Search results matching tag 'digital media'

Media owners and the move to paid content

1713999 — Fri, 16 Oct 2009 17:20:00 GMT

Well, it looks like they're going to give it a go. With display ad revenues not enough to make substantial, or indeed any, profit, according to a survey from the Association of Online Publishers, around 70% of online publishers in the newspaper, magazine or TV industries will pay for content online.

I believe that a lot of them will be heading for a fall. There are simply too many of these mass media dinosaurs providing content that is too similar and usually available for free somewhere else. But admittedly, there are some big brands here with sometimes over 200 years of audience building, so surely that will count for something?

The truth is that no one really knows but last week a paidContentUK/Harris Interactive poll showed that only 5% of people who read a news site at least once a month would pay for online access. Though if a free or discounted subscription to a printed paper were thrown in as well, that would rise to 48%. A huge leap. As a Guardian reader to has seen the price of the paper hit the £1 barrier for the first time, I find this idea is particularly appealing and as newspapers make far more money from advertising that cover price, it could be an option. Albeit surely quite a radical one.

In the Guardian last week Andrew Freeman, Harris's senior technology, media and telecoms consultant, said that this model of combining charges together for printed and digital content is "an interesting possible picture of the future": "The value of this type of reader, engaged with the content, and (because of the subscription structure) much more likely to be brand loyal, would be massively higher to advertisers. If newspapers can deliver this sort of model - combining the best of both media within a paid-for relationship, then the future will be more certain, but certainly different."

Unfortunately the bad news is that "when asked the maximum amount they would be prepared to pay, respondents who read a free news site at least once a month gave us [the poll] the lowest possible amount in each category - annual subscriptions under £10, a day pass costing under £0.25 and per-article fees of between 1p and 2p". I still believe that there are not enough newspapers readers that are loyal enough to a brand for all the current national brands to survive this change, and for those that survive this digital/print mixed subscription could be the way forward but these numbers don't really seem strong enough to prop up the bank balance of national newspapers, especially when ad revenues will be affected by the fall in traffic that will surely come from putting up a paywall.

Moreover, yesterday in the Guardian, the same poll asks about how those payments would manifest themselves and it would seem that the preferred method of carrying out this revolution (and it really is no less than that) is by no means decided.

53% of consumers said that they would prefer a subscription of up to a year which will upset the champions of the latest media wunderkind- the micro payment. Paying a few pence per article is the method that many have put forward as something more appealing to consumer especially since Google revealed a fortnight ago that they would roll out their out system of micro payments, possibly as an extension of Google Checkout, in a document sent to the Newspaper Association of America in response to a request for paid-content proposals that the association sent to several technology companies.

Freeman says, ""There's been a lot of buzz about micro-payment recently, and some prominent players, like Google, have moved into this field, but there are massive challenges: and not just technical ones. From a simple business point of view, micropayments are disproportionately expensive to administer until you have an enormous volume and value, it just won't be worthwhile. If consumers are going to give up their preference for single-subscription payments they can more easily check and monitor, they will need to have real confidence and trust in the brands they use. Micropayments will probably benefit only the very largest of companies."

Not good news for all but very few large scale media owners who want to make money from content. Long established institutions will fall before a system is settled upon, that much seems certain.

An Industry in the Dark?

1713999 — Mon, 28 Sep 2009 09:19:00 GMT

It has been another interesting few weeks for the music industry. In the same week that Spotify’s iPhone app has stormed to the number one spot of iTunes Top Free Apps within just 48 hours of Apple approving it, we have had Sony and EMI come out and slam Virgin’s plans to offer a subscription based music download service.

This of course this is nothing new from an industry that is determined to avoid change of any kind. The industry has even been given renewed confidence in recent months as Peter Mandelson waded into the debate by announcing the government’s plans to cut off the internet connection of those who file share - a government decision even more extreme than Lord Carter’s recent Digital Britain report. Mandelson’s intervention may well have been influenced by recent meetings with certain music industry figure heads; but it highlights (as some commentators have suggested) that this really is a case of an analogue man living in a digital world. Trivial details such as who is going to be responsible for regulating this across ISP’s and not to mention who is going to pay for it, as usual, seem to have been brushed aside as minor formalities.

