memorized from the overkill ads by now) to be exclusive to their network. This exclusivity deal is good for five years. So, by definition, the iPhone can't become ubiquitous.

They lost me as a result. I'm a Verizon Wireless guy, and I would have bought the iPhone. Who knows how many other Mac addicts would have done the same?

NEWS ITEM THREE: Mobile broadcast TV subscribers worldwide will hit 155 million in 2012

eMarketer has details of a study done by Datamonitor on the trends in mobile broadcast TV subscriptions. Right now there are 4.4 million people worldwide paying for access to broadcast TV on their mobile phones. The study predicts that the number will jump to 155 million in the next five years, with North America accounting for 35 million of those subscribers. Worldwide revenues would be about $7.7 billion with that customer base.

The wrong lesson? There still aren't enough people interested in paying to watch video on their small-screen phone. The right lesson? Watch the trend. It's moving in the upward direction toward adoption. Be ready for the small screen. Within five years, more than $1 billion will be on the table for broadcasters in North America from the mobile space.

Will you be ready to get some of it?    <Permalink>

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WHY GOOGLE BUYING FEEDBURNER IS SUCH A BIG DEAL (Terry)
You know Google, but have you ever heard of Feedburner? Chances are you haven't, but that's only because you don't regularly play in the world of blogs, widgets and RSS.

A quick review: RSS (Really Rimple Syndication) is a technology that moves unbundled content around the web. By unbundled, we mean content separated from form. While a lot of people don't understand the term or how it works, they're using it every time they customize their iGoogle or myYahoo page or those with similar options. RSS feeds are a mandatory Media 2.0 tactic for every media company.

Feedburner captures RSS feeds and redistributes them for many publishers. The reasons are reliable statistics, uniformity and an ability to monetize RSS feeds, which Feedburner does rather well. In purchasing the company, Google now owns a solid platform already packed with very high quality RSS feeds from highly diverse sites -- everything from USAToday and Reuters to Lost Remote and my own blog.

RSS advertising is a big downstream business, and there's evidence that people interact with these types of ads in a way that is very beneficial to the advertiser. Click-through rates are significantly higher for ads in RSS feeds, because they aren't disruptive or annoying. They actually resonate with people predisposed to their content, and those people are more inclined to take action.

Michael Arrington at Techcrunch believes Google will include its popular Adwords program into Feedburner's RSS feeds, which will make for a nice contextual mix. "Feedburner already sells adds into feeds on a CPM basis," he wrote. "Google’s going to crank this up."

This is a space very misunderstood by, frankly, most mainstream web publishers, because we've been lulled asleep by the ka-ching of page views, impressions and other mass marketing ad models. Everything is fragmented these days, and people are increasingly wanting the ability to arrange their own fragments. RSS enables that and a whole industry of elaborate, customizable RSS readers has sprung up. Have you seen Netvibes lately? Oh my goodness!

Netvibes Weather WidgetNetvibes and other customizable pages, including USAToday's live off of RSS feeds imported through widgets, little box-like applications that are popping up by the hundreds almost daily. Google even offers a way that you can make your own widgets. Netvibes offers over 900 widgets of information that can be imported into their customizable pages.

Many widgets are built using AJAX, a contemporary programming language that allows these applications to sit atop html pages instead of being embedded therein. Single handedly, AJAX has brought down the page view as an advertising metric, because the content changes that take place inside the widgets aren't recorded as page views.

According to a Reuters article this week, the music industry has been forced into exploring the widget world, because the demand is high. Not all is well in musicland's widget world, however.

While the number of widgets in use is estimated in the hundreds of millions, Internet tracking sites like ComScore and Nielsen NetRatings are not yet monitoring them. Additionally, the business model for them remains unclear. Outside of music licensing fees, widgets by themselves are largely free.
The creation of widgets is high on the list of things we recommend for our clients, because unbundled content is THE way to extend our reach in the new media world. It's a 1.0 play, but a necessary one, because you'll notice that the weather widget pictured above is from the Weather Channel, not a local media company in the D.C. area. We're way behind-the-times here, and we can't afford for that to continue.

It's no longer about putting our content on our pages; it's all about putting our content on other people's pages.

And since RSS is the primary way these things are "filled," Google's purchase of Feedburner puts them in yet another advertising driver's seat.    <Permalink>

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INTERNET PUREPLAYS CONTINUE TO GROW LOCAL INFORMATION STRATEGIES (Terry)
Hearst-Argyle's deal with YouTube is a smart unbundled strategy, but one that completely validates YouTube's place as the leading address for web video (they serve 60% of all videos on the web). That's good news and bad news for the companies, like H-A, who choose to do business there.

The good news, of course, is that YouTube functions a lot like spectrum in the real world. The difference being the spectrum here is free -- anybody can launch a channel -- but not everyone can sell advertising. So H-A has essentially obtained a license from YouTube to play in their spectrum. Broadcasters everywhere should understand this metaphor.

"People go to YouTube for video--period," said Kevin Heisler, an analyst with Jupiter Research told Online Media Daily. "It's become this giant aggregator of all things video, not just a comedy site, or news site, or a video blog site."

