Archive for October, 2008

OVW Week in Review: Layoffs, Conferences, Syndication

Friday, October 31st, 2008

In a week that saw more companies shedding jobs and packing it in for the recession, there was also a lot of positive including news of digital syndication deals designed to push more content to more screens.

I may be a contrarian, but I’m looking forward to the “Internet Winter.” The constriction of available capital should force companies to focus on revenue and refining business models Here’s a roundup of what we saw this week:

  • ESPN’s John Skipper announced at EconSports that ESPN.com will launch a redesigned site in January and expects to generate 2 Billion video views in 2009.
  • MLBAM CEO Bob Bowman had some interesting things to say about online video subscription models and MLB’s digital licensing philosophy and opening up to signing more digital distribution deals. “You’re seeing a loosening up. In the ESPN deal, we gave them a lot more content than we did before that, I think you’ll see a lot more leagues do more of that.”
  • From DPAC II: Tremor Media’s Randy Kilgore says “Pre-roll has gone full cycle. It got its bad rap, and now its come back and is very popular.” But “Standard metrics is still key” says Sean Finnegan of Starcom Mediavest.
  • Strike.TV, formed during the WGA strike late last year launched this week at Digital Hollywood. The digital network debuted 10 original series with professional production values and Hollywood talent. Content is available in HD delivered by BitGravity. Check out Global Warming featuring Aasaf Mandvi (The Daily Show) and Kristin Wiig of SNL and Knocked up fame below.

Whew. Busy week. Don’t forget to turn back the clock on Sunday.

EconSports: Q&A With John Skipper, EVP Content, ESPN

Wednesday, October 29th, 2008

On Digital Content:
Nov 11 we’ll launch a new web series called Mayne Street, we have 15 episodes done in various stages of editing, we’ll debut it after Monday Night football, my expectation is it can generate millions of viewers. It’s between 2-3 minutes. We have 15 second clips, we have a website we’ll put up.

We bought hoopgurlz, and what do we like about hoopgurlz? It’s a great audience, I don’t need people to show an economic model, if they have great content we’ll buy it and put it in our economic model. In the current economy, we like it because we can get great content cheap. There is great opportunity to acquire things at a discount.

How do you Gage financial success of the 1.1 billion per year spent on rights to MNF?
If you’re putting those games on a broadcast network you buy the rights, you produce it you get advertising. Our business is very different. We don’t view this as a 3 hour game, we view it as an entire week, it’s web, it’s sportscenter highlights, it’s a much more complicated financial process. We’re very happy with that deal.

On ESPN 360
We have done 3 football games live on ESPN360, we think that’s valuable. We think the way to get paid for it right now is we think this can provide you a marketing advantage, in terms of the advertising to date no, we’re still working out the technology. Many are being produced for television, we’re pretty close to figuring out how to do ads on it, it’s still an audience in tens of thousands, sometimes hundreds of thousands and we’re very confident over time we’ll return value on that.

How does ESPN avoid being victimized economy?
It would be short sited to suggest that we are in any way immune. Our fiscal year closed Sep 30, it was easily the most viewed most read most listened to year that we ever had so I think we’re in a pretty good position to do very well in any conditions. We also believe in operating efficiently, we don’t believe in taking money lightly or underworking people, our costs are in a great relationship to our revenue and we feel very good about where we are.

On Future Digital Plans
We think of live events as our main priority, we surround that by news and information we’re going to introduce on ESPN.com a new site design in January, I think one of the things that’s very important is video on the internet. We have more video than anybody because we have deals with all leagues except the NFL.

On Audience Measurement:
We’ll generate 2 billion video views we believe next year online. Bob [Bowman] talked about panels, I agree with him completely in the following sense: We think that it’s astonishing that on the internet, you know how many people are watching, we care about the number of people who come and how much time they spend and what they do and what’s important to them. We think they undervalue the relationship between content creation and the engagement that generates. We think that’s just part and parcel how we reach consumers and we in some ways don’t care where they get it we’re just sending content across screens and that’s what we care about.

EconSports: Deals in the Sports Media Sector

Wednesday, October 29th, 2008

Deals: Venture Money and M&A Activity in the Sports Media Sector
Jim Bankoff; Chairman. SB Nation
Chris Russo; Fantasy Sports Ventures
Jeff Price; President Sports Illustrated Digital
Josh Swartz; COO, Wasserman Media Group

On Sports Deals in the Current Economy:
Jim Bankoff:
On a macro level everyone is suffering, you can’t pretend otherwise. Having said that…small companies, good companies will do well, will build value. Larger companies as well will have an opportunity to focus on their core value and to grow. As newspaper chains can’t focus on local stories, that gives us an opportunity to come in and be the biggest sites for these communities.

