If you have followed this blog, you know that in my most recent post (Feb 14, ages ago), I spoke of the "Gold Rush Coming" in content related opportunities at the heart of a new land grab facilitated by low costs and advertising services that almost assure profitability.
I did not go into detail and I have not posted since then because I have been busy implementing a new strategy based on that "Gold Rush".
The essence of the new strategy is traffic- understanding where customers are, what they are intersted in and figuring out how to put yourself in the path with something that meets that interest- no rocket science there, right? In fact, between Adwords and AdSense, Google provides all the tools you need in order to 'play'.
If you play it right, you'll have revenues and profitability and a real investment opportunity for others. In fact, the content business you can set up with this model looks more like a hedge fund investment play than a media/content business.
Why? Because in this model, we don't really care if the consumer wants our content. In fact we prefer they click on our ads. We grab a few cents as they travel the Google enabled content ecosystem!
How do you do this? If you are able to think your way through to standing a couple of universally accepted industry rules on their heads, you can get there.
I'm not going to tell you more, just refer you to our project and a few of the properties we have operating. If you go to CPM Capital, you will see that I am serious about the hedge fund analogy.
Then go to GlobetrotterPix, OuterSpacePix or GreatOutdoorsPix (3 of more than 20 advertising investment revenue sites we have built, with hundreds more to come) and try to figure out how we are delivering $25.00 plus CPM rates from these pages!
Drop me a note and let me know if you are interested in learning how to make real returns on investment in technology and content. I am not kidding! And the concepts we stand on their heads...
I'll tell you later.
Monday, May 14, 2007
Wednesday, February 14, 2007
Gold Rush Coming!
If you have any internet grey hair (you have been around technology for at least ten years) and been watching all the to do about the Web 2.0 (YouTube, et.al.) fight with the media rights owners (Viacom, etc.) over content rights violations, you probably have an "I have seen this all before" attitude.
And you have.
And if you have been around for less than 10 years, all you need to do is wander over to your local arcade and play a good old fashioned game of "Wack-a-Mole" (I have not seen a good emulation online, or I would point you there) to get the picture of what is going on.
The big rights players are hording their good content away from the internet because they don't know how to monetize (they have the wrong/same people in place managing their digital ventures). The Web 2.0 guys are creating markets of meaningful size, but have trouble with customer loyalty and getting rights content type CPM from advertisers, so they need a strategy to get that content in. They have investors demanding returns (most took way too many $ and find themselves hoping for valuations that will never come- that's the subject of another blog to come).
But when the two groups speak, it is like a 1980s style Reagan/Breshnev discussion or worse. Tech guys don't speak media language and vice versa. The Ad guys want it resolved, but they are fearful of the rights relationships that revolve around TV so they stay away, hoping the situation resolves itself.
But it doesn't, and it all heads to Court. In this Jon Stewart style evolving comedy of miscues and errors (I thought you might like the comparison since the Viacom-YouTube debate is mostly about Daily Show content), this is the funniest part. Once in Court, the idiots are in control of a situation that goes from a Wack-a Mole game to something more like trying to hold that whippet gas in back in college (if you never tried, I am not advising you do...perhaps a different metaphor- herding cats!). By the time all the non-tech lawyers and judges get around to considering the issues, the ecosystem has moved on, the issues are no longer relevant, some people are out of business and the Mole has appeared from a new hole!
Think I'm overstating again? Look at Netscape v. Microsoft (those of you under 10 in internet age may not remember Netscape, but it is on Wiki, so go there)...the issues that went to trial were a joke. Microsoft knew that would be the case and they laughed and danced their way around for a decade, while their cash horde grew to $50B!
And you have.
And if you have been around for less than 10 years, all you need to do is wander over to your local arcade and play a good old fashioned game of "Wack-a-Mole" (I have not seen a good emulation online, or I would point you there) to get the picture of what is going on.
The big rights players are hording their good content away from the internet because they don't know how to monetize (they have the wrong/same people in place managing their digital ventures). The Web 2.0 guys are creating markets of meaningful size, but have trouble with customer loyalty and getting rights content type CPM from advertisers, so they need a strategy to get that content in. They have investors demanding returns (most took way too many $ and find themselves hoping for valuations that will never come- that's the subject of another blog to come).