Whilst this Government backing may show signs that the music industry is winning its battle to desperately carry on with business as usual, I feel it may be short lived. In recent weeks we have seen YouTube lift its block on music videos after the PRS and Google came to a licensing agreement. Whilst the lump sum has not been disclosed, I wouldn’t mind betting it is a lot less than the PRS was initially demanding. However, a deal was always going to have to be struck as the prospect of cutting off one of the industries key marketing channels was never a long term solution.

You might hope that this is a sign that the industry will start to face the realities of the digital world it has resisted for so long. This however will not sit easy with the major labels; they have for too long enjoyed far too much control over their distribution channels and avoided any deviation from their long established ways of doing things. Losing grip of even a little bit of this power does not sit easy with them. However, no matter how much government support they are able to drum up, a business model that relies on harassing, bulling and even suing its customer base seems destined for failure.

It has of course been obvious for years that the music industry will eventually have to move with the times and face up to a changing market which is seeing their revenues dwindling. What they seem to be missing is that people sharing and accessing music for free has always been a vital life blood of the music industry. Ok 25 years ago you had to sit down and make a mixed cassette tape, but the point is music has always been driven by a buzz that is created from people talking about and sharing music. The technology may have changed the scale on which this is possible, but this has also expanded the potential.

People have to make living and it is yet to be seen if the likes of Spotify, Virgin and others can actually turn a profit out of subscription or ad supported revenue. My guess is that the industry will have to start embracing a more varied approach and spread their interests across licensing, ad supported revenue, subscription, merchandising and live music promotion. And yes there may even be a case that people will pay for a certain amount of digital tracks, although I feel a higher quality offering than is currently available will be needed. Naturally the major labels will continue to lobby for the government to support their out dated business models, but sooner or later they will have to take their heads out of the sand and come to terms with the fact that a more creative use of digital channels is the future of their industry.

The end of the beginning for Google's Content Network?

1713999 — Fri, 28 Aug 2009 15:04:00 GMT

Amidst all the excited talk of Spotify iPhone apps and Apple tablet devices this week you just might have missed some interesting news from our friends at Google (and no, I'm not referring to the fire in their London office)...

On Tuesday Google quietly announced on their AdSense blog that they plan to open up their Google Content Network to third party networks as a way to maximize advertising revenues for those publishers using AdSense as a revenue stream. For publishers this is definitely a boon but from Google's point of view this is a surprising move - on the one hand it will obviously generate incremental revenue as it effectively places a whole range of additional advertisers on the network without any work yet at the same time it weakens their position slightly. In effect they have taken some of that niche reach out into the long-tail that some of the other networks lacked and handed it straight over to them. You could well ask then - given that any of these third party networks will have additional reach, why advertise on Google when you can simply advertise on one of these (yet to be announced) third-party networks?

In reality, as always, things are a little bit more complicated than that. Firstly publisher sites have to opt-in to these third party networks so Google won't exactly be handing over the keys to the kingdom. As an agency we would also generally point out Google's advantages, since their network gives advertisers complete transparency and control over where they appear, where conversions come from and what the costs are. This generally means that a well managed campaign on Google probably trumps a campaign run through a third-party network (at least in terms of like-for-like performance on the same sites). The networks also have the ever growing challenge of assuring quality environments for advertisers and this move certainly won't make IASH accreditation any easier to achieve.

What makes this move interesting though is that it positions Google one step closer to taking a role as an ad-exchange, since they are now able to broker out your advertising space much more widely (and obviously place ads too should you want). As most other ad-exchanges seem to fail to effectively communicate their position this puts Google in a very strong position, particularly with their reach into the longtail... I can't help but wonder if the next move will be for them to flip this around on its head and open up the third party networks to advertisers for management through their interface.

