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Missing Link for Music Marketing? February 27, 2008

Posted by David Card in Media.
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Intriguing disconnect from my panel at Digital Music Forum East this morning. Amidst the usual — is it, what, 10 years now? — running whine-fest about the major labels vs. the start-ups, I asked some of the New New Thing social media start-ups what they could offer to a label or music management company or artist who had $40K to spend on marketing.

Their answer: nothing.

Fellas, the definition of a media business is somebody who matches up content, audience, and marketer. This is a (dying?) industry that desperately needs to cut costs in A&R and marketing to survive. And the online is the most promising music marketing medium ever.

You might want to invest in creating services and tools that marketers could make use of. Let me assure you MySpace, Yahoo, Microsoft, and AOL are doing so, even if their music coolth is warming. Not so sure Facebook is. Yet. And, for the moment, Apple appears to be blowing this opportunity. So hop to it.

RIP Bill Buckley February 27, 2008

Posted by David Card in Media.
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As rat-faced, conservative, WASP Yalies go (is that a redundancy?) he was a very funny and thoughtful one. I’ll miss him.


Panel-Moderating at Digital Music Forum February 26, 2008

Posted by David Card in Media.
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I’m at Digital Music Forum East tomorrow. I know I’ll see you there; all the hipster digi-music types will be in town.

Jupiter Clients React to Potential Microsoft-Yahoo Merger February 23, 2008

Posted by David Card in Media.
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Microsoft’s passing around a memo from platforms & services chief Kevin Johnson to its employees about its proposed merger with Yahoo. In it, it reiterates what it perceives as the benefits of the merger, with a particular focus on the goodness for the industry:

    First, the industry needs a more compelling alternative in search and online advertising. I have personally met with top executives of the major media companies, and I know there is a desire for more competition in search and online advertising…
    …For advertisers and publishers, scale economics would allow us to deliver more value to this customer base. By combining search and non-search advertising inventory on a single ad platform, yield is also improved. The other benefits and opportunities may include improving return on investment and decreasing the cost and complexity of running multiple campaigns. We also believe in an extensible ad platform. From my discussions with top advertising agency executives, they share this belief and want to play a key role in extending this ad platform for incremental value to advertisers.

We did a quick survey of about 50 Jupiter clients — a fairly even mix of publishers, marketers, and service providers — and they pretty much agree. There’s a modest positive tilt to the responses, with a few caveats.

– 50% thought it would make buying and optimizing search marketing easier, while only a quarter thought it would make it harder.

– The split was closer, but still positive, on remnant inventory (39% to 25%) and on premium display (33% to 21%).

– Less than a third of the respondents were concerned that a merger would result in decreased traffic quality for any of the three ad types. Jupiter search analyst Evan Andrews points out this either means they’re seeing the glass half full, or that they haven’t yet thought through the implications of merging the two search buckets, which taken individually to-date have not delivered the quality or ROI that Google advertisers (and publishers) have enjoyed.

– And there was concern that prices would go up in premium display (50% were concerned), remnant display (42%), and search (54%).

I’m not convinced that — outside of a few content categories like personal finance, portal home pages, and, maybe, auto — a merger of Microsoft and Yahoo properties would create a large enough concentration to tilt competitive pricing its way. Still, there’s no question there would be increased concentration overall.

Jupiter estimates that the $20 billion 2007 US online ad business broke down like this:

Google – 31% (up impressively from 25% in 2006)
Yahoo – 14% (down a bit)
and Microsoft and AOL flattish at 8% apiece. MSN actually outgrew the other two portals, but couldn’t keep up with Google. (These figures are what the companies keep, that is “ex-TAC” or minus the money they pay out to their network partners. That’s another several billion dollars passing through their machinery.)

And finally, because we do this for a living, I have to gripe about numbers. Microsoft’s Johnson throws out a figure of $80 billion for online advertising in 2010. Even if that’s worldwide, and even if he’s counting mobile, that number’s too big, and smells of Wall Street calculators. We don’t forecast markets outside the US and Western Europe yet, but the markets we do project will generate about $48 billion in 2010 online (if I’m converting euros properly) and another few billion dollars in mobile. There’s no way Asia-Pacific and Latin America will amount to $30 billion that fast.