But when the two groups speak, it is like a 1980s style Reagan/Breshnev discussion or worse. Tech guys don't speak media language and vice versa. The Ad guys want it resolved, but they are fearful of the rights relationships that revolve around TV so they stay away, hoping the situation resolves itself.
But it doesn't, and it all heads to Court. In this Jon Stewart style evolving comedy of miscues and errors (I thought you might like the comparison since the Viacom-YouTube debate is mostly about Daily Show content), this is the funniest part. Once in Court, the idiots are in control of a situation that goes from a Wack-a Mole game to something more like trying to hold that whippet gas in back in college (if you never tried, I am not advising you do...perhaps a different metaphor- herding cats!). By the time all the non-tech lawyers and judges get around to considering the issues, the ecosystem has moved on, the issues are no longer relevant, some people are out of business and the Mole has appeared from a new hole!
Think I'm overstating again? Look at Netscape v. Microsoft (those of you under 10 in internet age may not remember Netscape, but it is on Wiki, so go there)...the issues that went to trial were a joke. Microsoft knew that would be the case and they laughed and danced their way around for a decade, while their cash horde grew to $50B!
So, if the Moles are going to keep getting wacked, why keep trying? Because the $ coming from Ads is growing at an amazing pace (search $ paid out by Adsense are up 70% year over year on a per click basis and keyword prices are up 3-4x) and the expense of maintaining a legit internet publishing business is moving toward $0 at a pace faster than Moore's Law!
Assuming the YouTube syndication strategy fails (seems likely at this point), where does the mole pop up next?
There is a land grab coming of unprecedented proportions with web publishers churning out thousands of sites with new brands, Web2.0 integration and editorial solutions that will not be so easily swatted away. The internet will support 100s of ESPN type businesses of all sizes and all profitable, focused on any vertical you can think of, including camping out in the backyards of the major rights holders with winning legal strategies.
So, hitch up your wagon and join the gold rush. There has never been an easier, bigger opportunity. But where and how to stake the claim?
I'm already in in many places, so soon I'll tell you about that play, but the critical component of this wave will be staying power- not venture capital. Venture Capital leverages staying in the wrong claim with the wrong team. This land grab requires flexibility... so VC capital is silly to take.
Staying in the game because you love it and know how to operate to a profit is where the wins are. Do it once, then do it 500 times. Then you have a meaningful business. And you own it ALL!
Drop me a note if you want to know more.
Friday, January 26, 2007
New Media Calls for New Sports and New Coverage
Have you noticed the slow pace at which the existing sports leaders have adopted any meaningful attempts to bring their products to the new media? In fact, if you look at all the majors (MLB, NBA, NFL, Premier League Soccer, etc.) there has been no progress at bringing products online in TEN years!
While online growth in general has been astronomical and new solutions and products make clear the unparalleled growth of online as a marketplace, advertising channel and distribution network, the major sports have held back. If you have read this blog before, you know that I have attributed this reluctance to lack of foresight, old-minded execs who don't use new media and other trite, non-original analyses. In fact, one old media exec told me he thought I was sounding a bit pedantic.
So, I have been doing somewhat of a deeper assessment on this issue recently and have come up with another explanation, one that I believe points toward new, disruptive markets and that is based on very real growth opportunities.
The core of this new analysis is that rather than try to fit old sports into new media using existing events developed with old media in mind, it is time to develop new sports with new media in mind. ("New Sports" can include permutations of old sports). We need to assess what new media does well and tailor the sports opportunities so that they take maximum advantage of the best of new media. So, big arena events like football games that are so great for old TV based media may not be right for the new media. NBA games might work perfectly well on HDTV, but interactive one on one tournaments in front of smaller crowds at suitable locations might be better suited for new media.
I saw the light last Friday night up in Reno, NV, that known center of all things Sport! I was attending the Pole Vault Summit (as Dad of someone who wants to fly over 20') and accidentally stumbled into the Summit's Friday nite extravaganza where I saw the light.
