4sight

Hip Hip Hulu!

It's amazing how video continues to be so dominant all over the Internet.  For this, we have YouTube to thank.  But as that category killer has grown and become an even greater force in web entertainment, something interesting has been happening back at the network ranch. 

NBC Universal and News Corp's Hulu has emerged as a big-time success.  Despite predictions to the contrary, Hulu (which is made up of some great TV and movie content) is making a huge impact, and more importantly, it's making money.  Newsweek reports that Hulu made $12 million in gross profit last year (compared to no profit for YouTube).  An analyst for Screen Digest, Arash Amel, estimates that Hulu could actually generate more revenue than YouTube this year.

You may not have known about Hulu, but after the Super Bowl and those great Alec Baldwin commercials, awareness is on the rise.  Hulu is a real video streaming force.

This year, our Tech Poll actually shows a drop for YouTube from 80% to 70%, among those who visit these sites.  So, while video streaming as an activity continues to rise, YouTube's share of this large audience appears to be decreasing.  Meanwhile, 17% of our rockers now visit Hulu - a very nice level indeed. 

Meanwhile, four in ten say they visit any of the networks' websites to stream shows and movies, also up considerably from last year.  This tendency to visit sites run by NBC, ABC, CBS, etc. while YouTube is downtrending is no accident. 

So how have the stodgy old networks actually outsmarted those brilliant web gurus that created YouTube?  Relying on some of Newsweek's observations, and including a few of my own, consider the following:

1. Content Shmontent - Yes, it matters.  While there's nearly an infinite amount of material on YouTube, much of it is junk.  Homemade videos will only take you so far.  But on Hulu, it's quality programming.

2. We're in the money - Only a small percentage of the videos on YouTube can even carry advertising, while on Hulu, 100% of the shows have that capacity (and about 80% actually run spots).  That says a lot about why Hulu had a good year, and why the future may be tipping in their direction.  And Hulu is experimenting with different advertising models.  In one instance, one of the car companies let viewers choose whether they wanted to see a spot for a pickup truck, a crossover SUV, or a sports car.  In another example, viewers could select whether they want to see a single long ad at the beginning of a program OR ads throughout the show. 

3. It's about talent - Unlike how a lot of "old media" companies are trying to master digital technology, Hulu went in a different direction - they brought in outside talent.  A former Amazon exec, Jason Kilar, became Hulu's CEO, and a former Microsoft researcher, Eric Feng, is in charge of development.  Let the experts do their jobs rather than try to retrofit broadcast execs. 

4. It just looks better - So many of the videos on YouTube look and feel amateurish.  While that's fine for consumer-generated video, it's not how we're accustomed to watching TV programming.  On Hulu, programs look the way you expect them to look - clean and high-quality.  After you watch a lot of Hulu, it's hard to go back to YouTube.

5. Use your stars (and your cume) - The Alec Baldwin commercials are helping to put Hulu on the map, and using mass reach vehicles like the Super Bowl and other highly-rated network shows to spread the word will increase awareness and page views.  

For "old media" companies and other more traditional businesses, the Hulu story should serve as an example of strategic ways to create and market digital products.  Relying on Internet-savvy professionals to help guide digital strategies is something that companies ought to be considering, because even the best ideas won't make it unless they are implemented well.  

Hooray for Hulu.  Now let's learn from their model, and see if other traditional businesses can't pull off something successful in the digital space, too.

The Shift Is On

By now, it seems like just about everyone has seen one of Tina Fey's take-offs on Sarah Palin.  But more people have now checked them out at their convenience on the Internet than by watching SNL in real time.  Between DVRs or watching them on streaming video sites, two-thirds of the "views" of these bits have occurred outside of the traditional slot that SNL occupies. 

That says a lot about how consumers are enjoying their entertainment.  Rather than being tethered to the couch late on a Saturday night, Americans have learned that there are easier ways to watch Tina send up Sarah.  While NBC hasn't figured out exactly how to monetize all this off-air viewing, they are moving closer toward attaching advertising before and after these clips.  But they appreciate the idea that viewers are virally passing them via email to friends, families, and co-workers.