Would you pay to read news online?

1713999 — Fri, 07 Aug 2009 15:55:00 GMT

Rupert Murdoch seems to think that you will.

After the huge financial losses just announced by News Corp, Murdoch has decreed that, possibly from as soon as next year, he will charge for all his newspaper websites including The Times and The Sun. It isn't clear whether this will extend to broadcast news websites such as Sky News.

It has been obvious for some time that the newspaper industry is at a crossroads. The old-new-model of drawing in as much traffic as possible to gain revenue from display advertising has been found to be unsustainable - I say old-new because, well, we've been here before haven't we: back when paid for content was deemed to be a broken model and the pay-walls tumbled down the first time. In addition to News Corp, the Telegraph, Guardian and Mirror Groups have all mooted charging for content but as Michael Beecroft, head of digital trading at Mediaedge:cia Global, concedes: "In many ways the horse has already bolted, and trying to close the door on it now will be very tricky indeed."

This model may work for some specialist content, such as the FT or the Media section of The Guardian, but in general why would anyone pay for content they can get for free elsewhere?

Murdoch, Sly Bailey and others speak about how quality journalism is not cheap but what exacly denotes "quality" and who is the judge of that other than the audience? In a world where the media landscape is increasingly fragmenting, why would you pay for frontline heavyweight news items when the BBC continue to provide that for (what is perceived to be) free? And when it comes to the so called celebrity ‘news' that the tabloids pedal so well, why would you pay for The Sun when you can go to Perez Hilton? Why go to newspapers for sport news when you can go to Cricinfo, Football 365 or Planet Rugby?

Even most of the content from the Guardian's Media section can also be found with a subscription to the NMA or Media Week.

Just last week, Chris Anderson, the editor of Wired said in an interview to German news website Spiegel:

"In the past, the media was a full-time job. But maybe the media is going to be a part time job. Maybe media won't be a job at all, but will instead be a hobby. There is no law that says that industries have to remain at any given size. Once there were blacksmiths and there were steel workers, but things change. The question is not should journalists have jobs. The question is can people get the information they want, the way they want it? The marketplace will sort this out. If we continue to add value to the Internet we'll find a way to make money. But not everything we do has to make money."

The UK has always had more national newspapers than any other country, and the arrival of digital has just exacerbated the situation to the point where the market is unbearably crowded.

The Independent, with the lowest readership of any national, has been under threat for some time following huge losses, with the Daily Mail & General Trust rumoured to be interested in rescuing it. The failure for such a move to materialize to date probably says more about The Independent that anything else.

Moreover, The Observer, the oldest Sunday newspaper in the UK, published since 1791, is facing the threat of either closure by the Guardian Media Group or being re formatted into a weekly magazine following the same heavy losses suffered by the other papers (The Observor actually being one of the papers that is holding its weight better than others). I would find this extremely sad, no other Sunday paper quite caters for the same readership (though this may yet be its saving grace- Guardian Media Group is owned by a not-quite-for-profit organisation for a reason) but we all should come to the realization that in the next ten years a lot of household newspaper names will either change beyond recognition or disappear completely.

Ultimately we have been here before. People may be questioning the business model for free content but it is worth remembering that the model for paid content turned out to be just as unprofitable back at the turn of the decade. The fundamental problem is that there is no longer a scarcity of content and without scarcity economics doesn't really work. One thing is for sure though - in the words of Dylan, These Times They Are A-Changin'.

To click or not to click....

1713999 — Fri, 31 Jul 2009 13:47:00 GMT

Some hot debate about the importance, or not, of the click has been had this week. We've been mulling over why when no other advertising medium expects consumers to leave what they are happily doing in that moment to interact with a brand, online continues to value the click as the key sign of success. When you watch a TV ad you can still catch the second half of Coronation Street without the media agency or client feeling that the ad spot has been wasted. How then, within what is hailed as the most measurable of media channels, can we make sure we are measuring the right things?