While online growth in general has been astronomical and new solutions and products make clear the unparalleled growth of online as a marketplace, advertising channel and distribution network, the major sports have held back. If you have read this blog before, you know that I have attributed this reluctance to lack of foresight, old-minded execs who don't use new media and other trite, non-original analyses. In fact, one old media exec told me he thought I was sounding a bit pedantic.
So, I have been doing somewhat of a deeper assessment on this issue recently and have come up with another explanation, one that I believe points toward new, disruptive markets and that is based on very real growth opportunities.
The core of this new analysis is that rather than try to fit old sports into new media using existing events developed with old media in mind, it is time to develop new sports with new media in mind. ("New Sports" can include permutations of old sports). We need to assess what new media does well and tailor the sports opportunities so that they take maximum advantage of the best of new media. So, big arena events like football games that are so great for old TV based media may not be right for the new media. NBA games might work perfectly well on HDTV, but interactive one on one tournaments in front of smaller crowds at suitable locations might be better suited for new media.
I saw the light last Friday night up in Reno, NV, that known center of all things Sport! I was attending the Pole Vault Summit (as Dad of someone who wants to fly over 20') and accidentally stumbled into the Summit's Friday nite extravaganza where I saw the light.
What I saw was all at once shocking, extraordinary and inspiring. More than 2,500 people were crammed into the Grand Sierra Resort's Grand Ballroom to watch the USA's best/elite pole vaulters compete in a 'pole vault only' event on the stage of a Casino!
Men's and Women's competitions were held simultaneously with criss crossing runways and ten vaulters of each sex vaulting about 30 seconds apart to ear blasting tunes of every generation since Wodstock and an ongoing, interactive commentary that urged the vaulters to interact with the audience. Neither vaulters or audience disappointed.
Since the audience was comprised of every serious pole vaulter (and their coaches and parents/family) in the USA, the place rocked! They vaulters became entertainers, inciting the crowds with great personalities, spectacular athletic skills and perfect, beautiful bodies. The audience interacted, participated, appreciated and had a rousing good time!
And it struck me that the organizers of the Pole Vault Summit have struck gold!
Rather than restrict this amazing event to the sinking anchor of US track & field, they have declared the event's independence and reconstituted its presentation so that it is inspiring to a new generation of US vaulters and integrated with and suitable to the media that the vaulters use!
How did this happen and where is mainstream media on this opportunity? (I'm guessing you saw nothing about this on the 6 o'clock news).
This happened through the vision of one unselfish man and one institution that was willing to allow him to go do something wonderful! That man is Bob Fraley, world renowned track coach at the institution, Fresno State. Over the past 20+ years, Bob pulled together this activity to the point where it has its own momentum and is a Sport unto itself! Check it out.
The point of all this is that any sport can be reconstituted to inspire the core of its audience in ways that suit and interact with that audience. New media can be at the heart of this, with enabling technologies, distribution and $.
What new media does is make that audience relevant and interesting to sponsors and marketers and as a marketplace, by bringing people together. When knowledgable, dedicated people like Fraley are in charge, they bring out the best in sport and present opportunities that those of us in the marketplace that is new media have been dreaming about!
Now, who is going to bring this type of sports enterprise to the masses? We need a Roone Arledge of new media.
Any takers?
Tuesday, January 16, 2007
Automated Revenues: Fact or Fiction?
In the world of internet and content publication and services one hears the term "automated revenues" so often that an analysis is in order.
First, a definition. Revenues is $. Pure and simple, money that comes to you in reward for putting your effort, ideas or ownership to work for someone else. In short, as the reward for transferring what is yours, one receives compensation.
In business, we call the money received revenues. Automated, as intended in the phrase, has a meaning that is just the opposite of effort! In fact, automated means doing something without effort.
When coupled the two words conjure up a picture of obtaining $ without effort. Is that really it? Very close. Automated Revenues is the Internet equivalent of the Fountain of Youth that drove 16th century explorers to the sandy beaches of Florida!
But is there really a reward of money without effort? Fact is, NO. There is significant and substantial effort, just not the usual kind. Bear with me as I explain.
In most businesses, the only way to earn revenues is to make a product or service, sell and market, deliver the product or service to the customer, then collect $ if the customer is satisfied.
