Archive for July, 2011

Tablet owners have quickly adapted a preference of using their tablet rather than a computer for media consumption of all kinds. Weather, music, games, News and Information are all categories of information that tablet users would rather get from their tablets than from a PC, according to new research from Frank N. Magid Associates, Inc.
“Reading” has also quickly become something tablet users would rather do on their tablet than any other place.
Tablet users have taken the time they need to be on tablets from a number of other areas, including time they had spend reading print newspapers and magazines AND the Time they spent using the Internet on their phones.
Finally, Tablet users as a group are much more active media consumers than mobile phone users are. Those who get tablets spend much more time on their email accounts, on the internet and doing many different things on digital platforms.
The charts:

More new research from Frank N. Magid Associates shows that TV viewing has returned as our number one leisure activity. See Chart:

Some new research from Frank N. Magid Associates, Inc., indicates that a quarter of all internet users are accessing the Internet through their TV sets, and that many of those who don’t now are interested in getting there. What’s interesting is that much of that activity is happening through gaming consoles, like Playstation and Xbox, rather than direct connection of the TV to the Internet.
Here are some interesting charts:

The rapid disintegration of News Corp (NSDQ: NWS) in London because of the News of the World scandal highlights a growing reality in the media world today: Integrity and reputation mean more to news organizations today than ever before.

Rupert Murdoch

In the old days, it was very difficult for anyone to challenge existing media franchises. It was expensive to own, or even rent, printing presses. It was extremely difficult to get a license to broadcast audio or video. Magazine publishing was extremely expensive. Great media brands took time to be built.

But in the digital world, it costs almost nothing to LOOK like a serious media player. You can build a site that looks exactly like (NYSE: NYT) or HuffingtonPost in a matter of hours at little cost. Putting up content or aggregating content from reputable sources is cheap. It became harder to distinguish those companies with journalist credibility from those with other agendas.

What that meant is that the true news organizations had to rely even more heavily on the reputation of their brands to carry the day and separate them from the huge cadre of pretenders. It is now the burden and responsibility of the news media business to establish the difference between credible news organizations and everyone else with information to share.

So when we discredit ourselves the way News of The World did, it impacts the entire business, starting with companies closest to the offending party, like those in the same corporate structure. It also opens the doors to others who would fill the gap and who can get into position to do so in a matter of hours as opposed to months or years .

While you might not consider News of The World in the same category as the New York Times, there are still some journalistic standards that must be upheld across the board. Like the National Enquirer in the US, the News of The World does cover government officials and serious targets, and like the National Enquirer, if they are going to take on those serious targets, it has to adhere to the laws in place to protect subjects and media alike. The National Enquirer, for its part, has made great strides toward establishing its coverage as very serious.

Making mistakes doesn’t have to destroy your credibility, as long as you live up to the mistakes and move quickly to get beyond them by reestablishing your credibility day after day. We have to earn it back, but we are fortunate, in the news business, to be given the opportunity to do so quickly because we are always working on new stories and breaking news.

Looking back at many of the biggest mistakes made in the industry one can see that the businesses that survived them moved quickly by owning up to the mistake and putting in place procedures to prevent what happened from happening again.

In the media, as in politics and government, the real problems tend to surface with the coverup, not the original crime.

Janet Cooke

In the celebrated 1988 Janet Cooke case – where a young Washington Post (NYSE: WPO) reporter won the Pulitzer Prize for a series of stories centered on an 8-year-old drug user in the District of Columbia, only to have to surrender the prize after it was disclosed that the stories and subjects were largely fabricated – the paper’s editor, Ben Bradlee, apologized publicly for himself and the institution, assumed blame and published, in the Post, the results of a huge internal investigation. Some management changes were made in the Metro Department, where the story came from, and the paper moved forward and ultimately survived.

Ben Bradlee

In 2003 the New York Times went through a brutal plagerism scandal involving another young reporter named Jayson Blair. The resulting internal investigation, which the Times also published, led to the resignation of Times editor Howell Raines and his managing editor Gerald Boyd. Again, the publication weathered the storm by working hard to reestablish its credibility early and often.

But in this case, News Corp.‘s initial response to the charges was to try to isolate the problem on one person and take no institutional blame. The public and the government were assured over and over again that after considerable internal investigation the problem was isolated and over. In two words, they said “Trust us,” but did nothing else to earn that trust.

Thus began the coverup. Like many of the most famous coverups—Watergate comes immediately to mind—the ultimate downfall of the participants came because they lied about the original offense rather than taking responsibility, seeking to identify the underlying factors that allowed the problem to occur, and trying to fix them and move on.

In media, we today have precious else besides our credibility to set us apart from anyone with a bullhorn or a website. If we lose that credibility, we have no separation from the rest of the world and their messaging.

In a world of consolidation, with many media brands now falling under one corporate umbrella, the problem is further complicated for two reasons:

1) People who know that two media companies are owned by the same company will assume practices at both are the same under one corporate culture and
2) Pressure can be brought against media conglomerates on multiple fronts. In the case of The Washington Post during the Pentagon Papers, for example, the government threatened to pull the Post Company’s TV station licenses. So being a media conglomerate, while generally making the company a stronger player because of its broader financial base, also makes it more vulnerable to attack on multiple fronts from a powerful government that regulates media. Today, that scenario played out when News Corp. pulled its planned acquisition of BSkyB (NYSE: BSY) because of widespread government reaction to the News of The World scandal.

To sum it up, reputation and brand equity are rapidly becoming the primary assets of any media business. So when we damage them, we damage the entire industry, starting with those companies closest to the offender. The News of The World Scandal does damage others in the News Corp. family, like Fox News, The Wall Street Journal and even my former company, MarketWatch. Trust is something that has always been hard to earn, but has become even harder to come by in recent years.