The deal comes at a time when TV programmers are waking up to the power of online video syndication--a trail being blazed by CBS, which recently established a broad Internet distribution platform for its programming through deals with 10 major companies, including AOL, Joost, Comcast, MSN, and Brightcove. "The big choice [media companies] are making is video syndication," said Heisler. "They're finding that this is the most effective way to get their content seen." Local TV stations have been particularly slow to take advantage of the recent surge in online ad dollars--taking in a mere $32 million in online video ad revenue last year, according to Borrell Associates. By contrast, newspapers made $81 million on the sale of video ads online last year.
We've long advocated that stations create YouTube channels (see Steve's entry below), but Hearst-Argyle has taken it a step further.

The bad news, of course, is that these deals put YouTube (Google) directly into the local ad business by creating channels that will most likely be viewed by local users. It's the same dynamic at work in the newspaper consortium with Yahoo and CNN's new deal with local stations. With half of local online ad money already going outside our markets, this is problematic for anybody in the local media business.

An interesting side note to this story is that YouTube's pre-roll ads will likely be in the 3-5 second range. I think it's likely we'll see a combination pre-roll teaser and post-roll ad. In terms of generating response for the advertiser (the golden egg of internet advertising), post-roll ads will likely be much more effective than disruptive pre-rolls. This is hard for us to believe, because broadcasters make a living in the world of commercial "interruptions."

Remember, the web is not TV.    <Permalink>

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EMBRACING YOUTUBE: WHY IT HAS ALWAYS BEEN THE RIGHT THING TO DO (Steve)
We have long espoused stations partnering with YouTube.And we have long heard the concerns - that it means giving up control of station video, that it allows anyone to embed it on their site, that it means people will not go to the "official station site" to watch the video and, worst of all, there won't be instant money associated with it.

And Terry and I have always advocated putting local news video on YouTube anyway.

YouTube is the single best mechanism ever for the sharing of online video and for the marketing of local television. You couldn't possibly develop a better scheme: a station's most devoted audience decides which stories it likes the most and shares them. There is no promo a TV station can put out that is as valuable as word-of-mouth marketing.

When locals come to AR&D asking "What should we do about YouTube," our answer has always been "embrace it." You partner with YouTube and every video sharing service out there. If there isn't an ad dollar associated with it, there is certainly great marketing value.

As Terry notes above, Hearst-Argyle announced a deal with YouTube and five of its stations. There are now YouTube "channels" for each of those stations.

WCVB-TV's YouTube ChannelGo to the WCVB channel on YouTube and check it out. Easy to use layout. About 30 videos at the time of this writing. The "lead" is a video about a bear wandering in the city. A conventional news lead? No. A good viral video and good ad for WCVB? Absolutely. The stations are taking advantage of the relaxed atmosphere of YouTube and are even putting up blooper reels. And why not? What better way to show news people are people?

Soft news isn't the only video that draws eyeballs here. The "most favorited" video is an investigative piece about a sex offender working for Home Depot. Stories about discrimination, health, and an interview with Nancy Pelosi are among the most viewed.

This is an excellent idea, and it's about time.

For a no-no, check out KCRA on YouTube for example. KCRA has made an odd choice: they have disabled comments on several stories. That has to change; part of the joy of YouTube is the community that comments on the videos. Disabling comments sends a message that the station "doesn't want to hear" from its viewers.

I predict KCRA will change its mind.    <Permalink>

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THE WEB MOVES AT LIGHT SPEED (Terry)
Foxnews.com front pageOn a personal note, I had an adventure in the power of the web this week. It's a long story, but it involved a purchase I made at a CompUSA store that included a Canon A630 camera box without the camera. I followed all the proper channels in trying to get the issue resolved, and when it wasn't, I wrote about it on my blog and posted the story Saturday.

Monday night, I got a call from CompUSA. They called again Tuesday and are sending a gift certificate for the camera. I've posted that, too.

But the real story is how this happy ending came about and what it says about public relations and marketing in the new age. Others picked up the story, and it spread like wildfire across the web. The thing is that CompUSA sells to the tech-savvy blogging crowd, so a story like this has legs from the beginning. CNetTV did a story on Monday. Foxnews.com did one on Tuesday. The story made the front pages of Digg and Boing-Boing, sites with incredible reach. Hundreds, if not thousands of bloggers wrote of the story.

The linking mechanisms of the web took over, and as of this morning, the story ranks 5th and 8th of the first ten search results on Google for "CompUSA." The CompUSA Wikipedia page has even been updated with the story. This is a nightmarish PR scenario for anybody, and it happened so fast that there was nothing anybody could have done to stop it.

And all I did was post a blog entry about my disappointment.

The point is that the personal media revolution is turning much more than media upside-down; it's impacting culture in ways we're only just beginning to understand, and it is not something to be ignored. It operates 24/7 and at light speed, and broadcasters need to recognize this as a part of media life in 2007.

One of the phone calls I got was from a consumer reporter in Salt Lake City who had done a story on this same subject a few months ago. How ironic, I thought, that the web now gives individuals the same clout that consumer reporters from local stations have enjoyed for decades.    <Permalink>