John Houghton's New Media Blog

It used to be all about TV media strategy but with the recent shift to online media consumption habits, companies are placing increasing emphasis in online strategy.  If you snooze you lose is what Viacom is learning as YouTube and myspace eat MTV’s lunch (Viacom owns MTV).  Lack of online strategy and erosion to new media has prompted the firing of Viacom’s CEO, Tom Freston.  This is just one of the many consequences we will see as advertising dollars follow consumers online.

Today’s article in the Wall Street Journal, With Sexy Story Lines, Low Budgets, News Corp. Will Launch MyNetworkTV shows the results of the fragmentation of media and its effect on production – it’s driving costs down and requiring that directors do more with less. Shot in high definition and premiering on September 5, 2006, Rupert Murdock’s MyNetworkTV will launch the shows Desire and Fashion House.  These productions are shot non-union and not in LA, allowing them to reduce production costs to 1/10 of their normal level.

What does this mean for us?  It depends on who you are.  If you’re a consumer, you might find programs that are more tailored to your taste.  If you are an advertiser, you might find smaller but more targetted audiences.  If you’re used to working on high budget productions, these aren’t going away (superbowl still in vogue), but there will be fewer of them; you might ditch your high priced assests and reinvent yourself so you can compete.

If you are in a major metro area, you might see more productions shot in your city, less in LA.  Silicon Valley used to be the meca for startups and it’s still said that the most successful are located within 5 miles of Sand Hill Road; however, we’re seeing lots of startup success outside of Silicon Valley.  Same with Holywood, the current meca for film/media but that’s all changing.  I live in Silicon Valley and it would be fun to see productions shot locally.  Local government has been asking for it.

If you’re an indie producer, you might get some of this new work.  If you’re a big media company, do what Rupert is doing: Start your new MyNetwork and as the market changes, focus your attention on the new.

What does that mean for celebrities?  I don’t know.  In my studies of celebrity, the mass tendancy is to idolize only a few, however, with fragmentation there is room to expand.

For those of you who don’t know what media fragmentation is, it is division of the media audience as the number of media outlets increase.  For example, in the 70s the TV audience was divided among just a few major networks.  A company could run 30 second spots for a matter of weeks and establish a national brand.  They were able to spend a lot on that spot and reach a large audience.  Then comes cable with a few hundred channels, then the internet with it’s millions of web pages, XM, Sirius, podcasting, videocasting, and blogs.  The audience is now quite divided, “fragmented” and this is having a large impact on society.  I produced a podcast on this at www.newmediacurrents.com, complete with expert comentary.

Some of you may already know this, but I didn’t quite realize that outdoor advertising is still ahead of internet advertising.  TV spend is still about six times larger than outdoor but is growing much slower.  According to the Wall Street Journal and ZenithOptimedia,  last year’s worldwide outdoor advertising spend was $23.2 billion, up 6.1% from the year earlier, while spending on TV ads was $146.8 billion, up 3.8%, and internet advertising was at $18.1 billion, up 28.77% from the previous year.  The ad buying market still has a lot of catching up to do since a lot of the folks I know spend more time on the internet than they do watching TV or being in the vicinity of an outdoor ad.  That being said, I see a big market for LCD outdoor advertising.

As if it wasn’t already big, thanks to YouTube and friends, video is increasingly getting traction.  According to Media Metrix, which measures such things, YouTube broke into the Media Metrix Top 50 for the first time, “debuting at number 40 with 16 million visitors, a 20 percent increase versus June.”  I’ve noticed this trend in my own company – big demand for video.

According to Jack Flanagan of Media Metrix, “the trends we’re witnessing indicate that online video is emerging from its infancy and entering the mainstream.  Many publishers and advertisers are responding to this trend, which means advertising dollars will continue to migrate online where consumers can be targeted with efficiency.”

As for how I like to consume content, YouTube is a bit cumbersome.  In my company I get paid to survey the market and I can’t waste time doing so.  I can traverse more content more quickly with other engines.  I like Google Video because if I like something I can download it to my video iPod fairly seamlessly and in the correct format.  I can also watch Charlie Rose at full length and without advertising.  Apparently Yahoo has the most user adoption with video, however, with Yahoo you cannot download in mpeg-4 format for the iPod.  Only windows media player or flash.

User generated content; how about when a company generates its own content?  Anheuser-Busch, the makers of Budweiser, are getting into the game and are launching their own production company that will make “humorous shorts and sitcom type programs to be broadcast over the internet.”

It’s amazing to me that despite the amount of time consumers spend online, only 4% of corporate ad budgets go to online advertising (versus traditional, such as TV).  I’ll do some research, but it seems that certain demographics, such as 18 -24, are spending more time online than they are watching TV.  What’s the take away?  The take away is that online and new media advertising is unexploited territory. Those companies that are smart and willing to take risks in new media could see big returns.

Last night I went to a corporate event Mobile Platforms: The New Frontier for Software and Services at Adobe.  One thing that really struck me is the capabilities of flash for mobile devices.  I saw a demo of a flash movie being played on a not-overly-sophisticated cell phone.  The current limitation I see with mp3 and MPEG-4 (audio and video standards for podcasting and videocasting respectively) is there is no adopted standard for inserting hyperlinks into these media files. True, ID3 tags have been around for a while and can contain hyperlinks, but iTunes and Windows Media Player don’t support clickable hyperlinks that fire up a browser – especially not on mobile devices.

Flash does support embedded hyperlinks and the big news here is that flash runs well on the current generation of cell phones.  What does this mean for marketers and consumers?  One of the limitations of podcasting and videocasting is if you hear/see something you like and you want to buy it, you have to write down or memorize the URL, go to your computer and fire up your browser to get more info or to purchase.  Usually doesn’t happen.  Marketers have been frustrated that there is no direct link between the content and the point of sale conversion.  Now there is.  Consumers will like this because if they want to act on something they see or make a purchasing decision, they can do so with little effort. Basically, this is a huge enabler of ecommerce on cell phones.  Imagine if you’re watching a show sponsored by Nike and you want to buy an Air Jordan duffle bag.  This is just a click away.

It’s a significant development since cell phones are the most ubiquitous device with 4 billion mobile subscribers forecasted for 2011 — you can bet many of them will be media enabled.  We discussed the farmer in India who has little technology except for his cell phone where he performs stock trades on Indian fiancial markets from the back of his donkey.  That’s the future and that’s where we’re going.  For now, we’ll have to dig in some more to see just what Adobe can do on cell phones today.

I must say that I’m very pleased with the uptake in podcasting by the general public and the number of new podcasts.  My company focuses on corporate podcasting.

I just spent the last two days listening to about 250 B2B podcasts and I’m very happy to see the quality of the content is now much improved from last year.  This year it seems like there were two waves of innovation.  One wave of new podcasts started in February of this year (2006) and many of those only lasted for a few months, but then again in June a lot of new podcasts started and they are still publishing.

In order to do my survey of podcasts, I used podfeed.net because it is a lot easier to quickly get to new content and listen for a few minutes rather than the minute or whatever that iTunes gives you.  Also, iTunes has organized and formatted display of a lot of their better content but made it harder to find the less popular podcasts.  That’s good for the general public because it needed to be cleaned up, but bad for me in my exercise.