Thus, success is being defined differently.  It's not just about ratings - but about aggregating all of this viewing to better deliver eyeballs to consumers. 

And in many ways, this has a connection to radio, where podcasting provides us with the ability to time shift, listen when it's convenient, and to monetize an entirely new stream of revenue apart from :30s and :60s. 

NBC is going after this opportunity with a vengeance.  They clearly understand the importance of time shifting, viral marketing, the ability to generate revenue, and provide value to their advertisers.  While they have the issue of viewers zipping through TiVo'ed commercials, they also recognize the power of people doing their marketing and buzz generation for them. 

Is radio thinking along these same lines?  For stations, personalities, and networks that have the content, how can we move more strategically to make it more accessible, while cashing in on the buzz that our shows and stations create? 

These are questions that we've been talking about for a few years now, and experts like Jason Calacanis and others even provided some road maps for radio.  It's time to stop talking and start doing.

"Everybody, Anytime, Any Place"

Jacobs Media's Director of Internet Strategies, Tim Davis, shares some insights from CBS' Les Moonves.

The title of today's blog is how CBS mogul Les Moonves envisions the future of entertainment and media.

In a recent speech at the Interactive Advertising Bureau's Mixx Conference, Moonves talked about how CBS - once one of the major holdouts among the larger entertainment distributors - has moved to embrace a digital future:

"Any media company that doesn't acknowledge that the Internet is where you need to be -- that it's the fastest-growing, most innovative new place to get premium content -- is sort of out of the ballgame."

And answering the naysayers who argue that allowing content online can harm a company's primary brands (i.e., television or radio programs) Moonves hammered the point that "it is in no way cannibalistic, and it's additive."

Truly a groundbreaking stance from a guy whose parent company, Viacom, is still in a billion dollar law suit with YouTube.  No doubt some of his epiphany is attributable to CBS' recent acquisition of CNET, putting the company in a primary slot in terms of Internet properties.  Regardless of the motivation, CBS has now seeded its content to over 300 different web properties through various licensing and revenue sharing deals.

It's a great example of a big media company seeing through the morass of proprietary content issues, handcuffed distribution models, and short-term, "old media" thinking in order to make sure that its content can stay relevant in a digital world.  Slow to the game, yes, but kudos to Moonves and CBS for moving the needle and setting a great example. 

Have you released your content?  Have you moved content to the web via podcasts?  Are you offering widgets and other digital downloads? 

Is your content ready for mobile use?  Are you using Twitter and Facebook to interact with your audience? 

What Were You Doing In May?

Well, you may have been getting the kids ready for camp, starting your gardening/around the house projects, and shopping for Mother's Day gifts.

But the odds are also pretty good that you also watched online videos in May - and a lot of them.  According to comScore, Americans watched 12 billion (that's with a "b") videos during the fifth month of this year.  Not surprisingly, YouTube garners the lion's share of this video activity, while Fox Interactive, Viacom Digital, Yahoo!, and Microsoft are all in the hunt.

As we saw in this year's Tech Survey, video streaming, something that was relatively uncommon just a few years ago, continues to grow.  Nearly 7 in 10 of Tech Survey respondents are now streaming video frequently or occasionally:

CBS Radio is moving toward taking advantage of this phenomenon.  They've launched a new video platform on their four New York City stations that provide user flexibility to display station content, share video clips, and feature all sorts of video content.

And what are you doing to take advantage of this pop culture/technology explosion?  It's only a matter of time before even non-entertainment centered web sites will be providing video of some kind - from "how to" to video conferencing support.

W.T.D.A.?

"Online Is The New Primetime"

Today's posting title is a quote from Gian Fulgoni, chairman of comScore, and it cleverly sums up how the Internet now exceeds television during the daytime hours.  In fact, a recent New York Times article actually asked the question, "What is primetime?"  That's because 6,000,000 May sweeps viewers have disappeared since last year.

