4sight

Down On The Farm(Ville)

If you think some people in your station or office are unproductive because of an addiction to computer games or Facebook, the combination of those two - FarmVille - is probably the culprit.  The creation of Zynga CEO Mark Pincus, Farmville is an amazing Facebook game that has now sucked in more than 70 million monthly players, vying to create virtual farms using digital tractors, animals, and other tools - all of which are on sale.  According to USA Today, FarmVille generates lots of revenue by selling these virtual goods to players.

Now, FarmVIlle is available on an iPhone app, so there's no telling just how distracted players will be in restrooms, cars, restaurants, and all the other places people use their mobile phones.  And if you're thinking that we're just talking about kids playing FarmVille, the average user is a 43 year-old woman, an amazing stat that underscores the changing nature of digital revenue, as well as the stereotype of the "typical gamer."

Maybe the most impressive thing about FarmVille is the philosophy of its creator, Pincus.  While you've been running music logs, re-forecasting this quarter's revenue projections, or arranging the weekend air schedule, some estimate that Zynga may be worth $3-5 billion.

Despite these obvious riches, Pincus isn't interested in an IPO or cashing in any time soon.  As he points out, "We're focused on building a long-term sustainable consumer service.  That's our mission."

Smart guy who knows more about customer satisfaction and building successful businesses than many of the experts selling those services.

FrontierVille is next, a Wild West themed game.  Maybe RadioVille is in the planning stages.  

I'm game.

Reflections From CES - Day One - Liking (But Not Loving) Microsoft

Microsoft’s CEO Steve Ballmer gave an excellent keynote presentation on last night at CES, demonstrating the broad footprint the company has across all digital platforms.  No longer just a mega-coroporation that sells Office or Explorer, they are now deeply into search (Bing), television (Microsoft Home) and gaming (X-Box 360).

Despite the power/technical problem to start the presentation (apparently this happens every year) that caused 5,000+ attendees to wait close to 30 minutes, the presentation was substantive, visually stimulating, and demonstrated how far Microsoft has come.

But something was missing.  Despite Ballmer’s best attempt at energy, it just wasn’t there.  He showed a funny video featuring Seth Meyers talking about the impact of technology (“Thanks, Technology”) on his life, and there was barely a ripple through the crowd.  Ouch.

Ballmer showed off new laptops that are smaller, thinner, and amazingly functional.  His demonstration of the power of Bing (watch out, Google – they position this as a “Decision Engine,” which by implication and in practice is more powerful than useful than a “Search Engine”), Blio (more on that below), a killer presentation on Xbox 360 in 2010 (they’re actually in the movie business now), and more was awesome.  But there were no standing ovations, no cheers, no passion.  (It makes you really admire the way that Steve Jobs is able to whip up a frenzy when he takes the stage.)

Yet, Ballmer had some significant announcements and demonstrations:

1. Bing is going to be the default search engine in all HP computers.

2. Ford is rolling out the next generation of Sync.

3. Microsoft just signed a deal with Kia for a Sync-like system called UVO, which is based on speech recognition.

4. The Zune is being integrated into Xbox 360 and Microsft Home – you can now view PPV movies and programs that you watch at home on your mobile device.

5. Coming soon: 3D gaming on your laptop.

6. Three new slate PCs in various sizes coming out later this year.

7. Game Room, which will provide access to hundreds of “classic” games like Centipede.

8. And a visually awesome demonstration of what’s being released on Xbox 360 later this year, Blio is their new reader that takes devices like Kindle to a whole new level.  Demonstrated on a PC, it enables students to read textbooks, but also to watch embedded videos and even have the content read like an audio book.  And it's intereactivity with Explorer 7 and Office functions like PowerPoint is impressive.

And the coolest part of the presentation was Project Natal – which enables players to engage in games on Xbox 360 without the use of a controller.  My family has a Wii - this has the potential to blow that away.  It is set for release for Christmas 2010 and is pretty amazing.

There’s no doubt that Microsoft has come a long way from the early days, and while I’ve never been to MacWorld, I have a feeling that there's a huge difference between the culture of Apple lovers and PC lovers (also demonstrated in those television ads). 

Consumers love Apple.  Consumers use Microsoft.  Apple is hot.  Microsft is cool (cold?) and functional.  Apple is the girl you want to date.  Microsoft is your efficient secretary. 

There’s no advertising or marketing that can change that.

Game Theory

As video gaming becomes an even more significant part of the overall entertainment economy, think about the deal that Rock Band creators cut with Viacom back in '06.  The company paid Harmonix $175 million, but an earnout agreement earned them a $150 million bonus.

It was based on the success of the game.  And by the looks of that bonus, Rock Band has been a huge success for Viacom.  

But wait, there's more - Harmonix founders Alex Rigopulos and Eran Egozy have another bonus coming in '09, which is expected to exceed this year's windfall. 

