WEDNESDAY, NOVEMBER 21, 2007

LETTING COMMUNITY MEMBERS SHOW OFF IS SMART STRATEGY (Terry)
J. D. LasicaA Business Week story this week interprets a trend and misses the point regarding the nebulous world of "user-generated content." First, let's repeat that the term "user-generated content" is a pejorative description of a fundamental driver of what J. D. Lasica terms "the personal media revolution," and what Glenn Reynolds calls, "the triumph of personal technology over mass technology. This is the core of the disruption of the traditional media business, and it's fueled by pureplay web companies who profit from its encouragement. It's disruptive in many ways, but most importantly because it's a new way for people to inform each other.

It's a put-down term, because it's used to separate professional from amateur, and this is why we end up with the kind of thinking behind the snarky Business Week story, "Web Video: Move Over, Amateurs."

One after another, online video sites that have long showcased such fare as skateboarding dogs and beer-drenched parties are scaling back their focus on user-generated clips, often in favor of professionally produced programming. "People would rather watch content that has production value than watch their neighbors in the garage," says Matt Sanchez, co-founder and chief executive of VideoEgg, a company that provides Web video tools, ads, and advertising features for online video providers and Web application developers.

Writer Catherine Holahan says, "Amateur filmmakers hoping to win fame for amusing moments captured on camcorder ought to stick to TV's long-running America's Funniest Home Videos." Nice. The article notes the explosion of professionally-produced web offerings this year and concludes that "to stay relevant, non-pros will have to step up the quality."

The problem with this view of online video is that it only considers traditional video viewing and values. From that perspective, it's hard to argue with the conclusions. From that perspective, "user-generated content" IS amateurish and belongs on "America's Funniest." From that perspective, trying to work it into a traditional business model isn't worth the time and resources. From that perspective, why would advertisers want to support it?

Unfortunately, the perspective completely misses the real value to people of shooting and posting their own pictures and videos — their desire to share "their" work/hobbies with their friends. It's not, nor will it ever be, a traditional media play. This is the foundational value of YouTube, not, as the article would argue, the desire of people to win fame (in the traditional sense). Traditional media companies will often write about the YouTube exceptions, those who do reach "fame" status, because that's what we understand.

Steve and I feel strongly that local media companies should be in the user-generated content business and not give up on it. But our involvement needs to be supportive and built around events and communities of interest, because that's where it has real value. We also feel that it's our responsibility to help raise the quality level of the amateur video work being done in the community, but that's another article.

The people formerly known as the audience are not our enemy.   <Link>

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GOSSIP GIRL: THE MOST- AND LEAST-POPULAR NEW TV SHOW (Steve)
Gossip GirlWhen is a bottom-rated show a hit?

When it's The CW's "Gossip Girl," the teen drama about young New York City socialites.

Our friend Rex Sorgatz noticed that the show does very well on iTunes - at this writing one of its episodes is the sixth-most downloaded TV show there. In fact, episodes of "Gossip Girl" account for six of the top 25 most downloaded iTunes TV shows. That's more top-25 episodes than any other TV show right now. Clearly, "Gossip Girls" is a hit.

Except that it's not even in the top 100 in the TV ratings.

Welcome to distributed media, where everything we used to know about numbers has changed.

What you have here is the perfect show for a young audience. It's about glamorous, rich young kids. It's about a blog. It has, sex, drugs, money and, well, gossip. It is the most-watched new show among young adults. Hence, it's nearly made to fail by traditional metrics.

"Gossip Girl" sits at about #105 in the ratings, pulling in about 2.5 million viewers and not coming close to holding its lead-in from "America's Next Top Model." So that's lousy, right?

Well, maybe not. As Entertainment Weekly notes, "Gossip Girl is redefining what it means to be a TV hit... slumming at the bottom of the ratings chart isn't so bad if you're the only show kids are talking about." Where are they talking? Online. You'll find the chatter at fan sites like Gossip Girl Online, and on MySpace and Facebook pages.

You start with that audience of 2.3 million show-obsessed young people. TV Week notes that "Gossip Girl" picks up another 20 percent of adults 18-34 when you count DVR data. Then you add in the iTunes paid audience. Maybe this show makes some money after all.

Here's what "Gossip Girl" doesn't do: it doesn't give local affiliates much of a lead-in. But that is something we have to get used to. When people use a DVR, there are no lead-ins. When you download a show, there are no lead-ins. For websites, there are no lead-ins. So after a while, the whole concept of a lead-in just .... goes... away. Local news truly has to stand on its on merits now.

Full credit to The CW for giving "Gossip Girl" a full-season renewal. (Short though that season may be because of the writers' strike.) Sure, The CW is a new network and its shows aren't chart-beaters. But they do seem to understand that reaching the youth market isn't about getting the all kids in the same place at the same time.    <Link>

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LEARNING MEDIA 2.0: CONTENT IS NOT KING (Terry)
In the world of mass marketing, those who can pull together the biggest audience over the shortest period of time win. This is the dream of what we call Media 1.0, the goal of traditional advertising. From a media perspective, this is created when the content we produce is so compelling that consumers will gather around it, thus creating the mass of mass marketing. This is our core competency as local media companies.