The culprit?  The Control-Variety-Choice architecture of TiVos/DVRs and the Internet, especially due to the growth of network television sites that offer shows like The Office and Lost whenever you want to see it.

We saw this in our Tech Poll IV in a new question that revealed that four of every ten Rockers now have a TiVo or DVR.  The implications of this are obvious if you're in the TV business.  But what if you're in radio?

At what point will "morning drive" not hold its traditional lead over all other dayparts (aside from PPM)?  When will radio have a podcasting model that makes it convenient for fans of morning shows to be able to easily time-shift their listening?  (And keep in mind that if a PPM respondent listens to a podcast within 7 days of its original airdate, it "counts" in the ratings.)

You may have heard about Hulu, and now radio has some of the same time-shifting potential.  As we noted, NPR understands the model only too well.  They average 12 million downloads a month and that's more than 200 million total downloads since they started their podcast program in August 2005.  And of course, that doesn't cover other public broadcasting networks and producers, or the many local public stations that provide podcasts of their content.  The graphic below shows the most downloaded podcasts on iTunes.  Look how public radio dominates:

And the sponsorship dollars keep rolling in.  Another finding from the Tech Poll is that two-thirds of those who have downloaded a podcast are very or somewhat willing to sit through a commercial as the price of admission.

Maybe instead of calling it time-shifting, we ought to start thinking of it as "dollar-shifting."

Story Time

How do you market a great brand in 2008?  You could use statistics or positioning statements.  But if you want to create true resonance, you tell a story.

Ask marketers like Seth Godin or Tom Asacker.  They'll tell you that a great story will trump data every time. 

The Buffalo Bills are doing that right now with their "My Bills. My story." campaign that lives on their website, and also doubles as a media campaign.  Our old friend, Vh1 Executive VP & General Manager Tom Calderone, is the focus of one of these stories.  They sell season tickets and the Bills experience better than action shots of the team or special rebates.

>CLICK HERE TO WATCH THE VIDEOS<

Ben McConnell calls this "peopletizing" - using your customers to tell your story.  Great companies have great fans that can tell great stories.   Tell 'em.

The Selling Of Music - 2008 Style

What an exciting time for the record industry.  Consider these recent news headlines:

• iTunes has now passed Wal-Mart and everyone else to become the top music retailer in the U.S.


• Universal, Sony BMG, and Warner Music Group will offer their catalogues in a joint project with MySpace

This is big news for a business that has been plagued by self-inflicted misfires, mistakes, and misadventures in the digital world.  After all this time, they have discovered that indeed there is a "there there" to stream, distribute, and sell music via a variety of different digital sources.  Good for them.

In the meantime, the RIAA continues to downplay radio's role in the exposure and selling process.  But ask yourself this:  how do most consumers discover the music they choose to stream, download, and/or purchase from all these new distribution outlets? It's still about the radio.

Yes, it's great to get a song on Grey's Anatomy or on that new GAP commercial.  Satellite radio is another outlet that the labels vigorously pursue,  but as we see in our new Tech Poll, let's not forget about how the vast majority of Americans still find out about new music:

Now, critics will chime in that this survey is a self-fulfilling prophesy because it is conducted among radio listeners.  But since 90%+ of the U.S. falls into that category, there's not much of a skew to this data.  Hey, if it makes you feel better, subtract 5 or 10 percentage points from FM radio and look at this chart again.  If I was a new band with music to expose and sell, my chips would still be on good old FM radio.  Why the record industry would criticize the incredible power of this traditional medium defies logic. 

What would an artist rather have?  A song in this month's slasher movie soundtrack or a solid add on Z100?  A song featured on Scrubs or strong airplay on KROQ? 

Just asking.

"It Ain't The Meat...

...It's The Motion."  OK, maybe I'm one of the few who remembers that song from Maria Maldaur from the early '70s.  But as the CES is the big story of the week, those lyrics ring true.  Of course, the CES is all about the newest gadgets...or is it?

The more you talk to key players in the media/technology field, the more it continues to come back to software...content...programming...yes, the motion.  It's not just about the toys - it's about what you do with them.