Jupiter podcast first take on the potential merger
US online advertising forecast
W. Europe online ad forecast
US mobile marketing forecast
W. Europe mobile advertising forecast
Or check out Quantify for a quick way to digest the numbers.

Happy Birthday, YouTube February 15, 2008

Posted by David Card in Media.
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YouTube is three years old today.

Ponder that. And dream.

3D Will Never “Save” the Movie Theater Business February 14, 2008

Posted by David Card in Media.
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There’s a throwaway graf in an otherwise solid Wall Street Journal story about the showdown between 3D concert movies from U2 and Hannah Montana that really bugs me:

    The situation underscores the challenges of 3-D technology. The industry is touting 3-D as its best shot at combating increasingly sophisticated home-theater systems.

I sure hope it’s the reporter, and not the industry, that thinks 3D is the best shot. Until they pass out individual headsets that generate the picture — not goggles — in theaters, a single-user device will always deliver a better 3D experience. Really great 3D depends on a single focus point. If you have a lot of people in a big room looking at the same source from different angles, you’ll only ever get mediocre 3D effects. If there’s a real demand for 3D movies, a home system would ultimately be able to deliver it better.

It’s no coincidence that the Hannah Montana 3D concert movie is what we’re talking about. A concert is a much better experience when you can share it with a big group. (Horror movies and comedies often work that way, too). The way for cinemas to combat home theaters is to make the group experience better, and accentuate the fact that going out to the movies is going out to the movies.

Mark Cuban, who knows a thing or two about movies, entertainment, and technology lays it out here. Note that a commenter calls 3D the solution, not Cuban.

Signs of the End of Western Civilization, Part LXII February 14, 2008

Posted by David Card in Media.
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Seen this morning on a bus billboard: “Clay Aiken in Monty Python’s Spamalot.”

We’re Hiring February 12, 2008

Posted by David Card in Media.
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Funnest job in the bidness.

Associate Analyst, Music and Media
San Francisco, CA or New York, NY

A media analyst at JupiterResearch is a thought leader and industry figure in the fastest-growing sector of entertainment and media. JupiterResearch’s brand and resources, combined with your skills, provide a platform for the analyst to understand and guide the industry forward, assisting companies in capitalizing on digital media, and, in the case of music, perhaps “saving the industry.” The music and media analyst works with the media and marketing team to advise clients on building the most profitable online and digital strategies by analyzing best practices, implementations, and business objectives.

“Seven and a Half Cents Doesn’t Mean a…” February 10, 2008

Posted by David Card in Media.
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Hollywood writers, if I were you, I’d take the deal. The LA Times has some details on the contract the studios and networks offered to the Writers Guild of America yesterday. The contract would pay a fixed rate of $1,200 per year for one-hour shows streamed over the Internet during the first two years of the new contract. Then 2% residuals kick in. Some shows produced for the Internet would count. The story doesn’t say whether DVD rights were re-negotiated, but that probably means they weren’t.

Why take the deal? Two reasons:

There’s not much money in Internet video yet. It’s more valuable for promotion for the next two years. Jupiter estimates it’ll be worth less than $2 billion cumulatively, taking in a good portion of video advertising ($1.3B for 2007-2008), some chunk of display advertising, and consumer spending on online video ($400M for 2007-2008).

And this is true:

    “The reason for this strike was to make sure we had coverage of the Internet, that it didn’t become a guild-free zone, and I think we accomplished that,” said Warren Leight, executive producer of “Law & Order: Criminal Intent.

AOL Q4 Advertising Results February 6, 2008

Posted by David Card in Media.
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According to documents posted at Time Warner, AOL’s ad business looked like this:

Total ad revenues for 2007 – $2.2B, up 18%.
Domestic ad revenues minus revenues shared back to Ad.com partners (ex-TAC) – $1.4B, up 12%.

Total Q4 ad revenues – $620M, up 10%
Q4 ex-TAC revenues – $375M,up 4% year to year and 14% sequentially

It looks like AOL underperformed the US online ad market in 2007 — Jupiter has 2007 growth across all formats, types, and categories at 21% to $19.97B. It also looks like AOL has at least tuned up — if not fixed — its Q3 problems. But that’s not a particularly inspiring Q4. I’m typing this up because MSM doesn’t seem to be doing so as they write up the earnings call.