This question and that of a "universal trading currency" are not new. Despite some important steps in the right direction, it seems as an industry we are still some way from agreeing a currency that allows us to trade and evaluate performance across all media channels with consistent definition of audiences and insight into impact.

While this topic inevitably rumbles on, we need to continue to work hard with clients to develop our understanding of digital channels in context - whether that be by using engagement mapping reports through the adservers to better allocate conversions to contributing channels, further integrating analytics data with marketing or ensuring brand studies include digital as a channel rather than an add on.

Alternatively we can follow Pringles lead and focus on clicks for kicks!

Flogging a dead horse

1713999 — Fri, 17 Jul 2009 16:11:00 GMT

The last few weeks have seen polar opposites in terms of luck for Phorm, the personalisation technology company. On one hand it appears as though both BT and TalkTalk have put their plans to implement their technology on hold (I say on hold as apparently the contracts are still in place). Yet on the other, they received yet another cash injection of £15M to help support their trials in other markets.

The digital industry has long viewed Phorm with distain following the supposed illegal trials in the UK and it is these events that have tarnished the brand and opened up the discussion to the wider population. When the likes of the BBC and Guardian are talking about it, you know you've got a problem and it is almost certainly having a negative impact on public opinion towards behavioural targeting in general. The interesting element about their plans in other markets, specifically the Korean trial is that they've learnt from their mistakes and consumers are given the opportunity to opt-in from the start. To quote the press release (PDF link), "KT customers opting into the trial will not only benefit from existing features such as enhanced user privacy and more relevant advertising, but will also be invited to experience an innovative new consumer proposition...".

Now you would have expected them to learn from their mistakes in the UK but this change also risks undermining their whole product. With the service being opt-in, is the opportunity for some free software (which is hardly scarce and not particularly exciting) and more relevant ads going to be enough to convince consumers to sign up? Clearly the big telco's have a very strong position and if they put their marketing weight behind the trial then signups might not be an issue but from an advertiser's perspective being opt-in reduces the size of the audience and is also likely to be skewed to a certain demographic. Great if you want to target the naïve first time web user but not so good if you want to target professional consumers, especially those using mobile for a large proportion of their web use.

So, can Phorm survive? In the UK it looks as though they will find it very difficult to change public perception and rightly so, their brand has been tarnished and they are unlikely to now spend the money needed to change this view. Even with the recent cash injection they need to work on their costs - Brand Republic recently revealed that Phorm have a burn rate of $1.8 million dollars a month, not great when you have no revenue streams whatsoever. However there are still another 194 countries in the world in which to run the service and it is likely to be this fact that has prompted investors to continue to inject money in the company. Why else would you continue to invest in a business that has received so much negative coverage?

Spotify: The future of UK music?

1713999 — Fri, 03 Jul 2009 14:28:00 GMT

Since its beta launch at the end of last year the music streaming service Spotify has quickly become a bit of a "fans" favourite, offering a wide catalogue of music to its users to listen to for free with relatively little interference from advertising. With an interface that ingeniously 'borrows' (robs blind) from iTunes', it begs the question: is Spotify the future of music in the UK?

There seems to be growing evidence to suggest this could be the case - take a walk through the LBi offices in London and you are unlikely to have to move far to find someone inflicting their 'Friday mix' Spotify playlist on their colleagues. As Spotify focus on rapidly sourcing additional record labels and content for their library and growing their revenue streams through a variety of non / low invasive techniques they look set to become a major player in music distribution in the UK moving forward.

Obviously the real money comes from users actually paying for a service, but based on a recent presentation they gave at the LBi office in London it is clear that Spotify are not foolish enough to make these users the entire foundation of their business model, instead ensuring they also develop a robust ad platform that takes the advantages and disadvantages of the medium into account.