Chris Russo
The web 2.0 exuberance bubble has burst. The key now does come down to having an ability to engage users and over the next 24-36 months you have to build revenue and cash flow, you’ve got to bring me the revenue story, the engaged userbase, and how you’re going to scale. We cannot have this exuberance, it has to be built on fundamentals. Have to focus on being lean, mean and ultimately profitable.

Jeff Price
I don’t think we’ll see another 100 million Rivals.com or CSTV deal. Do I think there are big deals? yes, sure. I think there could be big deals depending on how they grow over the next 18 months. But I think what has to happen over the next 18 months is some consolidation of companies that can’t be profitable on their own or else they won’t exist anymore.

Josh Swartz
It’s still early but in this case we’re seeing equal constriction on both sides of the market. I look at this economic macro climate as a big opportunity especially for small companies that can go in the right direction, the days of basing business on cost per unique are gone, if you can’t monetize your userbase I’m not going to look at you.

On Business Models for Sports Content
Chris Russo
Advertising, ultimately is the foundation of the sports vertical. Bob [Bowman] obviously has built a business based on video. Building a business based on content from the subscription side is a much more difficult proposition. Things like merchandising have become a much larger part of what we do in sports. Video lives with the leagues for the most part.

Josh Swartz
The more niche your content is the greater the ability to charge for them because the userbase is so rabid, and that’s information you can’t find anywhere else, certainly not for free.

EconSports: Q&A With Bob Bowman

Wednesday, October 29th, 2008

On Overall Content Strategy:
I think all the leagues are doing a good job optimizing their content. We do 15 games a day, we play all the time our content is fundamentally different than all other games. Baseball, our job is to promote the game all day whereever it is. Three TV parntners ESPN Turner and FOX, what we try and do is recognize what works for us works for us but also understand what works for [TV partners] and try to accommodate it.

On Digital Rights Agreements:
In 2001 it was sort of we don’t know what it is People are smarter today in terms of knowing what it is to have a digital contract, in 5 years people are going to get more comfortable about simulcasting…an eyeball online is arguably more valuable than an eyeball on TV.

On Free vs. Paid Content
Increasingly I think folks are going to realize that the ad market is not a bottomless pit…I think you’re going to see more and more people charging for content, doing what cable does which is charging for subscriptions and having ads. 95% of our content is ad free but I don’t think you want to be in business always ad supported

On Mobile:
Mobile About 15% the usage is exploding, during the season we’ll do about 12-15 million page views on Mobile. Apple and RIM have been very smart…in terms of usage reliability, I guarantee while we’ve been sitting up here everyone has checked their blackberry it may not be a major part of our business but we have to be there and there’s no choice.

They certainly want information whether it’s the gambler or the avid fan, they want real-time information. The Apple application they like, people want video but the screen size needs to be bigger, [for video] the iPhone is the first device that works for us.

On Measurement
We’re big fans of getting it right, since you can get it right you should. The notion that you can hire a panel and get them to be honest about what they do at work…it’s pure poppycock. That’s why we have a boss button. We all have logs, everybody has logs, we hope that some day everyone will look at the log files and say that’s what it is.

Nobody’s going to tell the truth about what they actually do. I don’t know anybody that thinks that panels work. People should be auditing these log files, most everybody who’s large looks at Omniture. [Nielsen numbers are ] off by a factor of 10. When we get paid they care about impressions so they look at our log files, the only time it matters is when our reach is 58 million, and Nielsen is saying it’s 12 million.

On the Current Players Association Contract
Players Associate has been a good partner, we would anticipate restructuring our deal and getting it more in line with the way the world works. They’ve been great partners of ours and we’re continuing to work with them.

On MLB Network:
We’ve never been able to partner with a cable network, we have partners now we’ll be able to have both, we’ll be able to go out and do ad sales and it will be great for the fan first of all and it will be good for MLB.com.

On Licensing Philosophy
The pricing reflects two things to us today. The first thing is the business value, there is a value there, we’re all moving a little bit at a time so we don’t want to make a big deal that turns out to be a chump deal…if a deal doesn’t happen we still own the rights and we can still do it next year. We’re all trying to figure out how to move beyond the shores of our portal… you’re seeing a loosening up. In the ESPN deal, we gave them a lot more content than we did before that, I think you’ll see a lot more leagues do more of that.

