Synergy Follies, Part XXXVII January 31, 2005Posted by David Card in Uncategorized.
It only took, what, four years?
Time Warner Inc.’s cable unit plans to start offering America Online accounts to its high-speed Internet customers for no extra charge, in a move intended to boost both Time Warner Cable’s Internet business and AOL’s advertising sales.
This is certainly a good move, if long overdue. If Time Warner had done this from day one, Wall Street would have been calling AOL a broadband leader rather than laggard. Which is not to say Time Warner should have made its cable offering uncompetitive by offering only AOL – there needed to be some kind of value vs. premium positioning, which is always tricky. Still, I doubt the Roadrunner brand added a whole lot of value, and it’s not as if it ever bundled tons of Time Warner content.
Time Warner cable is hardly bargain-priced, so the perceived value of AOL will be a plus to some users, and there will be some modest upgrade from AOL dial-up. But this will hardly be a windfall for either unit.
Jupiter analysis on merchandising value-added services.
(Old?) Media vs. Bloggers, Part XXXVII January 29, 2005Posted by David Card in Uncategorized.
Over at Slate, Jack Shafer reminds us that new media rarely replace old media entirely, and blogs are being oversold. He gets (mostly) ripped by the bloggerati, of course, and links to many.
I Wonder if Janet Gets Royalties? January 26, 2005Posted by David Card in Uncategorized.
It’s almost surprising no one else thought of this. Brilliant.
After consulting with the National Football League and News Corp.’s Fox, the network broadcasting this year’s big event, the St. Louis brewer has decided not to broadcast “Wardrobe Malfunction,” a commercial that spoofs last year’s halftime show debacle by fabricating a story of how Janet Jackson’s breast ended up exposed during her dance number.
Even if the spot isn’t funny, I’m thinking Busch will get near-Super Bowl reach online (although not all at once) for little more than the cost of creative. I wonder if they’ll buy any online rich media inventory. They probably don’t have to.
Spikes and Spandex January 24, 2005Posted by David Card in Uncategorized.
Still, the commercial runs the risk of turning off consumers who may deem it far too fierce or dislike the idea of associating athletes to warriors when the world is racked by war…
…”The challenge for advertisers and marketers,” he (Allen P. Adamson, managing director at Landor Associates) added, “is to judge where the balance is at any given point in time, and capture the competitiveness but not lose the sportsmanship values of teamwork and camaraderie. You can play near the line and be O.K., but stepping over it can be risky for a brand.”
I’m sure Wieden & Kennedy is very concerned about that.
Serendipitous Synchronicity? January 23, 2005Posted by David Card in Uncategorized.
The editorial page of the Sunday Times juxtaposes an editorial defending Darwinism with one that takes American Idol to task for weeding out its contestants too harshly. I’m not sure what to make of this.
Fast-Moving Media Industry? January 20, 2005Posted by David Card in Uncategorized.
In a predictable but otherwise entertaining article on the future media mogul line-up (what, no Steve Jobs?), USA Today reports this specious quote from NBC Universal CEO Bob Wright, who should know better:
“The exciting part about the media business is that things can happen quickly, because you’re not dependent on bricks and mortar.”
What hooey. The media industry moves slower than many (technology, financial services, pharma, even retail) because of the following:
– Deals. Everyone owns a piece of everything (and a piece of each other), and talent contracts always reflect their predecessors.
– Consumer behavior. Fans are fickle, but they take a long time to make fundamental behavioral changes.
– Advertising. If anything’s slower to change than media, it’s the advertising industry.
And, like baseball managers, nobody ever really gets fired, they just move on to another team.
Yahoo Q4 Highlights January 19, 2005Posted by David Card in Uncategorized.
If I were the kind of poster that used words like “spectacular,” I’d be tempted to do so in re: Yahoo’s Q4 and 2004 yearly results. Ad revenues (less fees paid to network partners) were up 20% sequentially and a whopping 57% year over year to $618M. Fees(consumer and small business) up 24% sequentially and 52% year to year to $129M. Listings (Hotjobs and directories) up 2% and 15% to $38M. Tidbits from the earnings call:
– Giving less and less guidance on the difference between paid search and branded advertising, which implies that branded grew faster this quarter
– Gross revenues were $3B for the year, up 150%. Yahoo is definitely gaining share.
– Big advertiser branded spending was up 55% for the quarter, year to year. Later said that was up 39%, which I assume meant for the full year
– Double digit growth across all 9 verticals. Leading growth verticals in order: telco, auto, retail, financial, CPG.
– Category spending for paid search in 03 was travel by a big margine over retail and financial. In 04 retail grew fastest and is now number one, with the other two categories close behind. Newer categories with significant growth and notable share include auto, technology, and telco.
– Apparent seasonality patterns: branded advertising’s strongest quarters are Q2 and Q4; search’s are Q1 and Q4. (This year’s Q3 in search was stronger than expected, which might mean that Q2 was weaker or might be an early indicator of continuing trends – Yahoo execs weren’t sure how to interpret.)
