Archive for November, 2011

Now THIS is Convergence

Posted: November 22, 2011 in Uncategorized

You gotta love this. Picked it up at sports site SBNation in a blog item from Jason Kirk. It’s the ultimate use of old media to promote new to drive engagement! Go Mississippi State!

Concern is growing that the overall Advertising Market is beginning to slow down, and that situation will worsen after the presidential election is over. Such concerns have caused media companies to accelerate their hunt for new revenue streams.

None of this comes as a surprise. Increasingly marketers have shifted funds from advertising to PR, social media efforts and even content creation. The percentage of marketing money that goes to advertising is dropping and is expected to continue to drop.

According to The Wall Street Journal today, Kantar Media is suggesting that decelerating ad spending growth in the first half of the year could shift to an actual decline in the third quarter.

The Los Angeles Times Story about the same report from Kantar says that “seismic shifts in spending continue to roil the media industry.” Pointing out that many of these changes have been driven by the recession, the LA Times cites major ad buying categories like retailers, automakers and homes sellers as having “been particularly hard hit, and few are predicting a speedy recovery.”

But there have been other contributors to the problems. After the Japanese earthquake damaged car factories and slammed auto production, the floods in Thailand did the same thing to many of the parts manufacturers.

All of this is contributing to a need on the part of content creators to search for new revenue streams besides traditional advertising. In the video world, while some of that money may come from non-traditional advertising, like digital or even advertising supported video-on-demand, there are also non-advertising related revenue streams, like NetFlix and Amazon deals, where consumers are starting to pay both subscriptions and one-time fees to have content delivered when and where they want it.

For print publications, that can mean several things. One of the more interesting strategies comes from the LA Times this week, which launched its e-books business this week with the publication of “A Nightmare Made Real”, an e-book about a crime the paper covered earlier in the year, combining the paper’s coverage and some new material into a digital book. Coming soon is a collection of holiday cookie recipes that paper had published earlier. Pricing on e-books is going to be tested, ranging from 99 cents to $19.99, with some consideration being given to a subscription model. The books will be sold on Kindle, Nook, IBooks and at the newspaper’s own e-bookstore. According to the LA Times, several newspapers are now experimenting with ebooks.

We can only hope the move to generate new revenue streams happens quickly enough to offset the softening in the traditional markets.

The latest industry to see the rise of a potential game changing start-up is the Hotel Biz.

A little known startup called Room 77 was profiled today by Nick Wingfield in the Bits Blog of the New York Times.
Earlier this year Room 77 launched a web site that allows its customers to select specific rooms in hotels instead of just “Types” of rooms.

With a very clean interface that enables a consumer to study the layout of rooms in the hotel and even see the view from the hotel window for that room, Room 77 allows a traveler to check out things that may be important to them, like distance from elevators or stairs. In the beginning not a lot of hotels will be able to offer the information needed for this product, so getting the exact room will be difficult for a while.

But when they do start offering this service, they will be embarking on a new world for hotel operators: transparency.
Most hotels aren’t thrilled about the idea of a consumer knowing exactly what he or she wants. The problem is obvious: Hotels haven’t been particularly good at giving people what they want, so they use their own judgement frequently to give the potential customer something close to what they really want, but not the exact room type because it may not be available. That process becomes much more complicated if the requests are for specific rooms.

The hotels worry that they will lose customers who can’t get the specific room they want. There is a legitimate question as to whether or not the hotel managers really want to see this kind of information out there in real time.

The Room 77 Site Showing the View from a Cosmopolitan Hotel Room in Vegas.

But the fact is, if you can give the consumer something he or she wants, you are doing the right thing. One way or another they will get the information they want, so if you are a hotel owner/manager, you would be better off embracing this technology and running to be up first and best with it.

On top of that, this opens the door for a new pricing model. The very “best” rooms, based on the demand from customers, could cost more. Think of the airline seats with more space that now sell that added space for more.

No matter what, this is the case of technology improving the relationship between the customer and the company.

The latest disclosure that Google is thinking about offering a full cable-tv service, along with phone service, is a strong indicator of where the company is heading. It wants to be the portal into all things video for the consumer.

Google has seen the future of video entertainment and realizes that consumers will ultimately seek out the easiest way to have access to the most content, and that means a system that can access all forms of delivery systems. While some programming will be best served over the traditional point-to-multipoint systems like cable, satellite or even over-the-air, more and more programming will come from interactive 2-way delivery, either on-demand or IP.

The trick will be to hand the consumer a single remote control device that will control access to all those pipes of content, and easily manage and “authorize” their access to programming on each platform.

Cable operators and programmers have called this concept “TV Everywhere” and have been working toward building systems where one point of authentication can allow access to the same programming on all platforms. Google wants to take the next step and provide not just the authentication, but the actual access to the programming through Google software and perhaps even Hardware (Android?)

Another potential player in this world is Apple, which already ties together it’s platforms and allows its customers to access paid content on phones, tablets and computers via its ITunes service. Its Apple TV product is moving quickly toward adding the home TV into the equation.

Some insight into Google’s thinking from Today’s Wall Street Journal:

“Google has been thinking about a move into TV for many years, says Keval Desai, a former Google product director who is now a venture capitalist at InterWest Partners LLC. ‘TV is built on a closed system, which is why traditional cable and satellite operators are the only place where consumers can get ESPN and other channels,’ he said. As more TVs become connected to the Web, he said, ‘Internet companies like Google will be able to give you that same high-quality content,’ possibly at lower prices.”

From Today’s NYTimes Dealbook story about Jon Corzine resigning as head of MF Global, the firm that just went into bankruptcy and could force hundreds of small trading firms to liquidate:

“As Regulators Pressed Changes, Corzine Pushed Back, and Won. Jon S. Corzine, who stepped down on Friday as the head of MF Global, had resisted federal regulators’ attempts to rein in the types of risky trades that contributed to the firm’s collapse.

“A former United States senator and a former governor of New Jersey, as well as the leader of Goldman Sachs in the 1990s, Mr. Corzine carried significant weight in the worlds of Washington and Wall Street. The agency proposing the rule, the Commodity Futures Trading Commission, relented.”

While we are all thrilled he has refused the $12 million in severance he is due as he departs, there is a gnawing feeling here that perhaps he and others who were enriched by the overly risky trading strategies they endorsed maybe should be held more responsible financially.