Monthly Archives: December 2008

"The only thing we have to fear is fear itself"

I’m still in a waxing philosophical about the possibilities mode. Perhaps the following post will get it out of my system. Ah, the giddiness of a new year…

If we are to pull ourselves out of this ad revenue recession, do we not need to fully actualize the capabilities of the digital distribution networks at our finger tips? Not just in terms of our abilities as marketers/advertisers to reach more of the “right” people, but to make sure what we send through those digital distribution networks provides benefit to their media usage (note: people don’t consume media, especially if it’s digital)?

Since I’ve heard so much talk of “the new depression” floating around, let’s begin w/ The New Deal to address these questions.

The New Deal was jarring and disruptive to business as usual that returned focus to the people and solving their issues first and foremost, and then allowing those solutions to drive upwards to benefit the suits running businesses. The New Deal vaulted the US forward to stake legitimate claim to “The American Century”.

Well, that and FDR’s ability to stand firm w/ sanctions and policies that blocked rogue aggressors access to needed resources that led to bringing the US into WWII. Some scholars have said he intentionally agitated and taunted those aggressors to accomplish the goal – which was to rid the world of the rogue aggressors and to further shore up the bedrock of the US.

That nasty Cold War sure was an unpleasant side effect, though. Of course, it did do a wonderful job at continually spurring ingenuity and innovation (maybe not in the right sectors of the economy but it did give us the Internet). Yet it led to some bloated bureaucracies w/ little transparency and hidden agendas. The good news was a leader who was no longer willing to accept status quo – Gorbachev – empowered the people to, also, no longer accept status quo. And Mr. Gorbachev tore down that wall…

And now, of course, the world is flat and Post-American, which means more and more we are competing in asymmetric spaces against entities and people we’d never have considered competitors in the old, top-down controlled environments of The Cold War and prior.

So I ask you – Who are the leaders who can stand firm and vault us into a new media paradigm? Leaders that are comfortable in defining new ways to compete in new markets? New ways to monetize new markets to benefit people using media, people buying media, people producing and selling media, and people selling access to the media? Who are the rogue aggressors needing agitated and taunted into the fight that will cause change? How do we avoid the side effect of protracted disputes that few understand the reasoning for, but all are sure their side is right?

Yes, the giddiness of a new year makes these issues feel refreshing because it feels there is a necessity and urgency to address these questions now more than ever in our media world. Once again, here’s to 2009.

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Unpacking Viacom’s and Time Warner’s Holiday Suitcases

As I’ve recently returned from a week’s holiday trip, I’m feeling the need to unpack Viacom’s and Time Warner’s suitcases and provide some thoughts on the content of their suitcases. Luckily, even though these would seem like heavy bags, this is light packing, won’t need to worry about comparing the rates of checking a bag vs. USPS/FedEx/UPS. Come next holiday season, though, they could very well have some heavier cargo.

Let’s hope they have separate seats or lots of free drinks coming to them in first class. They don’t seem to be copacetic traveling partners. I’ll assume they aren’t taking the corporate jets – Don’t most socialist governments realize that their is power in owning the media…Wow, Colbert would be so proud of me…thank goodness I’m a Comcast subscriber – so they can properly rattle the tin cup when the time comes.

On w/ it then…

Unpacking Suitcase #1
Viacom expects higher fees from Time Warner to carry Viacom networks on Time Warner cables to Time Warner subscribers.

Time Warner says Viacom’s network’s ratings aren’t all that great and they don’t deserve the increase they’re asking.

Viacom points out that 20% of all TV viewing is of Viacom programming, while fees for Viacom programming is only 2.5% of a typical cable bill. Thus, per Viacom, Time Warner has under-valued their programming.

Thoughts on Suitcase #1
I’m going to have to side w/ Viacom when it comes to looking at their share of the viewing market vs. TV ratings. It’s a fragmented media marketplace in these “mass” media and if value is still being derived by the most eyeballs, and if 1/5 of all Time Warner subs eyeballs are in front of Viacom programming, then only sharing 1/50 of revenue w/ them probably doesn’t make sense.

I wonder – do people consider themselves (more) Time Warner’s customers or fans of Viacom’s programming? Is the (most) value in the programming or the access to it? Try to recall, if you can, a case where someone (who isn’t a network engineer or some affiliated type of job) has more love for cables that carry digital packets of information – even if it’s always/usually reliable/redundant – than LC, Colbert, John Stewart, Dora or Sponge Bob.

I think it may be time to see what’s in the other suitcase.