In internet automated revenues businesses, software does all of the above. Software makes the product or service, markets it to consumers or businesses who find it on the Web through search or other automated web tools. The product delivery is one hundred % digital, so no human being need be involved in delivery. The money is received through automated transactions if there is a price for the digital goods, or advertising solutions are plugged in if the product is free but supported by ads.
So, the things most businesses are accustomed to doing are done by software systems, hence the term automated. But, there are tasks that must be undertaken...the software must be developed, then maintained. The network and servers must be managed, maintained and upgraded from time to time. The money must be received and anaged and bills paid.
In a well conceived and managed automated revenues business, the time investment can be minimal compared to an ordinary business. In fact, it is possible to run many automated businesses at one time. Many are doing exactly that. There are milions of internet spawned automated businesses that provide all or part of the support for families. And there are large automated businesses that are amazing and growing every day. For example, automation of systems allows Google to have the largest revenue to employee ratio of any company in history.
In a matter of days, any major media site (e.g. ESPN.com, NBA.com, MLB.com, Getty Images etc.) could be transitioned to an automated business with 50% of current staff and revenues per employee far exceeding Google's current $1.5M ratio (note that the Google ratio is much lower than it would be if they were not spending so much on activities unrelated to revenues).
Funny, considering the shareholder activist proposals at YHOO, I would probably just drive that business to a pure automated system and drive the price of the stock up based on a goal of $5M per employee in revenue!
Am I serious? You betcha.
Consider YouTube with 100M videos viewed and just 70 employees or the pre-Fox MySpace run with nothing but geeks (10) and servers.
This is how it gets done today and it is also the reason that private equity $ is flying into Internet companies in spite of the clear knowledge that the days of high flying internet IPOs are over. The fundamentals per classic bricks and mortar, General Motors type analysis are simply too good to ignore!
Much more coming on this subject.
First, a definition. Revenues is $. Pure and simple, money that comes to you in reward for putting your effort, ideas or ownership to work for someone else. In short, as the reward for transferring what is yours, one receives compensation.
In business, we call the money received revenues. Automated, as intended in the phrase, has a meaning that is just the opposite of effort! In fact, automated means doing something without effort.
When coupled the two words conjure up a picture of obtaining $ without effort. Is that really it? Very close. Automated Revenues is the Internet equivalent of the Fountain of Youth that drove 16th century explorers to the sandy beaches of Florida!
But is there really a reward of money without effort? Fact is, NO. There is significant and substantial effort, just not the usual kind. Bear with me as I explain.
In most businesses, the only way to earn revenues is to make a product or service, sell and market, deliver the product or service to the customer, then collect $ if the customer is satisfied.
In internet automated revenues businesses, software does all of the above. Software makes the product or service, markets it to consumers or businesses who find it on the Web through search or other automated web tools. The product delivery is one hundred % digital, so no human being need be involved in delivery. The money is received through automated transactions if there is a price for the digital goods, or advertising solutions are plugged in if the product is free but supported by ads.
So, the things most businesses are accustomed to doing are done by software systems, hence the term automated. But, there are tasks that must be undertaken...the software must be developed, then maintained. The network and servers must be managed, maintained and upgraded from time to time. The money must be received and anaged and bills paid.
In a well conceived and managed automated revenues business, the time investment can be minimal compared to an ordinary business. In fact, it is possible to run many automated businesses at one time. Many are doing exactly that. There are milions of internet spawned automated businesses that provide all or part of the support for families. And there are large automated businesses that are amazing and growing every day. For example, automation of systems allows Google to have the largest revenue to employee ratio of any company in history.
In a matter of days, any major media site (e.g. ESPN.com, NBA.com, MLB.com, Getty Images etc.) could be transitioned to an automated business with 50% of current staff and revenues per employee far exceeding Google's current $1.5M ratio (note that the Google ratio is much lower than it would be if they were not spending so much on activities unrelated to revenues).
Funny, considering the shareholder activist proposals at YHOO, I would probably just drive that business to a pure automated system and drive the price of the stock up based on a goal of $5M per employee in revenue!
Am I serious? You betcha.