– Search revenues paid out to partners were up 14% in Q4; rates were flat
– Dollars per search click were flat sequentially in the US because of the mix shift toward lower-priced retail
– Yahoo execs ducked a question about sold-out branded inventory, but said big advertisers were buying across the network and that Yahoo was creating new inventory, muting the impact.
Paid Content & Services (Fees)
– 165M active registered users, up 31% year to year
– Bragged about comScore Media Metrix data that showed average time spent per user was up
– 8.4M paid relationships, up 800K from the previous quarter and up 3.5M year to year
– Biggest growers in paid relationships: Rogers Cable bundle in Canada, Musicmatch (acquired), Fantasy Football
– Growth will slow in Q1 because there aren’t any new deals on the table and there’s a tough comparison because of Fantasy
– Target for 2005 is 11 to 11.5M total (2.6 to 3.1M net adds); maintaining the $3-$5 per subscription average
CEO Terry Semel highlighted the following as four key 2005 objectives:
– Build deeper engagement with users as Internet “becomes My Media, where the user is the programmer.” Key pillars Yahoo will build on: search, community, personalization, content.
– Play a greater role in users’ connected lives during “the convergence of broadband and wireless.” Wireless especially.
– Increase international growth
– Gain share in advertising, primarily by beefing up tools and services for advertisers
Media and Technology in 2005 January 14, 2005Posted by David Card in Uncategorized.
We’re still waiting on what is the killer app/business spawned by US home Broadband Critical Mass. I don’t think it will be video or music, at least not by themselves. In fact, I’m beginning to think this technology inflection will be disruptive, rather than creative. That is, it will have a big effect on market share or consumer behavior, rather than launching incremental business opportunity. I’m thinking broadband critical mass might be the opportunity for a new portal – one that takes advantage of the always-on fat pipe to the home – to eat into the Yahoo/MSN/AOL trio, and maybe steal some ad revenue share from the big four (them plus Google). Let it be fueled by rich media advertising.
I was premature in predicting Paid Search Backlash. So I’ll say it happens this year. At the same time, 2005 is the year the showdown between Local Paid Search and classifieds and the Yellow Pages gets interesting. Another backlash? How about a Blog Backlash? No real traffic or advertising revenues to speak of, even if they’re good at spreading memes (among each other) and the mainstream press reads ‘em.
Clients are asking Jupiter a ton of questions about Wireless Content. Not in 2005.
Pay attention to the as-yet mythical Home Entertainment Hub. I don’t think 2005 is make or break, but we may see something emerge. Multiple functions off a single box makes sense if you’re a PC manufacturer, less so if you’re a consumer. The year DVRs start to matter. Watch the home UI. HP is wise to recognize there’s a PC audience and one that’s more like a TV audience. If only their box skedded for 2H05 ran Tivo…
Two big themes we’ll be watching in 2005 media: How can media companies cultivate audiences in a world of consumerer control and On-Demand Everything? And how can they use the Internet to Feed the Fans?
Longer-term, If e-mail marketing is the old thing and paid search the new thing, What’s the New New Thing?
Some Observations on 2004
Last year, Google became the most important company in IT. Not in the Internet, in all of IT. As in “replacing Microsoft.” The IT analyst punditocracy still hasn’t recognized that. Choose your advisors wisely.
As predicted, sponsored media was huge in 2004. Oddly, it hasn’t had a big impact online yet, except in movie marketing.
I’m still waiting for AOL to turn the corner (or not). Maybe AOL will be the one to exploit broadband critical mass. Time Warner and AOL have the right assets, but do they have too much baggage? And the brand?
Requisite Flippant Management Prediction:
Pixar will make up with Disney, and re-sign the distribution deal. Question is, will it take an early Eisner retirement to make it happen? Odds are that it will, with Bob Iger the path of least resistance.
Future of Media? January 12, 2005Posted by David Card in Uncategorized.
This is pretty good. Unfortunately, it’s eight minutes long, but bear with the first four minutes – which are tedious – because the last four are amusing and even thought-provoking.
Spoiler: NY Times ends up “a newsletter for the elderly and elite” by 2014.
Flash-based iPod Shuffle First Take January 11, 2005Posted by David Card in Digital Home & Personal Tech.
It’s very good-looking:
I was ready to go thumbs-down on any device that can hold more than 50 songs without a good way of navigating. I still think that’s an issue, but there’s a reason they’re calling it shuffle. The new model is all about loading it up with some – not all – songs from your collection and shuffling through them. There’s even a way for iTunes to randomly fill up the new iPod. Very clever. At $99 (half-GB) and $149 (1GB) it’s even pretty aggressively priced. They’ll sell a lot of ’em.
There should be no cannibalization threat or pricing issues versus the hard drive models. The iPod shuffle will deliver a different music listening experience, I suspect, than the bigger iPods. Great for commuting and the gym.
I still think the next killer music device is a $100-$150 (partially subsidized?), 2GB model (with a screen) that synchs with Janus-enabled portable rentals from a subscription service. Dunno if we’ll see them this Christmas, but we might. Not from Apple.