On Subscription Products
We charge for live games. Most of our site has to be free not because a fan could go to ESPN, we hope to get to the point where we have some games that are totally ad supported and we hope to get to that in 2009.

On YouTube / UGC / Slingbox
[Some fans] are routinely stealing our highlights or republishing live games, it really has to be systematic, repeated for us to force them to take it down, we don’t think that it’s hurting our business model to allow some of that to occur [for related non-highlight / non-game content]. May see more opening up in 2009.

Slingbox encourages fans to utilize content in a way they shouldn’t use it. We’re not excited about it. Having said that, what do you do, we’re going to stand outside the door of fans that have bought a slingbox and ask them to pay a fee? You can’t do that, the way to win is you win it on technology, we’ve got things like pitchtracker, you win it on the loyalty of the fans.

FOBM: Beyond Ads: Alternative Revenue Models

Tuesday, October 28th, 2008

As traditional business models for publishers are disrupted by new media, where should media turn?

“We’ve seen from the year 2000 where print represented 48% of member revenue on average that has dropped to 38%” said Gordon Hughes, President & CEO of American Business Media. “And what we’ve seen is tremendous growth in tradeshows and events, and of course the internet has had the greatest growth.”

“Moving to new business models. 85% of our members are still in that spot where they’re working with advertising as their primary revenue source and 50% or more are beginning that migration.
Streaming media has become a new robust revenue stream, whether it’s 7 or 12 second rollups agencies are starting to like this. A number of our members are doing this and I love the idea of two revenue models, subscription and ad sales.”

Elisabeth Sami CNBC’s SVP Global Business Development added some metrics on the company’s pursuit of dual revenue models online, saying CNBC has nearly 200,000 users across its enterprise and direct to consumer subscription products while the company is generating solid revenue through ads on CNBC.com. She said the company feels well positioned to effectively reach a large affluent audience and continues to see growth in nascent areas like mobile and satellite radio.

FOBM: Finance as Breaking News

Tuesday, October 28th, 2008

As mainstream media competes for eyeballs against bloggers and others in the new media environment, what is the role of Business Media in the current financial situation?

Larry Kramer moderated a panel at FOBM featuring an anchor, managing editor and editorial writer to get a look at how covering business is changing. The key takeaway, the pressure to be right and first is putting more stress on business media organizations now than ever before.

Liz Claman; Anchor, Fox Business Network
[The current financial crisis] is the most drawn out breaking story… rumor driven and if you go with every rumor you’re going to gyrate the markets but it’s a journalist’s dream to cover this. “Everyone loves a bubble until it busts and then it spews toxic waste all over the place, and then it’s our fault…classic blame the messenger” “As my father used to say, the only difference between salad and garbage is timing… You’ve got to talk about where the soccer ball is going to go, not where it is right now, you have to present the different echelons of possibility.”

I’m impressed with the intelligence of the comments and our viewers. There’s a blog called Dealbreaker, they get a lot of tips, but if you don’t double and triple check them you lose all credibility. I look at some of the things that get thrown out there, and maybe 78% are right on but what about that other percentage?

Chrystia Freeland; Managing Editor, Financial Times
Anyone working in a print based organization has these dual roles, we’re constantly thinking about the website, but we’re also worried about what’s going to be on the front page tomorrow. And we also have 7 different world editions. As, reporters we are reconciling ourselves that we are not Olympian godlike figures, and what I mean by that is that there is a great temptation to get ahead of the curve, to tell you what tomorrow’s story will be…I don’t think that anyone has a firm grasp on what’s going on. Fly as close to the ground as we can, reconstruct as best we can what actually happened, also, to forecast what the real drivers will be, a little bit of a judgment but to stick to the facts.

You could absolutely understand that there was a bubble but while the music is playing you have to keep on dancing, you know the music is going to stop, and you don’t want to be the guy without a chair but you want to be the guy with the last chair because people are making lots of money.

We focus much more on being right than ever before because that is our competitive advantage.

Joe Nocera; Columnist, New York Times
I wouldn’t want to have to be the person who says the market just dropped 400 points and let me try to explain it for you, that’s a fools errand. I think one of the real value adds of the New York Times is we have a weekly column …the notion that you can bring content and perspective, every Saturday. My job is to try to help you understand what’s going on, from my perspective. We can do a big long story offering perspective and context, it’s the most important thing we can do, I think people really hunger for that and that’s what I’m doing.

We’re acting the same way in this financial crisis as people did in 1929 and before, people don’t change, the next step is the search for villains.