Consider YouTube with 100M videos viewed and just 70 employees or the pre-Fox MySpace run with nothing but geeks (10) and servers.
This is how it gets done today and it is also the reason that private equity $ is flying into Internet companies in spite of the clear knowledge that the days of high flying internet IPOs are over. The fundamentals per classic bricks and mortar, General Motors type analysis are simply too good to ignore!
Much more coming on this subject.
Wednesday, January 10, 2007
eBay buys StubHub for $310M!
Hot off the press is the announcement that eBay is paying $310M for StubHub, the online market enabling ticket sales between consumers (some call it scalping!).
This is a natural play for eBay, picking up a company that is well versed in the 'sales enabling technology' space, a company that has been doing quite well.
But it wasn't always easy for a group of really smart guys at StubHub in San Francisco.
The StubHub Founders, especially Jeff Fluhr, CEO, are bright guys who came up with an excellent idea and ran with it. When their first idea (that the Sports rights holders would want to tap into the market and share revenues and drive toward an IPO) failed because the rights holders flubbed the handoff, Fluhr was brilliant in recognizing that he had to change what he was doing and avoid partnerships unless they were on equitable terms with reputable organizations. Otherwise, with the waffling 'partners' who really might prefer he fail (e.g. NHL, MLBAM), Fluhr decided that StubHub would pay the freight for advertising on their sites and keep all revenues from StubHub sales.
In short, StubHub started out with a strategy to provide a service for the obvious beneficiaries (the Sports teams and leagues) with a rev share for successful sales. When the Leagues did not cooperate, Fluhr abandoned the services play even though he was four years into it, and went with an 'in your face' strategy, taking them on in Court (Patriots and Yankees) and paying the freight to get fans to his site to buy and sell tix. Almost immediately the site turned around and started making $. How close was StubHub to being stubbed out? We'll never know the real deal, but it was close enough that employees were jumping ship, including co-founder Baker.
What amazes me is that once again the Leagues and rights holders missed out on an opportunity to build a business with a smart, willing service provider. All they had to do was provide traffic and cooperate in enabling a market that everyone knows exists. They could have shared in ticket sales revenues and gotten big equity kickers in a very big business. Instead they underperformed on obligations where they worked with StubHub and did everything they could to turn the market into one where StubHub competitors like Ticketmaster paid rights fees to play in the rights holder ballparks, the only model that the rights guys seem to be comfortable with although they continue to give lip service to visionaries like Fluhr.
So, they almost killed StubHub, then missed the gravy train and watched as a really smart guy (Fluhr) made it happen anyway! His original strategy should have been a multi-billion dollar play with leagues and teams as partners. Instead, because of stubborn, arrogance born stupidity, he and his investors took 100% of a smaller play and the Leagues and teams got zilch!
Will they ever learn? Unfortunately for the financial stakeholders, it seems the answer is no...
Congratulations to Jeff Fluhr and some really smart advisors, including Steve Young, Dave Checketts, Brian Bedol, Allen & Co. and Frank Biondi.
Sometimes in the Internet it's like a toboggan ride down a steep ski slope. You need to hang on tight for your life while you fly in directions unknown and be willing to crash, then pick up the sled for another ride down!
This is a natural play for eBay, picking up a company that is well versed in the 'sales enabling technology' space, a company that has been doing quite well.
But it wasn't always easy for a group of really smart guys at StubHub in San Francisco.
The StubHub Founders, especially Jeff Fluhr, CEO, are bright guys who came up with an excellent idea and ran with it. When their first idea (that the Sports rights holders would want to tap into the market and share revenues and drive toward an IPO) failed because the rights holders flubbed the handoff, Fluhr was brilliant in recognizing that he had to change what he was doing and avoid partnerships unless they were on equitable terms with reputable organizations. Otherwise, with the waffling 'partners' who really might prefer he fail (e.g. NHL, MLBAM), Fluhr decided that StubHub would pay the freight for advertising on their sites and keep all revenues from StubHub sales.
