I’m no big fan of Rupert Murdoch, but I think he’s right about Google and newspapers. Something has to be done about the fact that search engines get a completely free ride sourcing millions of articles on the Web…and then taking most of the advertising revenue.

Murdoch called Google’s actions “theft” at a Washington forum on the future of newspapers. That’s true, although it’s akin to leaving your trunk open and then bitching when your laptop is taken.

The question is how to fix the problem.

Murdoch’s own Wall Street Journal may have part of the solution, although it predated Murdoch’s acquisition of the newspaper.  The Journal is the only mass market newspaper I know of that gets away with charging for its product on the Web. If you want to read the full text of the newspaper online, you need to either have a subscription or pay $50 a year.

You can get away with that if you have a product so valuable people are willing to pay for it. But not if your competitors are willing to provide the same news when you start charging for it.

So one piece of the solution will undoubtedly be a consortium of publications willing to band together to charge — say, accessing all the articles from the L.A. Times, New York Times and San Francisco Chronicle for a set monthly fee.  That, and pressuring Google to give up a small piece of the billions of dollars it makes off newspapers’ backs.

Posted under Michael's Blog

The Nielsen and comScore broadband video numbers cut many ways

Despite industry and analyst worries that broadband video was undermining Americans’ taste for traditional TV, Nielsen and the Cable & Telecommunications Association for Marketing (CTAM) found in a new study that online video barely affects TV viewing time. “A Barometer of Broadband Content and Its Uses Report” saw in March 2007 a 16% jump in online video viewing overall in six months. The survey found 81 million people watching broadband video, about a third of whom say it actually increases their TV view time. Nielsen/CTAM claims that the top media brands also dominate online video usage, with ABC.com leading the TV brands and Yahoo Movies topping the movie category.

The CTAM report may be spinning the effect of online video viewing a bit too much the TV networks’ way, however. The latest comScore report on streaming video in May shows that Google/YouTube sites absolutely dominate the share of streams served to visitors (21.5%) compared to next-best Fox Interactive Media and its MySpace properties (8.1%). Viacom (2.8%), Time Warner (2.2%) ABC.com (1.2%) and NBCU (0.7%) are distant also-rans in terms of streams served, even if many of the TV-oriented videos come in longer lengths. It seems undeniable that online video does shift viewer loyalty and introduce new brands that ultimately can threaten traditional suppliers. comScore’s numbers underscore an inconvenient truth for cable and networks: social media, namely YouTube and MySpace, are the engines that really drive online video viewing. Unless the traditional companies tap into that current more effectively, they will be also-rans.

News Corp.’s Fox Broadcasting is best positioned to merge social media and traditional TV with sister company MySpace. Yesterday, Fox and the Producers Guild of America announced a partnership to create “The Storyteller Challenge” on MySpace, which invites aspiring producers to submit 5-7 minute TV pilots on the social network to win cash and a possible development deal with Fox. The MySpace community will watch and respond to the pilots, of course. Big TV has to do more than just pour prime time onto the Web. The upcoming NBCU/Fox portal and CBS strategies seem to involve hyper-distribution, a determination to put their shows and their advertising everywhere on the Web. But even the ad media buyers who want to see more opportunities to advertise against reliable marquee brands want to see more creativity from the networks. Agency buyers tell me that they are looking for more unique online extensions of TV brands, iterations of prime time that make more sense in the interactive environment than just TV on the Web.

– Steve Smith

Posted under Michael's Blog

Hello? Anyone Ever Heard of the I-N-T-E-R-N-E-T?

While the L.A. Times was busy firing an editor this week for having an affair with Brian Glaser’s publicist and then hiring him as a guest editor, much more momentous things were happening in the newspaper business.

Billionaire investor Sam Zell was reportedly bidding $33 a share for the Times’ troubled parent Tribune Co.;while newspaper analyst John Morton and media economist Miles Groves were shutting down the 31-year-old Morton-Groves Newspaper Newsletter, the newspaper business bible.

"I’m getting tired of producing painful forecasts,” Groves told Forbes. "Recently, as down as they get to be, they never seem to be down enough.”

Well, that’s because Groves is looking through the wrong end of the binoculars. Yes, most newspapers will die. But news and journalists will not die. They will migrate to the web.

If you don’t believe me, precisely what are you doing at this moment? OK, my blog isn’t exactly news, but you see my point.