Suitcase #2
Viacom is banking their revenue growth on increased carriage fees from cable operators in light of a slow ad market. 2/3 of Viacom’s revenue comes from media network revenue, which was up 6% in 3Q (while the ad market was down 2%) – primarily due to double digit growth in carriage fees (and Rock Band).

Time Warner isn’t pleased that Viacom takes their TV programming and runs it on their websites, where Viacom reaps all the ad revenue and doesn’t have to pay Time Warner one red cent for access to it’s cables and the customers on the other end of those cables. Time Warner “doesn’t think that’s fair”.

However, and not pointed out in this article, when people access Viacom programming via Internet service, more cables, provided by Time Warner, Viacom doesn’t share in revenues of that access w/ any sort of carriage fee. I’m pretty sure this would allow Viacom to call some sour grapes on the cry of “not fair” from Time Warner.

Thoughts on Suitcase #2
Ah, the nub of it. New distribution of programming doesn’t run so well under old monetization systems. In the process of improving the infrastructure of media delivery, access providers and media companies did a short-sighted job of determining the value of the shifts in media usage that they caused by improving the infrastructure. They never developed a model that appropriately valued media usage that is more driven by people’s schedules of desired use via two way cables than their schedules of distribution through one way cables.

So they are left to squabble over which antiquated levers and buttons they can pull and push to make a buck, ultimately, at the expense – in terms of money and, perhaps more importantly, time and convenience – of their most valuable assets: people who pay for access and are fans of programming.

Kinda makes all the talk of “if the content is good, people will come” irrelevant, really. If the content is good and people come and no one makes sufficient money to produce more good content it really doesn’t matter. Unfortunately for the suits, the infrastructure does a fabulous job of supporting people worn out from bad access provider service and an inability to find consistent, “good” content.

But, ah, the possibilities! I’ve riffed a number of times on monetizing a new media world. It’s one of the reasons I’m energized by the prospects before this industry in 2009. Looking forward to helping to figure it out!

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Filed under bad media, digital distribution, future of media, media usage, monetizing media

2009, I am not afraid and I will beat your ass

The last few weeks of 2008 have given me a glass half full perspective on the media industry. I’ve had a number of discussions w/ friends in the industry who are in relatively early stages of new business models or ventures in media. The kicker is these new models or ventures make sense – a lot of sense. Solving problems that need to be solved either for the business of media, the infrastructure of media, or directly for consumers.

Not pie in the sky, IPO and out, fast buck, free food and drinks types of business models from ~10 years ago. It just feels different in a good way. Real. Pragmatic. The pervasive feeling is one of hey, we’ve been thru something like this before, maybe caused by different factors, but we’ve been in something like this nonetheless. And we know what didn’t work and have a pretty firm grasp on why it didn’t – and ~10 years of experience and wisdom in a growing digital media landscape.

This time there’s a technological foundation and established consumer behaviors in place to support the models and ventures that are being built to make these ideas a reality.

With this sort of change comes a large amount of uncertainty. Personally, I’m a bit worn out w/ the wringing of hands from the old guard and the biting sarcastic I told you so of the new guard – and the pervasive doom and gloom from both sides. There’s some good, folk advice out there that goes something like, “It takes all kinds.” Indeed it does and will continue to be that way.

I’m excited and energized by the possibilities. Whether a marketer, at an agency, in sales or in any other corner of the media industry, I’m having a hard time locating a more disruptive point in media history.

I’m choosing to embrace it – to seek to drive change and not remain complacent. I’m going to do my best to keep my sarcasm in check, but my healthy skepticism in place to drive positive change. To keep my mind open, and be pro-active, patient yet aggressive.

Necessity is the mother of invention. There will be a lot of necessity coming at us in 2009. Let’s invent!

PS: Perhaps my fave album title was used in developing the title for this post…thx, Yo La Tengo

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Not sure which is more disturbing

Received an e-newsletter today from the ANA. The headline boldly reads, “One in Four Marketers is Digitally Savvy: Tools for Every Marketer”. Let’s assume the other three are really savvy when it comes to TV. Wait, that will be digital come February. Disturbing.

How, do you suppose, the ANA solves the problem of making marketers digitally savvy? A series of three presentations from marketers who already display the traits of digitally savvy? Perhaps a series of three presentations from analysts or consultants specializing in the digital space? Maybe three presentations from advertising agencies who have done effective work in digital? No, no, that won’t do at all.

How about a series of three presentations from a media vendor? YES! That is it! Let’s bring Google in to tell us how to be digitally savvy! They must be a disinterested party in all of this! Doubly disturbing.

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