In short, StubHub started out with a strategy to provide a service for the obvious beneficiaries (the Sports teams and leagues) with a rev share for successful sales. When the Leagues did not cooperate, Fluhr abandoned the services play even though he was four years into it, and went with an 'in your face' strategy, taking them on in Court (Patriots and Yankees) and paying the freight to get fans to his site to buy and sell tix. Almost immediately the site turned around and started making $. How close was StubHub to being stubbed out? We'll never know the real deal, but it was close enough that employees were jumping ship, including co-founder Baker.
What amazes me is that once again the Leagues and rights holders missed out on an opportunity to build a business with a smart, willing service provider. All they had to do was provide traffic and cooperate in enabling a market that everyone knows exists. They could have shared in ticket sales revenues and gotten big equity kickers in a very big business. Instead they underperformed on obligations where they worked with StubHub and did everything they could to turn the market into one where StubHub competitors like Ticketmaster paid rights fees to play in the rights holder ballparks, the only model that the rights guys seem to be comfortable with although they continue to give lip service to visionaries like Fluhr.
So, they almost killed StubHub, then missed the gravy train and watched as a really smart guy (Fluhr) made it happen anyway! His original strategy should have been a multi-billion dollar play with leagues and teams as partners. Instead, because of stubborn, arrogance born stupidity, he and his investors took 100% of a smaller play and the Leagues and teams got zilch!
Will they ever learn? Unfortunately for the financial stakeholders, it seems the answer is no...
Congratulations to Jeff Fluhr and some really smart advisors, including Steve Young, Dave Checketts, Brian Bedol, Allen & Co. and Frank Biondi.
Sometimes in the Internet it's like a toboggan ride down a steep ski slope. You need to hang on tight for your life while you fly in directions unknown and be willing to crash, then pick up the sled for another ride down!
Thursday, January 4, 2007
2006- the Year of UGC- What does it Mean for the Industry?
UGC- User Generated Content and I promise not to use too many other acronyms!
As you probably know, Time Magazine awarded its "Person of the Year" award to "You" in honor of what You are doing in generating the new Internet Content with User Generated Content. They even put a mirror on the cover so that You can see Yourself!
It is time that this blog address some of the issues raised by UGC and its implications for our digital media industry.
To be the cynic, UGC has been around since Day One of the Internet. I had my first blog when my Windows 95 system made FTP easy and Netscape Navigator Gold put out the first WYSIWYG editor. Not much has changed (technically) since then. The publishing step is easier and you don't need FTP, but you still need an idea and the focus to post it as often as possible and that is the hardest part.
MySpace and You Tube are not the first UGC enablers to hit it rich, either. YHOO bought GeoCities in 1996 for a ton of cash!
The difference is the proliferation of easy publishing tools, services and digital devices to produce content beyond the written word. Yes, cheap digital cameras have made everyone a producer!
While it is easy to understand why so many are producing, it is harder to grasp the reason that people are spending so much time looking at other UGC. The social element of this inserts a business model that formerly did not exist. The big ($60B?) question is whether this is hurting old, produced media (the rights protected versions) and what the Big Boys should do (if anything) as the result of its emergence.
There is a long advocated theory in digital media that there is never an emerging network or channel that is bad for the existing media, that media will consistently expand to fill new opportunities and that old channels will survive. While that sounds like some bullshit coming from the mouths of old media execs trying to save their skins, there is definitely some validity. Television as we know it is not going away. Radio continues to be strong as does in Theater movie entertainment. New Channels mean new outlets and new ways to cross-market as the channels develop. That does not mean that the content businesses that inhabit the old channels will survive. They need to recognize the new opportunities and address them, service their customers wherever they reside and use new media as both new $ opportunities and feeders for old $ plays.
So, UGC is definitely HURTING Old Media because new customers are looking at content Old Media has nothing to do with. It is as though the old media boys are missing out on an entire generation of customers.
Why are they missing out? It is simple....it is because they are fighting the new channel and its fundamentals. In short, people want to see lots of content, see it where they want it, how they want it without paying for it. Rather than riding this roaring current, old media is fighting the rip and while they are not drowning due to the continued vitality of the old channels, they are not participants in the new media play. Worse, they are allowing the biggest disruptive strategy in business history to take a stranglehold around their throats.
