For  an example of how  a national news operation  might  retool itself  in the digital age,  take a  look  at how NBC is running  its 10 owned-and-operated affiliates. Through a blend of professional  reporters  and repurposed national  material, its relaunched local web operations  have grown their audiences four-fold in ten months to  20 million unique visitors Yelp, according to Forbes.  That means it reaches almost as many people as Yelp,  which  has been around  for five  years.

News organizations have  a built-in  advantage  over places like Yelp or Craig’s List: people  will  come around even if they don’t want to buy  or  sell  something.  Imagine what happens when you combine  the power of both.

Posted under Michael's Blog

In recent years, NBC Universal’s mobile strategy has focused largely on helping carriers get its content to consumers.

Now that strategy is subtly changing.

Carrier partnerships are still "critical to what we do," Salil Dalvi, NBC Universal’s general manager for wireless said at yesterday’s Mobile Entertainment Summit. "But we also think we need to go out to market with great integration between web, TV networks and mobile phone."

Take NBC’s hit show Heroes.  This year, fans have had a series of new cross-platform ways to interact with the program, including  a toll-free number for the fictitious paper company Primatech Paper revealed during the Jan. 22 episode; and the launch of a dedicated WAP site designed to give them "two-screen" interaction with the content, including downloads and texting campaigns.

At the same time, the linear show can also be viewed on the NBC2Go channel on Verizon and soon AT&T.

The campaign points to how video and other rich media content will increasingly move beyond the closed decks of mobile carriers to the mobile Internet.

Until now, U.S. carriers have kept tight control of mobile content on their networks, fearing that allowing third parties to freely create their own mobile services will cut them out of the revenue stream.

That attitude means that "content owners do not see majority of money that goes to carriers", Dalvi notes, contrasting with the much more equitable split programmers get in cable or satellite. 

It creates a disincentive for Hollywood studios to make their content available on mobile — to say nothing of small, mobile-only content creators struggling just to survive.

The burgeoning off-deck revenue of European carriers suggests that American operators’ fears of being locked out of the mobile content chain are groundless. They may end up with a smaller piece of the pie. But the pie will be orders of magnitude greater if they loosen their grip.

See Also

• NBC’s Hero Site
• NBCU rolls out Digital2Go mobile initiative
• Mobile Entertainment Summit

Posted under Uncategorized

I’m already confused

Okay, so let me get all of this straight. NBC pulled out of iTunes because it couldn’t make enough money over there. Bye, Bye "The Office" downloads. But now,the company announces it will try its own ad-supported download model, NBC Direct, where users can view recent episodes of prime time shows and even download them, and their advertisiong wrappers, to devices. Okay, but then they will still have their streaming shows at NBC.com. And then there is Hulu.com, the partnership with News Corp.com that will syndicate and stream episodes across multiple media companies.

Well, all except CBS, apparently, because that company has its own distribution strategy, which involes scattering its properties far and wide. It declined an early offer from NBC and News Corp. to join the Hulu.com project. And it doesn’t look as if Les Moonves is all too eager to put CBS properties into whatever Hulu is going to be. Meanwhile ABC/Disney, which has been a bit quiet in all of this, announced it would distribute ad-supported prime time episodes initially through AOL’s portal in order to preserve the quality experience.

Who’s on first? What’s on second? I don’t know is on third?

It is understodd that the befuddled networks need to experiment with different distribution paths in order to find when, where and how exactly this famously fragmenting American audience wants its media served to them. But consumers don’t distinguish anymore among the networks. They don’t identify shows with networks, except for highly targeted cable brands. So the consumer comes into this year wondering where are the shows I want? Some are on AOL, some on Hulu, some on this NBC Direct? And whatever happened to all that stuff I was used to getting at iTunes? Heroes is hared enough to follow when I do nail it down on a single screen. Don’t add to the pain by making me hunt for it.

The current state of TV distribution on is dizzyingly inconssitent and it may well leave the consumer and the market more confused than anything else in the short term. You don’t have to turn your TV on a different way to get CBS or NBC or ABC. And we shouldn’t have to unravel the business strategies of major media companies before figuring out how and where to donwload our favorite show.

