Dotcom high flier Josh Harris re-emerges with Operator11

This being Labor Day weekend I thought it fitting to open with a flashback to the workplace antics of pre-bubble lore. For instance, if you can remember being at one of Josh Harris’ New York office parties back in the day, you probably weren’t really there. The founder of pioneering Webcaster Pseudo was a poster child for dotcom excess. He hosted a three-day Quake multi-player launch fest. In a recent message exchange with Josh he recounted to me spending $1.5 million of his own money on a month-long Millennium Party at the turn of the centry. "Arguably the greatest party ever held in the history of New York," he says.

Hyperbole may be a hard habit for dotcommers to break, but Harris says he is a changed man since then. His new venture is a user-generated online TV hub. Operator11.com that calls itself a "Social Television Network." Harris has been interviewed lately about the venture. It is in an "alpha" state but seems to be striving for something between the randomness of YouTube’s uploaded clips and Joost and Veoh’s formal programming. This is personal broadcasting where anyone with a camera and some ambition can set up an online video show.

Of course, being an old Web fogey myself, I was just as interested in what Josh has been up to since the public crash and burn that was Pseudo. Josh had turned the camera on himself in the final days of his involvement and Webcast his life as it spun out of control. He tells me that it took several years literally working an apple farm to get his head back on straight and figure out what to do with a project like Operator11 with the little money he had left after the Pseudo debacle.

"All in, I wound up with enough to fund Operator11 to this point," Harris says. "If I make it, I am back in cash; if not I will be flipping burgers…for real."

And hosting killer parties in the Burger King walk-in freezers, I bet. 

Posted under Michael's Blog

For the umpteenth time we hear that local ad spending online will ramp up

I have been covering the Web since aobut 1996, and so far as I can tell the local interactive ad market has been in a constant state of "preparing to explode." From the first days newspapers and classifieds sections made their online debut, analysts touted this massive amount of local ad money that mom and pop shops and plumbers and psychics were spending on Yellow Page and newspaper listing, local radio and TV spots. Once this multi-billion dollar largesse started pouring online — whoa Nellie, watch out. I cannot begin to count the number of schemes I covered for getting these small businesses online, building them Web sites and gettign their ad dollars into Yahoo Local and YellowPages.com, etc. etc.

Yesterday eMarketer issued its new report on local online ad spending, and it predicted that now, finally, really, no kidding this time, we will see the money start to flow. The $2.9 billion spent this year will grow to $7.8 billion in 2011 says ace analyst Dave Hallerman. Yes, it is tough to get a plumber to advertise online, even though by some estimates over 25% of search traffic is for local services. Local ad spending represents one of the biggest disconnects between actual content usage and media buying. Content online often is local, but advertising isn’t.

In general the local mapping and directory services have been supported by national franchisess like the Office Depots and Best Buys who have local stores but national media buyers. Penetrating that small to medium local business market has been the Achilles Heel of online advertising. What is different now? According to Hallerman, who has forgotten more about digital advertising than I know, "a number of factors are set to accelerate growth in the market: the wealth of small and midsize companies potentially available as online advertisers, the increased use of local Internet sites and services by individuals and the development of local online ad networks connected with local media, such as newspapers."

Well, maybe. Ultimately, the major national advertisers only came online when the suits who bought media themselves came online. My experience covering the first Web bubble was that media and advertising only "got" the Web’s marketing power when the Web finally got to them. Only when the guys in the executive wing of major media and packaged goods manufacturers spent much of their own days connected to the Web did they start putting money here. My bet is the same will hold true for local business. When their own companies are more connected. When their communications with their client base and their partners finally becomes fully Web-centric, then these companies will start looking ot Google AdSense, to YellowPages.com, and to their newspaper ad rep.

