WEDNESDAY, SEPTEMBER 5, 2007
NBCU JOINS VIACOM IN SWIMMING UP A WATERFALL (Terry)
I'm skeptical of this deal for several reasons. One, it's anti-consumer at a time when consumers are in control. Two, it runs from the reality that is distributed content. We need "our" content to be ubiquitous, because empowered consumers want "their" content wherever they wander. Three, it's an incredible gamble on the part of the last-place network. Does NBCU really think that removing NBC programming from iTunes won't hurt their efforts to build a broadcast audience? Finally, Amazon Unbox requires downloading a proprietary player, which isn't compatible with iPods. Absent a deal with iTunes, this means NBC programming won't be viewable on the most popular portable viewing devices out there.
Amazon Unbox was created for DVRs. Here's what's in their "Frequently Asked Questions" section:
Instead of a flat $1.99 per episode, some NBC programs via Amazon Unbox will demand $3.99-$4.99 per episode, but a "source close to the negotiations" (a.k.a. spin doctor) told PaidContent's Staci Kramer that the overall program average will remain about the same as with iTunes. Since the deal with Amazon includes a bigger library from NBC's archives, we can only wonder what programs will be offered at less than $1.99 to make the average come out the same. Trust me, folks. NBC thinks it will make more money this way than with the flat fee via iTunes, averages notwithstanding.
In a statement, NBCU president of digital distribution Jean-Briac Perrette offered the network spin, "With the addition of NBC Universal TV content to Amazon Unbox, fans now have the ultimate convenience for enjoying their favorite shows whenever or wherever they want,..This further expands our longstanding relationship to bring a robust content offering to the marketplace in a variety of ways that will benefit the consumer and, at the same time, protects our content."
Well, but it's just not as simple as that.
Apple speaks for consumers in wanting to keep the charge at $1.99, and I don't believe a word of statements from NBCU that it wants to "benefit consumers" by tiered pricing and bundling (If you want to buy "The Office," do you really want "The 40-Year Old Virgin" as part of a bundle?).
The real issue here is control of content distribution, because that is how creators of original content make money. It's the same thing that's driving Viacom's ill-conceived suit against Google/YouTube. That has never been about copyright per se; in this sense, copyright is just the legal mechanism in place that allows owners to control distribution and set pricing.
The problem with this in today's world is twofold: One, the quality of studio or network-produced programming has been slipping for years. It doesn't warrant the on-air attention that the big players used to get. This is something a lot of observers overlook, but it's a key factor in revenue losses for media companies. It's harder and more expensive to create hits, so studios fall back on formulaic repetition, whether it's music, films or television. Crap in, crap out. 'Nuff said.
Two, the media-to-consumer value chain has been flipped. Scarcity isn't a reliable business model for online content, because the only thing scarce here is attention. This is why it's so difficult to try and scale a content play online. Scarcity has been replaced by abundance, and the rules are just different. Users have a veritable legion of choices and the ability to jump from one to another. Attention, like time, is the new currency, which is why we need to be where users can be found and not rely on them coming to us.
Some experts are arguing that iTunes will suffer by losing NBCU's programming, but I don't think it'll be as bad as they think. People will simply alter their viewing choices, and that's the real nut here. By playing chicken with Apple, NBC risks invisibility where visibility matters most. <Link>
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GOOGLE'S DEAL WITH THE AP: BE CONCERNED, CHANGE YOUR MODEL (Steve)
Now, the AP has done a deal with Google that should concern all of you. Not only are you taking in the same stories, you'll be feeding your stories - in full - to Google when the AP picks up your stories.
Previously, Google News ran a headline and a description of a news story that linked to the story's original page. But under the new deal, you could suddenly be in competition with yourself. And you'll be on the losing end of the deal.
Here's what will happen:
You'll have a big story. The AP will pick it up. Google News will index it. People will search it - and read the AP version directly on Google News, in full.
You lose.