FOBM: Q&A with Aegis Media CEO Sarah Fay

Tuesday, October 28th, 2008

At the Future of Business Media Conference, Sarah Fay, CEO of Aegis Media just wrapped up a discussion with Fortune Managing Editor Andy Serwer. The Q&A included some interesting thoughts on where we are in media right now and the future of new technologies in the media industry. Key points:

On the current economic situation:
I think there is an anticipation of it getting worse. We’re reaching a critical point… the predictions are coming down slightly but the bottom is not falling out of the media. There’s a shift to digital media… [where] spending is still up fairly significantly.

What’s your Google strategy?:
Google is a huge partner of ours in search…we actually work with Google collaboratively to get sites high in their rankings, we work with Google TV. We believe that YouTube is a force to be reconnected with…when it comes to search they are it for sure. Search is really important, will continue to grow for the next decade. Google TV is interesting but we’re seeing that there are a number of companies going after that model, right now there isn’t a large enough footprint, but you can add efficiency so it’s a really good place to get your feet wet.

On the Yahoo/Google transaction
“I’m not a big fan” I actually was a big fan of Microsoft buying Yahoo, I thought those two would give Google a run for its money, I like competition. The idea of the biggest search player and the second biggest search player getting together to join forces doesn’t sound so good to me.

On TV Advertising:
Areas of TV that are softening up is primarily the long tail, cable, we have not seen network come down in demand or maybe just a little bit. But we are seeing the same dynamic year after year with the networks, that is declining ratings but increasing CPMs because it’s prestige pricing, beachfront property…There is a whole long tail of TV that is very soft and has been soft on a regular basis and we are seeing technologies like GoogleTV like Project Canoe, and I think that we’re going to get to a point where we get a little more comfortable buying the digital aspect of TV and there’s a lot more efficiency than there was before.

On Hulu:
Hulu fits in to a buy from a broadband standpoint, it’s pretty regularly a part of every schedule, it’s different from TV; It’s bought differently, it’s measured differently, but we’re very bullish. We like that you can’t skip the advertising, can get very targeted, and it creates a very high impact relative to other media.

On declining programming budgets:
Certainly the networks are happy about the popularity of reality TV because it cost less… We also may see an increase in quality and more content going to the HBO model. There’s a willingness to pay great money for good content.

On user-generated & viral advertising:
Viral is huge, we’re looking to incorporate communities and the voice of the consumer in almost everything we do. Getting consumers involved in campaigns, getting consumers to create for you or participate with the brand is where you will get an extension to the media budget. If you can get the consumer talking for your brand there’s a new kind of authenticity and creativity that comes along with that, and a lasting impact on brand equity.

To Watch Tomorrow: Beet.TV Live from 30 Rock

Monday, October 27th, 2008

We understand you can’t be in three places at once, that’s what we’re here for. Tuesday morning while Corey’s at DPAC II and I’m at FOBM, Beet.TV will be streaming live from 30 Rock as Erick Schonfeld of TechCrunch and Dan Farber of CNET moderate an online video summit with an impressive panel of industry leaders.

The live stream is embedded below:

Samsung Instinct: Video Advertising Done Right

Monday, October 27th, 2008

Check out this branded entertainment piece from Samsung. Be ready to pause, and be ready to interact. This is what the future of video advertising is all about.

Its a series of videos. Be sure to play around.

DPAC II: The Pre-Roll Panel

Monday, October 27th, 2008

Moderator: John Durham, CatalystSF
Panelists:
John Vincent, Eyewonder
Sean Finnegan, Starcom Mediavest
Randy Kilgore, Tremor Media
Tod Sacerdoti, Brightroll
Mike Henry, Veoh

Kilgore: Pre-roll has gone full cycle. It got its bad rap, and now its come back and is very popular. It got a bad reputation because it was being placed in front of content that people weren’t sure had any value. Now that it is associated with better content, the value proposition is clear. A :15 second pre-roll in front of two minutes of content is something people are very comfortable with. Now we’re focusing on tying it all together on the back-end with advanced reporting.

John Vincent, Eyewonder: People thing about pre-roll as repurposed TV, but the perception should be about the placement. Its an increadibly powerful spot, especially ahead of premium content. Pre-roll is the most valuable location. Understand the opportunity and then execute against it. Don’t think about it as repurposed TV spots.

Mike Henry, Veoh: I don’t know that the location makes it more valuable. Part of our own research has shown that the more time people spend with a video, the more engaged they become. They are more likely to rate it, to send it to a friend.