The math is simple - a $190 game that sold 7 million copies last year, plus 26 million downloads from the game (at about $5.49 for a typical 3-song bundle).  That's some serious revenue.

Digital Mystery Tour

While you're trying to determine what the hot got-to-have toy/gadget will be this holiday season, I'm thinking that the '09 award will go hands-down to the Beatles' new game, which MTV and Harmonix (who makes Rock Band) announced last week.  It's not just that the Beatles have finally committed to a video game (and you have to wonder what Activision/Guitar Hero will do next - the Stones?).  It's that their music will finally be digitally distributed. 

The folks at MTV say this won't be the usual music/video game, and will contain more interactive features that go well beyond Rock Band.  In fact, the game apparently won't even use that brand, but will be positioned as a new model that Harmonix's Alex Rigopulos says will be "built from the ground up."  For the Beatles, that's the way it should be. 

More good news - George Martin's son, Giles, will be the project's music producer.  Giles is the creative force behind the Beatles' Cirque du Soleil show, "Love." 

If you've seen it, you know that this MTV/Harmonix video game will be something special, and not just an "expansion pack."

For the Beatles and their heirs, this is a major moment because it represents the band foray into the digital world.  There is no telling how huge this will be, but given the success of the Rock Band and Guitar Hero franchises, this "game" promises to be something special.  And for Beatles fans - and those who have not yet discovered the Fab Four - this will be yet another way to enjoy their music.

My favorite quote of the last decade comes from Jon Stewart, who when asked how people will enjoy "The Daily Show" years from now commented:

                                    "We make the donuts.  We don't drive the trucks." 

Exactly.  If the content is there - and there's no question that the Beatles' catalogue will live on forever - distribution outlets of the future - like video games - will support it.  This is yet another reason why radio broadcasters simply have to focus on proprietary content that consumers cannot get anywhere else.  Whether it's transmitters, mp3 players, video games, or technologies of the future that we don't know about, "While My Guitar Gently Weeps" will live on.

"Email Is For Old People"

It's amazing how accurate a sample of 31 people can be.  The name of today's entry is a quote from "The Bedroom Project" - and we were surprised to hear it back in February of last year.

I frequently reference that ethnographic study in this blog, and recently, a JupiterResearch study confirms a key finding from "Bedroom."

The rise of social networking activity, coupled with texting and incessant cell phone use, has created a notable decrease in the use of email.  That's what our Bedroomers told us.  For many of them, key communication took place on MySpace, Facebook, and on their phones.  Email was rapidly becoming a place where they conducted business and/or communicated with adults.

What does this mean for radio?  As happy as stations may be when their listener database cracks a certain threshold, it is becoming more difficult to reach consumers with email.  According to the JupiterResearch study, "The Social and Portable Inbox: Optimizing E-mail Marketing in the New Era of Communication Tools," nearly one-fourth of respondents report that social networking sites have replaced email.

David Schatsky, the president of JupiterResearch, notes that "marketers need to be aware that consumers are using other forms of communication and must ensure their strategy adapts to consumers' changing behavior."

This is another reason why stations need to go beyond email, and work on initiatives like text messaging, building their own social networking modules, blogs, video streaming, and other conduits with listeners.  This is especially true among younger-targeted stations.  And as we've seen with just about every other technology, these trends typically start with teens and work their way older.

Today, as a fiftysomething consumer, I have a Facebook site, I text constantly, and I play Guitar Hero - all activities that were off my radar screen just a few short years ago.  So, keep building your email database, but keep in mind that trends are rapidly moving in different communication directions.

The Content Guys

A recent article in The New York Times caught my attention because of its obvious parallels to what's going on in radio.  In this case, it's about video game giant, Electronic Arts, an industry leader that is finding the going tough because of innovative new games like Guitar Hero (created by Activision).  It seems that many of EA's games are essentially tired retreads, repeating past successes, rather than innovating for today's video game player. 

That's the way it goes in the ridiculously fast-moving world of media and technology.  One day you're Yahoo! and everyone uses your search tools.  And then you get replaced by upstart Google, and you're on the road to failure.  If it can happen to leaders like EA and Yahoo!, why should we be surprised that a more traditional industry like radio got caught up in the new media maelstrom?

But the interesting thing about EA's dilemma is the way in which CEO John Riccitiello is meeting his company's challenges head-on.  In a recent speech, Riccitiello admitted his company's mistake:  trying to manage a corporate top-down creative process that was fiscally in-line at the obvious expense of the creative content process.  As he noted, "It could certainly make for a great case study at Harvard if it worked, but I just don't think it works."  Later, he admitted to financial analysts that even EA's acquisition of hot new game development companies failed because EA did not allow them to have creative freedom.