If you have read this blog before, you know that I believe that success in the media business is all about disruptive strategies. The old media boys have set themselves up for disruption and if there is a danger that UGC brings it is this. The next play for UGC is the living room and the television set. Interactive TV will mean UGC and free content on the TV and the rights boys are likely to be found with their pants down again.
What should they do? Forget the fight. It is lost. UGC is here. So, instead of fighting a losing fight, ride the big wave....put every bit of image and clip content you possibly can into the UGC world for syndication to any site that wants it (hire 50+ UGC editors to do nothing but put your content into this world). Use YouTube and MySpace as marketing vehicles for going to movies and games, watching shows and games on television and getting consumers to buy rights to better content online. And One last thing....wake up to the fact that users have huge systems that can embrace significant applications. Capture the ardent fan and his or her system with a proprietary client that DELIVERS your amazing content to the desktop along with your ads and upsells! And, help the fan create their own UGC relevant to your content and post it to your environment so that they STAY HOME with you.
Yep, use UGC to create the means by which you acquire and strengthen customers, make $ and siphon the UGC enthusiasm into your world. In short, develop and execute a strategy to disrupt and bypass the biggest disruptor in history- Google!
More to come....
As you probably know, Time Magazine awarded its "Person of the Year" award to "You" in honor of what You are doing in generating the new Internet Content with User Generated Content. They even put a mirror on the cover so that You can see Yourself!
It is time that this blog address some of the issues raised by UGC and its implications for our digital media industry.
To be the cynic, UGC has been around since Day One of the Internet. I had my first blog when my Windows 95 system made FTP easy and Netscape Navigator Gold put out the first WYSIWYG editor. Not much has changed (technically) since then. The publishing step is easier and you don't need FTP, but you still need an idea and the focus to post it as often as possible and that is the hardest part.
MySpace and You Tube are not the first UGC enablers to hit it rich, either. YHOO bought GeoCities in 1996 for a ton of cash!
The difference is the proliferation of easy publishing tools, services and digital devices to produce content beyond the written word. Yes, cheap digital cameras have made everyone a producer!
While it is easy to understand why so many are producing, it is harder to grasp the reason that people are spending so much time looking at other UGC. The social element of this inserts a business model that formerly did not exist. The big ($60B?) question is whether this is hurting old, produced media (the rights protected versions) and what the Big Boys should do (if anything) as the result of its emergence.
There is a long advocated theory in digital media that there is never an emerging network or channel that is bad for the existing media, that media will consistently expand to fill new opportunities and that old channels will survive. While that sounds like some bullshit coming from the mouths of old media execs trying to save their skins, there is definitely some validity. Television as we know it is not going away. Radio continues to be strong as does in Theater movie entertainment. New Channels mean new outlets and new ways to cross-market as the channels develop. That does not mean that the content businesses that inhabit the old channels will survive. They need to recognize the new opportunities and address them, service their customers wherever they reside and use new media as both new $ opportunities and feeders for old $ plays.
So, UGC is definitely HURTING Old Media because new customers are looking at content Old Media has nothing to do with. It is as though the old media boys are missing out on an entire generation of customers.
Why are they missing out? It is simple....it is because they are fighting the new channel and its fundamentals. In short, people want to see lots of content, see it where they want it, how they want it without paying for it. Rather than riding this roaring current, old media is fighting the rip and while they are not drowning due to the continued vitality of the old channels, they are not participants in the new media play. Worse, they are allowing the biggest disruptive strategy in business history to take a stranglehold around their throats.
If you have read this blog before, you know that I believe that success in the media business is all about disruptive strategies. The old media boys have set themselves up for disruption and if there is a danger that UGC brings it is this. The next play for UGC is the living room and the television set. Interactive TV will mean UGC and free content on the TV and the rights boys are likely to be found with their pants down again.
What should they do? Forget the fight. It is lost. UGC is here. So, instead of fighting a losing fight, ride the big wave....put every bit of image and clip content you possibly can into the UGC world for syndication to any site that wants it (hire 50+ UGC editors to do nothing but put your content into this world). Use YouTube and MySpace as marketing vehicles for going to movies and games, watching shows and games on television and getting consumers to buy rights to better content online. And One last thing....wake up to the fact that users have huge systems that can embrace significant applications. Capture the ardent fan and his or her system with a proprietary client that DELIVERS your amazing content to the desktop along with your ads and upsells! And, help the fan create their own UGC relevant to your content and post it to your environment so that they STAY HOME with you.