Posted under Michael's Blog

There is more to the Apple/NBC dispute than pricing

After NBC announced last week it would not be renewing its contract with Apple to distribute its premium content on iTunes, most industry insiders understood this to be a pretty big bite out of Apple’s online store. After all, various sources peg NBC being responsible for up to 30% of video sales on the service, with shows like "The Office" and "Heroes" among the top sellers. But on Friday, Apple bit back announcing that it would not carry this season’s new shows from NBC because it didn’t want to end their runs abruptly when the contract ran out later in the year. 

While Apple claims in its provocative press release that NBC wanted to double the wholesale price of its episodes, Mediapost reports that the negotiations were more complex than that. NBC was looking to tweak disappoiting revenues from the iTunes partnership by bundling episodes with NBC Universal film offerings as well. Apple felt this would "confuse" the market. NBC came back with its own release arguing that Apple’s business model for iTunes is really about selling hardware, not media.

This is an argument that has been a long time coming. This situation very much resembles early TV and radio, when the hardware makers considered on-air programming simply the sweetener that sold the TV and radio sets. While it is true, Apple is a hardware company, it is also now a media company and it needs to better understand the eco-system that supports ambitious programming.

On the other hand, NBC’s pressure on iTunes may have something to do with its own disappointing up fronts and a weaker-than-expected reception by media buyers for digital. This was one that everyone should have seen coming too. The major media companies were coming to the upfront table with all of these prime time shows running online, as if they were supposed to sell themselves. But the industry is still trying to sort out what kind of ad formats work on digital video, how much people really want their prime time on desktops, and what reasonable pricing should be.

This war is only beginning as distributors and content providers both struggle towards workable business models for digital video. The fact of the matter is that no matter how many eyeballs veer online, the digital ad market still only produces a fraction of the revenues that TV can. How digital distribution supports a robust eco-system of prime time prodcution remains an open question that neither Apple or NBC can answer.     

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

Major media companies are on a buying spree, but are they cost-conscious?

"Do you know any companies we might be interested in?" This questions, or soemthing much like it, has beern posed to me on more than one occasion in recent months by the heads of digital units in large media companies. People are shopping, and the old media companies that once over-invested and then sniffed cynically at digital media are back to the table. Hearst puchased both Kaboodle and UGO in recent months, expanding both their audience into young male miches and their business into shopping directory. CNet has a good overview of recent activity in the space.

But are the big media shoppers themselves well-informed buyers? The article suggests that the NBCU buyout of iVillgae and Conde Nast’s purchase of Reddit have been disappointments. Even the News Corp. big buy-in of MySpace seems a little less promising now that Facebook is in ascendance. Well, that may be taking the point a bit too far. The success of the digital campaign for "The Simpsons Movie," much of which was fueled by innovative uses of MySpace, seems to show where the synergies can happen.

Mark Glaser has a good look at Hearst pursuing a start-up model in re-launching its magazine sites at his MediaShoft blog.

I think old media buying up new media is a good thing. If anything, the new companies help educate the old in the ways of interactivity. The moguls admit that the world is shifting beneath their feet and they need to acquire the audiences that smarter fledglings have amassed. While Web acquiaitions once were a matter of hubris, now they are a matter of humble necessity.

Posted under Michael's Blog

by Shelly Palmer

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

OK, we’ve been bragging for years that big deals get cut at iHollywood Forum events. Problem is that journalists, bless their souls, don’t usually say WHERE deals are made — just who made them.

But the San Fernando Business Journal kindly gave our venue a leading role in NBC and Break.com deal.

"Matthew Evans and Keith Richman spent nearly an hour on a Digital Media Summit panel discussing the future of the Internet video market but it was what the two men talked about afterward that was most important," author Mark Madler wrote. "Two hours after the discussion ended during the March 13 event, Evans, vice president of digital media for NBC Universal, and Richman, chief executive officer of Break.com, knocked out a deal at the historic Roosevelt Hotel in Hollywood to sell an original NBC-produced show for Richman’s Web site."

Thanks, Mark. In return, I’ll attribute the news to you!

See Also

• Mark Madler’s San Fernando Business Journal story
• Digital Media Summit

Posted under Uncategorized