Posted under Michael's Blog

The NBCu and News Corp. portal unveils a name and a URL

We imagine that the executives at NBCu and News Corp. decided to be a bit playful and "YouTube-sounding" when they came up with the name Hulu for their much-awaited video portal. But we can’t say we are much amused, although we are sure it went through more focus groups than a new brand of soap. The story broke from Mediapost this morning that Hulu.com would be the brand and the address of this home to NBC, Fox and others’ TV fare. The site is inviting users to put their name on the list for an invitation-only beta test in October, which means the site is well behind schedule and will not coincide with the rollout of new fall programming.

When I spoke with NBCu executive George Kliavkoff in the spring about this plan, hyper-distribution seemed to be the key. Hulu has partnered with YouTube, MySpace, MSN and others to boast an unprecendented Web reach of 93%. They believe that advertisers and users prefer quality, well-produced content. Advertisers need environments they can trust and users can only watch so many cats playing pianos and kids skateboarding into walls. The guys at News Corp. and NBC appear confident that dispersing their shows far and wide but keeping the ads bolted to them is the best way to ensure distribution and monetization. Interestingly, they ar elaso engaging in unprecedented coopetition, in that the search engine and categorization of the portal Kliavkoff described to me would let users mash up their networks and brands pretty freely. The biggest innovation in this portal may be the networks’ (well two of them) new willingness to dissolve the only brand walls. The plan that I heard months ago involved letting other media brands into the mix as well.  

Who knows how well this will fly. I can say that there is a great deal of interest and excitement among media buyers. Social media, user-generated media, etc. are tough for traditional buyers to figure out. Sure there is a lot of interest and experimentation going on here. Google just launched its first tests of in-video ads at YouTube. But on the whole, ad buyers need safe and well-lit places with lots of eyeballs in which to plant their massive budgets. Hulu may succeed with the advertisers more effectively and earlier than it succeeds with viewers. 

If it ever gets to Beta, that is.    

Posted under Michael's Blog

The big budget Webisodic “Afterlife” hopes to vindicate a fallen model?

Anyone remember Digital Entertainment Network? TheSpot? Those online reality series from AOL? Well, long after that original model for Webisodic entertainment crashed and burned, MySpace and Electric Farm Entertainment revive it in a big way this week with the $3 million “Afterworld” series. Fully animated and promising 130 episodes before it is done, “Afterworld" is a big bet from News Corp., if not in cash then in reputation. It is splitting the ad revenue with Electric Farm in lieu of licensing fees, reports Mediapost. For its part, Electric Farm is wisely spinning the sci-fi storyline into mobile and game rights. Sony, which helped underwrite the series, is leveraging the concept into a Sci-Fi Channel mini-series.

But a lot of this still rides on MySpace. Exactly how powerful is the social network in circulating content, building buzz and (perhaps most important) maintaining interest in such a long-winded series? The dearth of interest in Webisodics is too often blamed on the limited broadband penetration before 2003 or so. Now that users have the fat pipes and are also accustomed to watching video online, the serialized model for Web shows seems to be worth a second shot, many seem to think. I would argue that the fate of this content model has more to do with distribution and consumption patterns than it does with technology.

There were some very good Web series back in the day Aardman Studio made the Angry Kid shorts and Tim Burton made the Stainboy series. I always like the Mondo “Thugs on Film” episodes myself, and some of their classics are showing up now on iTunes. The problem is that unless the series are in your face, you forget it is there. Interest drops off after a few episodes. They are fun but not so much fun as to compel a user to seek out new chapters. These interesting ideas ended up with small cult followings on AtomFilms, which is nice but not a breakthrough business model. 

The hope is that hyper-distribution over social networks will be part of the cure. If MySpace can keep the interest up over time and keep the brand in front of a growing network of users through their personal pages and blogs then the model may have a chance. I am not one to doubt the possibilities of new entertainment models. But I think that MySpace has more riding on this project than a few million bucks. It will be a measure of the power of the network as a real media distribution and marketing vehicle.