So he's going a new route by acquiring two solid studios, BioWare and Pandemic, and allowing them the independence to create great games.  Consider this quote by Riccitiello, and how it might apply to other industries facing a similar plight:

"Frankly, the core of our business, like in any creative business, are the guys and women who are actually making the product... The companies that succeed are those that provide a stage for their best people and let them do what they do best, and it's taken us some time to understand that.  In our business the accountant, the guy in the green eyeshade, is like the guy in the alien movie that eventually gets eaten.  If you let him run your business, it is neither inspiring or effective."

Hopefully, Riccitiello's new path for EA will actually become a Harvard case study, and a way forward for other struggling media companies and industries.

No, NOT A Blender...

Jacobs' Dave Beasing gets his game on in today's post:

Quick quiz:  What brand name gift item has been in the top 3 on Amazon.com's wedding gift registry for the past several weeks?

Give up?  It's the Nintendo Wii videogame system.  Apparently videogames have evolved from a reason couples split up to become something that brings them together.

It's further confirmation of a key finding in the Arbitron/Jacobs Bedroom Project - that videogames are largely a social activity these days.  Many of the young people we visited at home were eager to show us how much fun they have playing videogames with their friends - either in person or in online competition - and they told us they often "talk smack" with their rivals.  One high school senior even said that he and his friends often refer to each other by their on-screen player names.  (I thought to myself, "At least teenagers get to pick their own nicknames now.  That's social progress.")

The Bedroom Project also verified what our friend Steve Schnur at EA Games has been telling us for years, that games are often a "gateway" to discovering other entertainment.  It's Steve's job to decide what sounds - and music - get put on popular games like Madden Football and NBA Live, causing many gamers to then search for more songs by those artists.  If not through James Bond videogames, how else would one of our Bedroomers - a senior at UCLA - have become a Henry Mancini fan?

Just as a whole generation has grown up loving the NFL because of Madden (the videogame, not its namesake TV commentator), Rock music is experiencing a revival that can be directly credited to Guitar Hero.  The new edition was released last weekend, a major pop culture event.  iTunes is making all the Guitar Hero songs available online, and wireless "axes" and other new accessories are rushing to the market.

Technology changes, but smart marketing doesn't.  Videogames bring people together, and - whenever that happens - opportunity knocks.

Has Mt. Dew Seen "The Bedroom Project?"

Jacobs Media's Dave Beasing offer his thoughts on Mt. Dew's marketing strategy:

No, they haven't see it, but they're clearly learning a lot about their consumers' attitudes in their own research.  In the Arbitron/Jacobs "Bedroom Project," one of the many revelations is the motivation for playing videogames.  The folks at ad agency BBDO and Mountain Dew seem aware that videogamers are extremely competitive, enjoy the social aspects of videogaming, and try to avoid losing their cool during battle.  The creative result is this television commercial for Dew's new energy drink:

If the Dew Game Fuel marketing team had used traditional consumer research, they might have tried to sell that delicious cherry flavor.  Or they may not even have known that their target consumers play Halo and are beyond excited about the upcoming release of Halo 3.  But with ethnographic research, marketers see real people showing their real emotions in their natural habitats.

Fred Jacobs, Arbitron VP Ed Cohen and I invite you to witness real people using media and technology during our presentations at the NAB/R&R Conventions and Jacobs Summit 12 in Charlotte.  Sorry.  We won't be showing a single chart or graph, but you may actually learn more about today's young people than if we had.

You can see both "Bedroom Project" presentations at the NAB/R&R Conventions in Charlotte next week.  Conceived by Arbitron and conducted by Jacobs Media, "The Bedroom Project" is an ethnography study about media, technology, and survey research.  The presentations are Wednesday afternoon at 3:45 at the NAB; Thursday afternoon at 2:15 for the Jacobs Summit 12.

Loners

One of the more interesting findings from the Arbitron/Jacobs "Bedroom Study" was the realization that video gamers aren't just kids sitting in their basements by themselves.  Like TV viewing, gaming is becoming a social activity.  A recent Advertising Age article points out that marketers are beginning to figure this out.

Whether it's Wii parties or "Guitar Hero" fests, gamers enjoy hanging out and competing with each other.  And as we've pointed out in past advisories and blogs, radio should be at the center of this activity.  The "Guitar Hero" application is especially important because it totally supports the music foundation of radio, while giving even the musically-challenged the opportunity to feel like Eddie Van Halen or Joe Perry.

As video gaming spreads to older demos, stations can tap into activities that the audience is already participating in, while cashing in on the phenomenon.

You can see both "Bedroom Project" presentations at the NAB/R&R Conventions in Charlotte this September.  Conceived by Arbitron and conducted by Jacobs Media, "The Bedroom Project" is an ethnography study about media, technology, and survey research.  The presentations are Wednesday afternoon at 3:45 at the NAB; Thursday afternoon at Jacobs Summit 12.