Just because newsprint dies doesn’t mean news dies, any more than NBC and Fox’s programs die when they migrate to the web (see NBC and Fox’s Online Deal: If You Focus on Google, You’re Missing the Point and What NBC and TV Learned from Music’s Mistakes).

The problem with the newspaper business is not declining sales. That’s just a symptom of the industry’s stubborn resistance to embrace the flight of readers to the web. Advertising, want ads, event calendars, auto buying — it’s all there, guys, and people are monetizing it. Why aren’t you?

See Also

• AP: Billionaire Zell bidding for Chicago Tribune parent company
• Forbes: Media Newsletter Closes

Posted under Uncategorized

Once upon a time, a long, long time ago, television used to be free. Three big broadcasters — NBC, ABC and CBS — gave away all their content for free. Everyone watched it. Advertisers paid billions. And everyone was happy.

Then along came cable and satellite. They introduced pay TV to the masses, who happily paid billions of dollars for subscription television and stole the networks’ market. The poor networks, bereft of viewers and advertisers, withered and died.

I think not.

Today’s deal between NBC Universal and Fox to slap free prime time shows and movies  Yahoo, MSN, AOL and MySpace – reaching hundreds of millions of viewers — is nothing less than a return to broadcast television’s roots.

Most newspapers are suggesting that the main rationale for the deal is to "challenge Google Inc. and its YouTube video-sharing service" and "blunt their incursion into the entertainment business," as the L.A. Times said.

That misses the point. The main rationale for the deal is to reclaim a huge chunk of advertising dollars from advertisers like Cadbury Schweppes, Cisco Systems Inc., Intel Corp., Esurance and General Motors, who will be supporting the venture.

Granted, that Google has slurped up a third of online advertising dollars, as research firm EMarketer says.

But hello. Remember online advertising is still only 10 - 20% of advertisers’ spend. Google has zero percent of the TV advertising market, last I checked. And NBC, CBS, ABC and Fox were doing quite well, even in a fractionalized universe.

Now, if you’re GM, and you want to reach millions of customers, what’s more attractive? A TV audience of tens of millions of people and hundreds of millions more online accessing full-length, rich streaming programming?  Or hundreds of millions of people who snip up pieces of their favorite NBC show and share it with their friends?

Gee, what do you think people who watch those little snippets will do? They’ll either go to the NBC Universal/Fox site or they’ll watch it on TV.

See Also

• L.A. Times story

Posted under Uncategorized

Fox wants to protect media content and grow MySpace at the same time. Tough job!

MySpace’s apparent attempt to prevent users from embedding tools such as music, video players and ecommerce engines in their site doesn’t make compute financially or logically.

At stake, the New York Times reported today, is the ability of MySpace and parent News Corp. to ensure that only they  capitalize on the 90 million visitors to MySpace each month.

According to the Times, MySpace is already alienating some of its users, who are attracted to MySpace by its free-wheeling community. They don’t take kindly to an entertainment giant’s attempts to protect intellectual property, whether its copyrighted or not.

So when MySpace shut down popular MySpace blogger and singer Tila Tequila’s web store and music player on Sunday, it undoubtedly annoyed a lot of people.

The risk is that these users will flee MySpace for another site where these restrictions aren’t imposed. That’s not a far-fetched proposition. How many people visit the legalized Napster site today compared with a few years ago?

And of course, if MySpace’s visitors flee, so will advertisers.

That’s the financial piece.

The logical piece is this: embedding a tool on MySpace is as much an infringement of copyrights as embedding it on your own site. That is, not at all. The embedding only becomes a problem if you start playing uncopyrighted material. Presumably, Tequila was only playing her own work on the music player.

Is MySpace really going to prevent people  from getting creative on its site?

You could argue that Tequila may have had the right to play music on her site, but she had no right to sell it. Maybe not. But doesn’t it make a lot more sense for MySpace to approach her (and others) and work out a small "usage fee" than to banish them? That, in fact, is exactly what mobile carriers in Europe (and a few in the U.S.) do with people who want to sell using the carriers’ bandwidth: they charge them. And trust me, they’re making a fortune.

If News Corp. doesn’t want its MySpace asset to evaporate, it  needs to ensure that MySpace’s freewheeling community stays freewheeling.

See Also

• NYT: MySpace Restrictions Upset Some Users

Posted under Uncategorized