Posted under Michael's Blog

Nokia just can’t let go of its mobile gaming dream

Admire the tenacity of the cell phone giant for doggedly pursuing the dream of its own mobile gaming platform, but Nokia might want to consider re-branding its N-Gage service at this point. The Swedish mobile firm will unveil the next iteration of N-Gage this week, this time as a platform that works across its Symbian devices rather than as a single dedicated device. The original N-Gage phone-cum-game device is reported to have sold over two million units worldwide, and it did spawn the relatively successful N-Gage Arena service of multi-player gaming. But given Nokia’s hopes for N-Gage and the colossal marketing budget thrown at the brand, it is considered one of the great flops of modern mobile history.

The New York Times tells of the development journey for this new system. After discontinuing production fot he N-Gage in 2005, Nokia refused to surrender the mobile gaming field to others and enlisted the help of Silicon Valley design firm Ideo. The result is a platform that allows users to play more casual games with their friends, sample games before buying, and generally streamlines the experience with fewer features.

The new gaming platofmr will allow third-party development and play across Nokia’s smartphones. MocoNews’s James Pierce says the Times goes a big "hard" on the old N-Gage device but I am not sure you can be too critical of one of the worst phones ever made. I reviewed both N-Gage and N-Gage QD back in the day and they were miserable to play on, to talk on and to carry around. The first model was so bad, and the second "QD" model learned so little fromt the mistakes of the first that some of use wonmdered whether Nokia was just institutionally delusional.

What can be said about Nokia is its willingness to throw a staggering amount of money at a problem and stick with it. The company helped underwrite a lot of early mobile game development with the N-Gage project, and its devotion to mobile gaming helped fuel the industry.

We hope that the new N-Gage platform is considerably more inviting than the first two generations. Still, whether a handset manufacturer really can own the customer when it comes to gaming is another matter. Nokia still seems to think that owners will buy or stick with a phone brand because of gaming, and no research I am aware of anywhere supports such a view. If anything, one of the things the mobile gaming industry has had to learn is how much people enjoy mobile gaming but how little importace they place on it. Most people still play the same crappy game that came with their phone. The gaming industry wants desperately for mobilistas to show the same level of dedication and descrimination here that console gamers have with their platforms. It just doesn’t work that way. A twenty-year-old game with lousy graphics, Tetris, remains the best seller on mobile, hands down. That should tell you a lot.   

See Also

• N-Gage Home Site

Posted under Michael's Blog

Nielsen’s new time-spent metric loves big brands and multimedia

Several months ago when Nielsen//NetRatings eschewed page views as an antiquated metric, there seemd to be few complaints from major publishers. After all, increased use of Web 2.0 technologies like embedded video and AJAX interfaces made the traditional page impression increasingly obsolete.

While reach remains the coin of the realm online, and NetRatings continues to use unique visitors to rank top properties, the new "time spent" metric is giving some sites a lot more to crow about. Looking at the latest July numbers, among the top properties, media-heavy Time Warner has a smaller reach than Google, Microsoft and Yahoo, but its 4 hours of hange time per person far outdistances the competition. Cartoon Network announced today that its site keeps an average user for 77 minutes a month, bringing the site to 26th in the time-spent rankings. This new metric clearly favors multimedia sites, or at least it brings them more visibility in the market. Electronic Arts benefits from its addictive casual game portal Pogo.com, where many soccer moms plant themselves for hours at a time. Cartoon Network has a combination of full episode videos and online games to keep users involved for lengthy stretches. As the major networks bring more of their prime time schedule online for on demand viewing, we may start seeing these networks pop onto ratings charts even if other Web brands gather more raw reach.

The new metric is also giving lower traffic segments cause to crow. The magazine industry traditionally maintains a loyal but relatively small following on their companion sites. In most categories like women’s service, tech, and news, the TV-fueled and endemic Web brands have much broader reach. But as companies like Hachette and Hearst re-tool many of their online brands like CarandDriver.com (Hachette) and Cosmopolitan.com (Hearst) they are bringing more social media and on-demand video to the mix that is designed to keep users there longer. In fact, Chuck Cordray, head of Hearst’s digital unit, recently told me that time-spent at some of the sites is up markedly in the last few months as the sites turn up the multimedia features, and he sees this metric replacing page views altogether.