So our content is what makes it work. Better, more compelling content equals a bigger reach, and so it goes.

It's understandable, therefore, that in moving our content to the Web, we would assume that the same fundamentals apply. This is why we find that most media company online strategies are built on the creation of page views, and it's why we're beginning to see a flattening of online revenue growth in the media sector. Given the math, it's simply impossible to create enough content in a page view model to satisfy budget demands. It is impossible.

Let's say a TV newscast reaches 100,000 viewers over a half-hour period. Just to keep it simple, let's further assume that the station sells ten minutes of premium advertising in that half hour at $100 a pop. Gross revenue is $1,000 for the half hour. The newscast contained ten items that are moved to the Web as individual pieces of content. What would it take to achieve the same revenue online as via the broadcast?

Let's again give the station the benefit of the doubt and say that they are able to serve two ads per page view for that content, whether video pre-rolls or display ads. Let's assume they sell ads at a very high average of $10 per thousand impressions. So one piece of content is potentially worth 2-cents every time somebody clicks on the page.

In that scenario, a single web user who viewed all ten content elements would net the station 20-cents. So 5,000 people would each have to view all ten pieces of content for the station to earn the same $1,000. Viewed another way, each piece of content requires exposure to a mass of 500,000 people to achieve the same benefit that it did in the original broadcast.

Mass dismantled loses its value proposition, and this is why the page view model demands more, more, more.

Add to this the reality that the content we create is being commoditized, and you begin to see the dilemma. We're also facing the truth that younger people, in many cases, don't even know (or care) who we are. This is why the Yahoo! consortium "works" for the newspapers. It promises to give them access to advertising inventory outside their page views.

While we at AR&D are firmly committed to Media 1.0 aspects of strategic development for local media companies, we also understand that this alone offers limited potential, and that the best hope for downstream profitability is to simultaneously follow the path of Media 2.0, where the long tail and direct marketing is the appeal and aggregation and context are king, not content.

Because the truth is that the business side of media is in full-blown strategy decay, and we have no choice but to explore business down new paths, while doing the best we can to maintain what we have. This is the essence of Media 2.0.   <Link>

Happy Thanksgiving

THANKS! (Steve)
Happy ThanksgivingThis is Thanksgiving Week, and, cliche though it may be, it is a time to give thanks. It has been a terrific year for me - thanks to so many of you. Indeed, I'm thankful for every one of you who takes the time to read an article that Terry and I write every week. The feedback we get is wonderful. At heart Terry and I are writers first, and writers aren't terribly useful without readers.

I am, of course, extremely grateful to be a part of AR&D. Fearless Leader Jerry Gumbert is taking our company where we know local media companies need to go - into the online world. Jerry and the AR&D partners are putting their money where my mouth is (Terry's too) - and that's something for which I am very thankful.

I'm thankful to have a business partner like Terry Heaton. I was a disciple of his for years - truly - before I finally had the chance to work with him. Terry's vision is usually years ahead of anyone else. But it is on the mark, and when his concepts take root, it's an honor to be a part of the process.

I recently concluded my work at Lost Remote after seven amazing years in which Everything Changed. I am thankful for being able to chronicle the massive shift in our industry. I learned as I wrote and it helped launch my career as a speaker and consultant. I'm now happy simply to be the world's biggest LR fan. Please visit the site often and read what founder Cory Bergman and the team write. Lost Remote is my first stop online every morning.

I am especially thankful, of course, to our AR&D Media 2.0 clients. It is still a brave step to invest in the online future of your company, and we do not take that for granted. Terry and I realize the challenges that face local media companies, and we are proud to help develop the solutions.

Indulge me just a little further, as I thank my wife, Leticia, for putting up with the vagaries of a husband who lives the Consultant Life. When some husbands say they have a meeting, they mean they'll be at the office late. I mean I'll be out of state until Wednesday. Putting up with that? That's love.

Thanks, everyone. Enjoy the Turkey. Easy on the pie.   <Link>

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ME TOO! (Terry)
I want to echo Steve's thoughts about a thankful heart. Steve Safran is quite a character, and we share the same sense of purpose and the same kind of battlefield sense of humor that comes with this work. I love my clients. I'm proud of them. And I'm excited to be a part of this transformative time in all of media.

Steve and I both believe we are fortunate to be doing what we do, and we regularly share that with each other.

Happy ThanksgivingWhile many in media view this as a "down year," our colleague and friend Gordon Borrell rightly points out that it's just the opposite for the Web. We need to be mindful of this — and thankful for it — as we face an uncertain future in the traditional world.

So as you sit down for the big meal tomorrow and look around at the gathered family, consider yourself blessed. For fear is our only real enemy, and that's just tissue paper disguised as a brick wall. We should all be thankful for the truth that's beyond our fears — that this is the most amazing time in communications history, a time of opportunity that comes along only once in a very long while — and we're right in the middle of it. We can let circumstances rule us, or we can rise above them.

And in my life experience, that process begins with acceptance and willingness, and nothing helps that along like a thankful heart.

Happy Thanksgiving to one and all, and, Steve, I live for the pie.   <Link>