These news organizations can only protect their reputation by redoubling their efforts to do great journalism and to be overly transparent in their techniques and procedures, going out of their way to describe their motivations and their standards in pursuit of stories. There is no other way to convince a growingly skeptical audience.

Without doing that, they are each just another screaming voice in the crowd.
(First Published on

ComScore reports that Americans searched on the web 18.7 billion times in June, a 3% drop from May. All major search engines were down except Microsoft, which was up 5% and is gaining on Yahoo.
Note from ComScore:
* “Total Core Search” is based on the five major search engines, including
partner searches, cross-channel searches and contextual searches. Searches
for mapping, local directory, and user-generated video sites that are not on the
core domain of the five search engines are not included in these numbers.

“Powered By” Reporting

As a part of comScore’s commitment to accurately represent the continued evolution of the search landscape, comScore is providing insight into the share of organic Core Explicit searches that are powered by Google and Bing.

In June, 67.6 percent of searches carried organic search results from Google (vs. 67.8 percent in May) while 26.6 percent of searches were powered by Bing (vs. 26.5 percent in May).

I need to start this post with a disclosure: I’ve just joined the board of a very cool company. With that said, I believe this company, Appinions, is advancing the concept of identifying true influencers by measuring their impact in both social media AND traditional media. Most of the new companies in this space are targeting social media and using the subject’s reach over Twitter, Facebook and LinkedIn users as the basis of measuring their influence. But Appinions is using a much more sophisticated system that also monitors traditional print and broadcast media for mentions and uses some interesting software developed at Cornell to create a much more realistic profile of the impact an individual really has throughout the entire media ecosystem. In the end, since traditional media has certainly not gone away, this presents a more accurate portrait of the true influence of an individual.
Here is a short video that does a better job of explaining how it works. But I can assure you it’s an interesting story.

Is Content King?

My friend Jonathan Knee of Evercore Partners wrote an interesting post on the Atlantic’s website about Netflix (NASDAQ:NFLX) questioning this assumption. In part, Jon discusses why Netflix is winning without paying homage to the King. The guys at WallStreetCheatSheet asked me — as a staunch supporter of the need for media companies to own their own content — to respond to Jon’s columns.

Here is the resulting response to Jon’s main points:

Jonathan Knee

Damien Hoffman: Larry, Jon says Netflix’s success is “unnerving” because content creators are struggling to stay profitable while a “redistributor/aggregator” thrives. Do you see this as unnerving or something different?

Larry Kramer: I do believe it’s a bit “unnerving” to content creators but for a different reason. They are seeing their traditional partners (e.g., cable MSO’s, Satellite providers, etc.) threatened. Jon has done an excellent job in describing the reasons behind Netflix’s (NASDAQ:NFLX) fantastic success and the value of serving a customer base the WAY it wants to be served. But, most of the problems content creators are having relate to costs of their existing distribution systems, not the cost of CREATING great content.

Video content creators for television and movies are churning out more excellent programming than ever, but the squeeze is happening at the distribution level. So, the syndicaters and cable MSOs are starting to push back against increases sought by content providers. For now, Netflix (NASDAQ:NFLX) actually offers some relief to the content creators because they represent an additional revenue stream, since Netflix is paying for the programming. The difficulty for the creators is knowing how much of that upside will be eaten away by the other distribution partners asking for relief.

The networks are also concerned that Netflix’ existing model — which calls for no advertising — could cause problems for traditional distributors who run ads because consumers could come to prefer programs with no ads. That could drive viewers away from the advertising model. The amount people will pay for that privilege, however, is still unclear and may always be a moving target.

But the networks, in the end, will still get paid for their content … either with advertising or fees.

Damien: Should companies stop focusing on content creation if it’s such an inferior business to aggregation (according to the article)?

Larry Kramer

Larry: Absolutely not. Aggregation is important when consumer habits are changing like they are now because it’s harder and harder to understand what experience the consumer really prefers. But the industry needs to stay close to that and understand it. Netflix (NASDAQ:NFLX) is in an ideal position because it uses so many different distribution systems that it can follow users from one to another.

The Cable MSO’s have already begun to fight to distribute their programs on iPads (NASDAQ:AAPL), and other devices. But just because consumers demonstrate a preference for certain types of delivery doesn’t mean we have a working business model. Hulu (NASDAQ:CMCSA) (NYSE:GE) (NYSE:DIS) is a perfect example. Great technology, lots of consumer acceptance, but the business model depends on relationships with its owners that won’t stand the test of time.

The content creator will still be the one that understands what kind of content the consumer wants and learns to give it to him or her. The content creators’ job has gotten a lot more complicated because they have to adjust to the new platforms their customers want to use to consume that content and make sure they optimize the content for each of those.

Damien: In relation to the 4 C’s — Consumers, Content, Curation, and Convergence – how does Netflix score as a media company in the new Golden Era?

Larry: Netflix (NASDAQ:NFLX) has quickly understood the power of the Consumer because it spent generously to go onto multiple platforms even before they were big. That represents a true understanding of the Convergence of distribution platforms. People want to buy something once and use it wherever they are. Netflix understood that. They also understood their role as a Curator, offering a wide choice of content to their customers, but spending money on only the content they felt was important enough to those customers. If they picked badly, no one would come. But they understood what Content people would want across all their platforms. And guess what, as Jonathan pointed out, they have also begun to develop their OWN content. That can only mean they know they have to prepare for the time when others might not allow them to have all the best content.