I think the next step for publishers is to demonstrate to their ad clients that this added engagement translates into benefits for marketers. Does added hang time at a site simply mean that a publisher serves more ads or develops marketing programs that leverage this deeper relationship with users? You can’t just change the metric and expect it to make sense to advertisers. You have to offer a new model as well. 

Posted under Michael's Blog

In which a tech site and a fashion site struggle to manage online video

It was the best of times, it was the worst of times…for online video. Broadband has become ubiquitous and at long last the expectations of users is for a video experience to replace the text-bound Web. But with hours and hours of video clips floating about on all manner of sites, the real issue now is how to organize them in ways that approximate the indexing and cataloging we associate mainly with text?

This is a work in progress, to be sure, but it is interesting to watch two sites from radically different worlds and sensibilities come at the same problem in the same week. CNetTV.com unveiled its version 2.0 which tries to give users more on-demand choice among the growing library of videos than the first iteration of CNetTV. The site moves from an overwrought TV+remote control interface to a page that looks more like a standard CNet page, with the same green tabs and drop down menus that navigate directly to libraries of reviews, shows, tips., etc. There is a search box that brings up video results in a floating window, so you can stay on the current page while you look for other clips. We found that the library of videos is so vast that even when you do pare the results down to a manageable collection of clips, there is still a lot of scrolling and scanning headlines to find what you really wanted. The experience is not quite as efficient as text, in that there isn’t a navigation tree you climb down easily to find the relevant clip. On the plus side, however, the responsiveness is superb. You click on an entry and it just starts playing as if the video already resided on your hard drive. This makes video browsing a reality. The CNetTV challenge is considerable given the range of videos it is producing now. Just filtering reviews from tips is hurdle in a library this big.

On the other hand, CondeNet’s highly stylized ShopVogue.TV is all about a visually stunning presentation. It is trying to video-fy the lush pages of the fashion bible for its many advertisers. You can drill into the site via designer brand, by price or trend, but each option gives you auto-loading video. Mouse-overs animate even the static objects to give the site a feeling of aliveness and interactivity at every turn. Clearly made for browsing, er, shopping, ShopVogue.TV is a little less concerned with surfacing every bit of content than it is about giving you inviting entry points for swimming around in the videos.

And this tale of two sites embodies different approaches to online video. CNet’s second iteration is trying to make video index and behave more like text. It is very task-driven and designed to minimize user frustration with lost time. The ads are very brief and blessedly well paced so that the same ad doesn’t replay every time you start a new clip. It is meant to look and feel like a text site that moves. ShopVogue.TV is making the most of the animated experience. It is aimed more towards a user dwelling in this moving, talking environment. The brands are the content here. Yes it is possible to find a designer, but this site is not the straightest route to finding that cute bag you saw in the Macy’s window yesterday. This site is trying to make information more fun than efficient.

No doubt both approaches have a place online, but CNet does have more experience with online video presentation than CondeNet, and the tendency of Web development has been to go from stylish and fancy to more efficient and simple. It will be interesting to see how both evolve over time.     

Posted under Michael's Blog

CBS puts full shows into mobile on-demand distribution

Giving Web users access to full length TV shows was one thing, but when CBS plants complete episodes of David Letterman’s and Craig Ferguson’s late-night shows on Verizon VCast you know that programmers are just tossing things on the walls to see what sticks. I am still waiting for the first sample of this project to show up on my VCast deck, so I will reserve judgment. Apparently, CBS will parse the hour-long programs into segment chunks for handier viewing. This may not be a bad plan, per se, since it gives us access to specific guest interviews and Letterman’s Top Ten, I imagine. But the VCast deck is unresponsive and an eyesore to begin with (at least on the two LG test phones I was leant), so I am not looking forward to drilling for them everyday, let alone remembering they are there. The Silicon Alley Reporter blogger comments that CBS and Verizon shouldn’t hold their breath waiting for audiences.