Brands are being encouraged to go beyond thinking about pure display / audio creative combinations and to actually utilise the product - creating associated playlists and advertising that links into "Spotifyed" branded landing pages and back out again, encouraging a certain level of engagement from the user that should actually enrich their experience. Best of all they have engineered their ad delivery system so that free users are a) not bombarded with ads and b) only served ads when they will be seen and heard by their users. They do this by restricting adverts to times when a user is active in the Spotify application. Planner Buyers - I hear you breath a sigh of relieve, your buy will not be served to a user that is working on their spreadsheets - your ads will be seen!

The flip side of this is the premium part of the model and the ways the business plans to drive take-up for this. This is where things gets interesting - rather than just getting rid of the ads, premium subscribers will shortly get access to an iPod touch, iPhone and smart phone application that will allow them to not only stream music wirelessly on their mobile device when they have access to wifi but also store music locally in the app to access when they are somewhere without wifi, for example on the tube on the way home from work.

I love the sound of this and I believe a lot of people will certainly take Spotify up on this offer BUT I can't help feeling that UK users are getting a poor deal compared to our friends over the pool. Microsoft's Zune Marketplace has given what is essentially the same functionality but in addition to being able to store music locally it allows you to download a number of tracks each month to keep, even after you end your subscription - plus you can wirelessly share tracks to a friend's Zune player for a limited number of plays so you can sell them on the wonders of whatever new track you have just found!

I guess to summarise: well done to Spotify for giving UK users a great service - this is something the music industry needs to monitor closely if it is to save its quickly diminishing revenues. Ultimately the proof is in the pudding however... Will these innovative commercial models add up to enough to keep the music industry in the black?

Not another social network

1713999 — Fri, 26 Jun 2009 12:51:00 GMT

Virgin Atlantic have announced a Travel social network as part of their 25^th Birthday, aimed at the ‘inspirational' travel market. Much like the BA Metrotwin, which was specifically created for the to London-New York traveller, the vtraveller is aimed at frequent flyers. Now I am not about to go about disputing the power of social media or the idea of having a branded social network. What does concern me is what brand owners think can be achieved through branded social networks and how long they think users will stick around for if they aren't properly supported, particularly if the branded social network's unique selling point (in this case sharing pictures and travel experiences) is not really unique at all!

A social network is a great way of getting your users together, but getting them there is only half of the battle - you have got to get them to stay as well. How? Social networks should address an unmet need, not replicate what works for others. A great way of driving engagement with your brand is by ensuring you provide feeds to share content with other social networks - it's not always necessary to reinvent the wheel, just hitch a ride with a passing juggernaut, in this case Facebook and Twitter!

When brands decide to create social networks they should try and keep the branding as subtle as possible and have something unique to offer, like HMV's Get Closer (full disclosure: Get Closer was LBi's work, not that I am biased!) or Disney's Disney Xtreme Digital. Get Closer offers music fans a unique sharing experience and exclusive music treats whilst the U.S aimed Disney My Page is aimed at providing a safe social environment for a pre-teen audience - a demographic many other social networks avoid due to the legal issues surrounding under 14s.

To get the most out of social media it is vital that you don't push your brand onto users but instead aim to pull in users voluntarily, giving them a unique (softly) branded experience in a comfortable social environment. If you want an example of how things can go wrong when brands go against this advice just look at Habitat - you couldn't have missed the furore over their recent Twitter spamming, where an over-zealous intern used non-brand related hash tags that were trending in order to drive views of their tweets. Note: If I'm looking for Tweets about the Iranian opposition leader, I really do not want to know about your latest offer on garden furniture!

Of course when managed well branded Twitter accounts can be a great example of how to use social media. Twitter enables you to follow users mentioning your brand and provides a great tool for monitoring your brand perception in a real world example. Where Twitter works best is when the brand has a legitimate reason to use it - on the DR end Dell have famously made millions from tweeting specific short-term offers whereas Innocent Drinks and ASOS have manage to drive terrific brand engagement simply by being themselves and talking to their users like real people.