Yep, use UGC to create the means by which you acquire and strengthen customers, make $ and siphon the UGC enthusiasm into your world. In short, develop and execute a strategy to disrupt and bypass the biggest disruptor in history- Google!
More to come....
Friday, December 22, 2006
Liberty Out Foxes Murdoch
Rupert Murdoch (L) and John Malone (R); Photo Credits: Getty Images
If you watched the machinations between Rupert Murdoch and John Malone over the recent months you may have been puzzled about why the big fuss. In fact, this amazing game of chess continues in spite of the announced settlement. My take is that Murdoch is being schooled by someone a bit smarter playing a long term game with a fist full of Aces. Murdoch is so tired of this game and so focused on the NewsCorp succession that he may have delivered too much NewsCorp value to Malone, even at the stated price tag of $11B.
To review, Malone, via Liberty Media, had accumulated a very nice position in News Corp. stock, almost 20%, or enough to be able to force Murdoch's hand on many issues, including his planned annointment of a son as successor. In Murdoch's self-centered view, the succession was all that mattered and he lost sight of the value of the Digital TV assets he transferred. Good thing for NewsCorp shareholders that Malone was not after access to the amazing News Corp content assets (Fox, Fox Digital, 20th Century Fox, BSkyB, Star, and MySpace). Or at least the announcement makes us think those remain untouched... Speculation is that once the dust settles, we may see that Malone has some very valuable DTV distribution rights to much of the NewsCorp content.
To Murdoch's one track mind, buying Malone's accumulated $11B News Corp stake for DirectTV stock, $550M in cash and three Fox Sports networks that were outside the NewsCorp focus areas seems a small price to pay to be rid of a very real headache in the succession process. For him it is a no-brainer.
So, a fight over the control of NewsCorp's destiny is avoided and an amicable settlement preserves what remains of the relationship between old friends? That's what the NY based media folks (WSJ, Times) are swallowing.
An even swap they say, done for tax reasons! Believe that? Not on your life!
This deal is the worst of several ridiculously incompetent moves made by Murdoch in proving that time has passed him by. From the post acquisition mismanagement of MySpace (particularly the failure to acquire any benefits from helping launch YouTube!) to the Judith Regan fiasco, Murdoch has been bungling.
Why is the Malone deal so bad? Because Murdoch, for the sole purpose of preserving the NewsCorp crown for a group of unworthy princes (James, Lachlan, et.al.) all but removed NewsCorp from its once articulated play of being an operating systems provider to the emerging digital television world.
For the last ten years Malone has been maneuvering for every piece of digital TV IP he can acquire, aggregating it all in subsidiaries of Liberty Media. But this very successful aggregation of IP was stymied by a lack of content and a controlled network that would allow the Liberty DTV software solutions to develop.
By tweaking the unrivalled Murdoch ego with the acquisition of stock that might stop him from annointing one of his sons as the future NewsCorp king and getting the expected ego driven reaction, Malone got what he needed! He rented some NewsCorp stock for a few months, threatened his rival and walked away with the keys to the Digital TV vault!
What did Liberty get in this stock swap? Insiders say that, in addition to the DirectTV stock, local sports networks and cash, Malone got a license to some very valuable IP in the NewsCorp Israeli subsidiary, NDS (News Data Systems) and a captured customer licensee (content and networks) when Liberty is ready to release its DTV software as Operating System for the DirectTV and Fox Regional Sports Networks! We'll see when the docs are filed unless they make the absurd argument that the cross licenses are not material.
With this deal, Malone emerges as the one true competitor to Microsoft in the DTV software space. With the related content license, he will also be able to reverse engineer his way into web solutions, likely through a MySpace DTV portal.
An amazing deal! Let's watch the filings and activities in the Fox world to see just how good it is for Liberty and bad for NewsCorp.
Subscribe to:
Posts (Atom)