I beg to differ. Long form programming actually does have a limited audience on mobile when served intelligently. Sprint Movies is a pay-per-view service that provider mSpot has told me is surprisingly popular. It divides a movie into scores of three-minute snippets. Fans of a flick can review a favorite scene or show it to someone else. For the CBS plan, one can imagine the water-cooler query “Did you catch Letterman last night?” turning into “Here, see what happened on Letterman, last night.” Granted, Verizon’s $15 monthly VCast premium is terribly overpriced and screams for the kind of ad subsidization that is helping Sprint move more video into free access. In fact, CBS mobile head Cyriac Roeding told me last week that Sprint is going to let ads run into its deck-based offerings via Rhythm NewMedia’s ad network.

Carriers and media keep talking about hybrid models of fee-based and free mobile content but I think it is all delusional or just designed to placate operator fears. The major brands are starting to invest heavily in mobile not because they feel they need to follow the user here but because they see a familiar model from the Web and the airwaves evolving. Advertising is the only thing that really promises the levels of revenue necessary to fund mobile video programming. Ad support guarantees wider distribution by lowering the barrier of entry. I and millions of other mobile users will be happy to get our Letterman Top Ten on our cell phones and watch an ad in order to do so? Pay for the privilege of seeing on a handset what we just saw for free last night? Not me.

See Also

• CBS Mobile

Posted under Michael's Blog

Hollywood never misses an opportunity to miss an opportunity.

Posted under Michael's Blog

Hollywood never misses an opportunity to miss an opportunity.

Here’s this huge market waiting to be wooed, 1.3 billion consumers who devour U.S. film, music and videos — and the RIAA and MPAA focus their efforts on prosecuting pirates and persuading the U.S. government to “get tough” on copyright issues.

This is as useless and downright silly as targeting music theft at 58 campuses in the U.S. or playing anti-piracy trailers at the beginning of movies, as the two organizations are currently promoting on their websites. It doesn’t work in the U.S. and it certainly doesn’t work in China.

Think about it. If the Chinese people didn’t love American entertainment, they would they be stealing it? Doesn’t it make more sense to capitalize on that love rather than destroy it?

If Microsoft spent all its time chasing Chinese software pirates, Windows wouldn’t run on an estimated 80% of Chinese PCs (including one I’m using in Beijing at this very moment). In fact, Microsoft used to be completely reviled in China when defending its intellectual property was its primary goal. Now, Bill Gates was quoted in a Fortune article earlier this summer as saying he believes China will be his most important market in 10 years.

The secret to doing business in China, as Gates discovered is: focus on bringing value, not lawsuits; partner like crazy, particularly with the Chinese government; revise your pricing strategy,  make sure you have plenty of help on the ground; and take a long-term view.

Very few studios have gotten with the program in China. Warner Music is one. A Warner executive told me recently that it’s the only big label making a profit in China – partnering with Chinese music companies, producing Chinese stars and sharing in their live performance revenue, and working with mobile carriers like China Unicom to make sure Warner music stars’ ringtones are on mobile phones around China.

Another rare U.S. entertainment standout in China is Philadelphia-based Small World Television which is making a wide range of TV shows in China, including a Chinese version of  “Access Hollywood”.

“There is a great degree of cooperation with the Chinese production companies and it’s not really complicated," SWTV CEO Jon Goodman said in a recent interview with the Hollywood Reporter. "You just have to abide by the programming guidelines there — not unlike the way we abide by FCC rules here."

Instead of griping about what you can’t show in China, why not focus on what you can show – and that turns out to be a lot, when it comes to entertainment.

With iHollywood China, I’m trying to follow my own advice: I’m bringing together a small group of Chinese and American executives to learn from each other and do deals; I’m partnering with the Chinese officials who put on the Beijing International Radio and Television Show, China’s biggest broadcasting show; I’ve developed a two-tier pricing model for foreign and Chinese attendees; and I’m hoping this small event is the harbinger of bigger events in China in the future. Check with me next year, and I’ll let you know whether my plan works.

Keywords: China, digital media, iHollywood China, music, TV

See Also

Posted under Michael's Blog