Everyone is sharing content and nobody is winning. Marketing 101: Differentiate the product. The 1.0 model can't make money under these rules. We have to change the rules instead and create more original, social content that doesn't fit the AP mold. Why would you continue to have a website that runs the exact same news as everyone else? The system that stations have relied upon for years is changing its approach to the web. The stations better change their approach to the web as well. <Link>
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THE AP'S DECISION IS YET ANOTHER INDICATOR THAT LOCAL MEDIA IS ON ITS OWN (Terry)
Back in the day, TV stations were paid to help networks spread their programming. They were paid, because the networks had no other way to distribute their advertising. It's fair to say that local affiliates actually built the networks in the same way that local sports coverage helped build the NFL, and look where that's gotten us. The NFL doesn't give a crap about history and neither do the networks. It's just business.
National advertising programs included local affiliates, because it was the only way to distribute their ads on a regional basis. Now, few stations can even get the attention of Madison Avenue.
The networks are now distributing their programs directly to consumers. They don't need affiliates to distribute their products anymore.
And now, AP joins the disruption, claiming that this is somehow good for the overall network, too. I'm sorry, but this is clearly in the best interests of the collective, not its individual participants.
Like its decision to join with MSN in distributing video, the AP's action with regards to Google was done without any advance notice to broadcast affiliates or board members, much less discussing it with them ahead of time. This cavalier attitude is just a reflection of what has happened to the AP over the years. They missed (completely) the opportunity to do with video what the traditional AP had done with text, and they've been fighting an uphill battle ever since.
The AP has always been in the driver's seat in dealing with "members." I put that term in quotes, because the relationship between the AP and those who provide the content that makes it the world's biggest syndicator of news has always been one-way. When I was a news director, I referred to the AP as "the monopoly," but my AP sales guy would always point out, "No, Terry. It's a co-op."
Well, not really. As Steven Covey wrote, "You can't talk your way out of something you behaved your way into."
At best, the AP is an aggregator of other people's content. Original material supplements the aggregation, but this move with Google transforms them into a media company with eyes on the same money that used to go to "members." The irony, as Steve points out, is that they can actually use "member" content to make money in the same realm that the content was originally presented.
The AP is an expensive monopoly, too, and I've always found the formula suspect from a business perspective. We pay big money for content that we play a role in creating. Only a monopoly could make such a demand.
I wouldn't be at all surprised to see Reuters move in and provide syndicated national, regional and speciality news to fill the gap when stations bow out of their deals with the collective. And why shouldn't they bow out? We're long past the days when this kind of content was considered a necessary and unquestioned budget line. What else could we do with all that money?
Regardless, we need to be thinking and acting as if the only world we serve is local, because that's the way it really is. And we're on our own in so doing. It's just business. <Link>
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EIGHT WAYS TO IMPROVE YOUR ONLINE POLITICAL COVERAGE (Steve)
The electorate is talking politics online. They are debating issues. They are talking, shouting, fighting and arguing. It's messy and it's wonderful. For the most part, this is happening on national news sites and blogs. It's not seen that much in local and state elections. This is a shame - our passions are just as strong, if not stronger, when it comes to whether that lot down the street is going to be zoned commercial.
It's not enough to have a politics section on a brand extension site. You need a politics site. (Maybe even more than one - a site for the statewide election and then one dedicated to local elections would truly capture the spirit of local politics.)
"But Steve... we don't have the staff to run those sites!"
Sure you do. Once set up, the sites run themselves.
Once you enable the electorate to start sharing their ideas, they populate the site. Here are eight ideas:
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Also, we'll be able to buy entire seasons at a 30% discount, which, if we're buying "The Office" (at $3.99 a pop), for example, will still be more than what it would've been at iTunes.
What do all of your websites have in common? AP copy. Why? It's easy. You get news stories without having to write them. It's a subscription service. The stories populate the site and make the site look full. People say their local news is all the same; in the case of websites, this is - literally - true. All local news sites use AP copy. So why would I go to your site to read a given story? Go ahead - answer that. If you can come up with a good reason, please email me.