It is more important than ever for brands to be considering how they position themselves within the social media sphere. Ultimately it's all about being believable - if you have no legitimate reason to exist within a social space then think carefully before you move. With so many social networks around branded networks have to ensure that they have a real reason to exist in the space before they invest, otherwise there is a risk all that investment will end up going into a network that users use twice and ultimately can't remember their password for.

Jack of all Trades

1713999 — Fri, 15 May 2009 17:45:00 GMT

Going back a few weeks, I wrote about "who owns social media?" The answer to that particular piece being that social media cannot operate in isolation and to be successful, multiple different skills need to be blended together. To add some more fuel to the fire and to broaden this a little, we've been discussing internally the merits of a specialist digital media agency versus a full service one.

Paid Search became the domain of the specialist agency when a flourish of agencies were set up focusing all of their resources on that particular field, developing expertise as a genuine point of difference while increases in technology took away some of the man-hours to increase efficiency. Media Planning & Buying has existed in its own right in the traditional sense and that has followed in digital with large agencies dominating on the pretence that they can achieve greater buying economies of scale with an increase level of spend.

The disadvantage with specialist agencies comes from the nature of a ‘specialist' - someone who is devoted to a particular occupation. They can be very single-minded due to the expertise and experience that they have in that particular field, however this can lead to them having a narrow and restricted view on advertising and indeed marketing in general. To that end specialist agencies are beginning to broaden their services, such as The Search Works merging with TradeDoubler to offer a more holistic approach. It's also been said a million times before that people consume media differently now than they have in the past therefore surely their behavior requires an approach from the people who connect brands with consumers which mirrors this?

Naturally I'm inclined to believe that a full-service environment, with all disciplines together under the same roof with central co-ordination of these disciplines, is the way forward. This way, full-service agencies can provide independent, agnostic advice on aspects such as the budget allocation between the different disciplines, or advise on the impact that Display actually had on persuading one of their customers to convert online through a different channel.

Moving away from media in isolation, we're seeing digital creative agencies such as AKQA launching their own media divisions to combat the need for digital expertise in all areas under one roof, i.e. Media and Creative. As the IPA's newly inaugurated president, Rory Sutherland recently addressed the challenge of having media planners who do not have experience in dealing with creatives, highlighting the need for a more rounded approach:

"It terrifies me that almost nobody under the age of 35 in a media agency has any experience of working with creative people and vice versa; hence fewer and fewer people understand ... the whole equation of business"

Coming from LBi it would be easy to accuse me of blowing my own trumpet but that would be missing the point. Ultimately co-operation is what is important - we are all better if we are working together. If a business is able to get a group of specialist agencies working together towards a common goal then that is fantastic, but in practice this rarely happens and it is most achievable within a full service environment, with each party fighting for their share of the budget.

iTunes kiosks coming to an airport near you?

255762 — Mon, 11 May 2009 13:29:00 GMT

A patent filing uncovered by industry blog AppleInsider shows that Apple has plans to develop a series of wireless iTunes 'kiosks' or download hubs where users can load content on their iPods before travelling.

The 19-page patent, filed in November 2007, reveals that Apple wants to develop an iTunes Store distribution hub, that could potentially set up shop in airports and train terminals, and would allow wireless downloads of music, films or television programmes for commuters.

The kiosks would be able to detect an iPod in the immediate vicinity, allowing users to download content without wires or cords, even in areas without wireless internet access.

The wireless component would mean that users could purchase content without having incur roaming charges on their devices while waiting for downloads to complete.

Apple said in the patent that the kiosks would be useful for travellers who wish to load their iPods, iPhones or other handheld devices before boarding a flight, ship or train.

The notoriously secretive Apple has not previously mentioned the iTunes kiosks, but it would undoubtedly prove to be a lucrative source of revenue, especially with the right branding and selective location. Hopefully this is one that doesn't get swept under the Apple rug.