Tod Sacerdoti, Brightroll: We don’t see any ad unit as dominant as pre-roll. The two things we focus on a getting quality content at scale, and can we get pricing at rates that people are comfortable scaling their budgets. I’m bullish on pre-roll

Q: When can we get sustainable standards?

Sean: Standard metrics is still key. The ability to bridge the gap with the people who are buying TV is one of the ways to allow the ad dollars and inventory to flow. You also need to preserve the unique elements of online video, like the ability to track purchase intent and filtering down the funnel. But we need to align these universes and understand that it is the same user across multiple platforms. In the digital industry, we tend to stay down in the weeds a little too much.

John Vincent: Until recently, it has been technically impossible for publishers to have the same tracking and interaction metrics. So we’ve rolled out a universal metric that Adobe and Microsoft are adopting.

Kilgore: I don’t understand why we even need to have this conversation. Before digital, we were still aggregating audiences across platforms and figuring out how they work together. Maybe its because in 2001 we needed to show how different and special we were.

Sean: My point is that we just need to be able to find a way to do more of it. But there are some fundamental hurdles.

Tod: The reason I think measurement is so important is that ads have ways of finding themselves in places that advertisers don’t want them to be. Campaigns tend to be optimized for a number of different metrics, but we need to be able to give advertisers the trust that the placements are way they should be.

Mike: High CPMs are going to need to be justified, especially in the short run. But if you wan to compete with the scale of TV, you wont be able to charge those high CPMs that will finance and support the industry. I’d expect that the CPMs will go through the roof because we can narrowcast our message to the audience that is relevant and measure its impact.

John: You can measure what you get on TV, and then all the interactivity on top of it.

Is the money following the video? Why aren’t we getting $75-$100 CPMs for targeted campaigns?

Tod: We need to show the efficacy. And the interoperability isn’t there yet.

Mike: I’m skeptical that the CPMs will be higher than TV. You could argue that TV is overpriced right now. The dollars will flow when the pricing is more competitive. But there’s a tendency to hold on to those higher CPMs.

Kilgore: I think the issue is slightly different. The money comes from the marketer to the agency for planning. And then the portions get sent to digital or other places, but that hasn’t really changed. There’s a reason that the money goes to TV first. They see the broadcaster’s digital extension programs, but they haven’t been exposed to the real online video market. Where the pricing will fall will be up to us to show the value of our audiences, our targeting, and our benefits.

Audience Q: We’re hearing that DRM is part of the problem shifting TV ads over to online.

Randy: We hear that about 10-15% of the time. I’m surprised at this point that people aren’t securing those rights.

Audience Q: Are the networks doing a better job building an ecosystem around their video content than the agencies are on a campaign basis?

Sean: I think the networks are odin ga fantastic job. My agency is there in lock-step with them and continue to work with them on multiple levels to find more opportunities. We’re big fans of pre-roll and buy it a lot, but we’re also interested in further, deeper innovation.

Audience Q: A pet peeve of mine is seeing auto play video on a home page. Are those ‘real’ streams or not? Would you buy them?

Sean: No. If we knew that was happening, we wouldn’t by that.

Mike: If we could prove that those units were less effective, it would be easier to weed them out of the mix.

What are you doing in your organizations to help people move away from the UGC perception of video?

Mike: What we’re trying to understand is the relative engagement and effectiveness of the different types of content. What is different about web content – not UGC – that is different from Lost of Heros online.

John Vincent: Risk vs Reward. You have marketers who are looking for an advantage. You look at costs and you look at downside risk. If the risk is greater than the incremental upside benefit, you just eliminate that from the buy.

What frustrates you most about our industry?

John V: I wouldn’t say frustrated, but I’m fearful about 2009 and losing all the progress we made in 2008. How do we learn from what we did in 08 and do more in ’09. Marketers can either cut costs.

Randy Kilgore: We’ve come so far, and we’re talking about a lot of the same things, but when you balance that against all of the great things going on, its hard to get frustrated at all. I’m more concerned about the things going on with Congress that could derail our whole industry.

Sean: I’m a bit more positive. In this tough economic time, I think we’re going to grow up as a business and see how we can advance while the pressure is on.

Mike: I’m also more positive and excited about what will happen in the next year.

What is an interesting website that you go to?

John Durham: SlideShare
Mike: Veoh obviously
Tod: Search for “retargeting” and see how often they find you over the next week.
Sean: There’s a new site called Facebook
Randy: SeatGuru.com.
John Durham: Hopstop.com