And that's the theme we're hearing again and again out of CES.  In a recent LA Times piece, Beth Comstock, NBC Universal's president of integrated media, notes: "You can't talk about great tech without great content.  That's what led us to this year saying we need to have a presence.  We want to be in the middle of all these conversations."

Jonathan Shambroom, a senior vice president at Crackle, Inc. (an online video site acquired by Sony in '06) underscores that point:  "For a long time, the line between content and hardware has been blurring.  Traditionally, CES has been about hardware.  Now content is really driving a lot of the technology."

And it dovetails into the HD Radio challenge.  Yes, the hardware offerings are clearly proliferating and becoming more compelling.  But is broadcast radio stepping up with the content that will truly drive equipment sales?

Check out the latest happenings from the CES with Engadget & CNET.

Learning New Tricks

Newsweek.com has announced it will launch a weekly web TV show about politics, produced by the former producer of MSNBC's Hardball, Tammy Haddad.  As Newsweek struggles with its ad page revenue (down nearly 9% through the first three quarters of '07), they are turning more and more resources to the digital space.  After all, they have the content, and are simply responding to where consumers are moving.

Another example is the San Diego Times-Union, owned by Copley Newspapers.  They've launched two Internet stations, one that streams talk show hosts, as well as a channel totally devoted to local San Diego music, Amplify SD.

Traditional media is getting the message loud and clear, and their corporate bosses are removing the handcuffs.  More and more are investing in digital content, and specifically, video efforts.  More and more, traditional media that have launched CGM contests are finding to their pleasant surprise that there are incredible young "craftspeople," skilled in video production and editing, living in their markets. And the cost of launching webcams, and providing video of events can be very reasonable.  Every time you post a simple "photo album" on your website, you're sending the message to your audience that you just don't get it.

Green Truck - Red Truck

Jacobs' Tim Davis considers whether it's the medium or the message - or both:

No matter where you land regarding the ongoing Writer's strike, one thing that most agree with is that it has raised awareness of what's at stake in terms of content development in the digital future.

The essence of this strike comes down to receiving fair royalties for material that is re-purposed into online content - whether streamed from the network's site, downloaded on YouTube, or shared on Joost and Veoh.  Up until now, the "distributors" of content (i.e., the networks) have written off all re-purposing of broadcast content as "promotional," struggling how to figure out how to monetize it. The writers view this as a fight for their future earning power.  If it's true that the conventional TV revenue platform, as we know it, is on the way out, the future is NOT all about the "broadcast" but more specifically about distributing the content people love in whatever manner they choose to receive it.

Greg Daniels, the show runner for NBC's The Office sums it up nicely:  "It's like if we made pots, and we delivered them in a green truck, and our contract said, 'This is what you get for pots delivered in a green truck,' and then they bought red trucks and gave us nothing for the same pots, just because they were delivered in the red trucks."

Lost Creator Damon Lindelof takes the concept from the abstract and into real world terms in his op-ed piece in The New York Times: "The rectangular screen in your living room won’t really be a television anymore, it’ll be a computer.  And running into the back of that computer, the wire that delivers unto you everything you watch?  It won’t be cable; it will be the Internet...  This is how vaudevillians must have felt the first time they saw a silent movie; sitting there, suddenly realizing they just became extinct: after all, who wants another soft-shoe number when you can see Harold Lloyd hanging off a clock 50 feet tall?"

In a nutshell, the future is in the "tubes" and as we've talked about in our other blog in the past, for any mass medium it's both a content AND delivery issue.  Not only do you have to put out a product people want and love, it's got to be in the places they find convenient: portable devices like cell phones and iPods, and in ways that afford more control.  You have to invest in talent, promotions, and image - and delivery.

Create solid content and deliver it in the way(s) your consumers expect it.  Use the power of your traditional medium to drive the audience to these new offerings.  And move your audience back and forth - a phenomenon we at Jacobs refer to as "pinballing."

We are on the cusp of a sea change for millions of media consumers.  Don't worry about the color of your truck - just work on what's inside of it.