Connected TV advertising proponents will appreciate this bit of research: Connected TV consumers prefer ad-supported content to paid, ad-free content. A new survey pushes the idea that connected TVs will be a major opportunity for TV advertisers, per research done by Frank N. Magid Associates, commissioned by digital advertising company YuMe. Connected TVs are growing, and 30% of Internet-connected households have some form of connected TV, the survey notes. Some 60% prefer 15-second to 30-second ads over a monthly subscription or the pay-per-view model for short-form video. Forty-four percent feel the same way when it comes to streaming TV shows. Data also shows that nearly 90% of connected TV users notice ads on the digital platform, with the majority of pre-roll ads -- 57% -- noticed by users. Nearly 70% of connected TV users are likely to interact with a relevant ad, and nearly 20% purchased the product mentioned in the ad. Connected TV users streamed movies the most -- at 31%, with TV shows from the Internet at 29%. Next came some short-form content (26%), streamed a bit more frequently than they viewed TV shows on networks (24%). Mike Vorhaus, president of Magid Advisors at Frank N. Magid Associates, stated: "Advertisers and major brands will appreciate the rich findings for what is arguably the most explosive platform for video distribution and video advertising over the next several years." The survey came from 736 connected TV owners and users in May and June of 2012.
AT&T's plans for the FaceTime video chat iPhone app violate Net neutrality rules, public interest groups contend.The telecom confirmed late last week that it will only allow consumers to use the app on its 3G mobile network if they subscribe to the new shared data plans. Consumers who continue to subscribe to older, individual data plans will only be able to use FaceTime on WiFi networks.Consumer advocates Public Knowledge and Free Press say that AT&T's decision to restrict FaceTime for subscribers on older plans violates a neutrality rule that prohibits wireless providers from impeding consumers from using competing apps. "They're blocking a class of customers from accessing an application that directly competes with AT&T's voice service," says Joel Kelsey, policy adviser at Free Press.He says AT&T's move will thwart consumers on non-shared plans who want to use FaceTime for voice calls. Subscribers to AT&T's older plans typically pay for calls by purchasing a block of minutes (such as $40 a month for 450 minutes), and also pay charges for the broadband data they consume (such as $30 a month for 3 GB of data). Telephone calls made through apps like FaceTime aren't counted against subscribers' voice minutes, so some consumers theoretically could save money by purchasing an older plan and using an app to make phone calls.AT&T spokesperson Mark Siegel disputes that the company is blocking the app. "FaceTime is available to all of our customers today over WiFi, and we’re now expanding its availability even further as an added benefit of our new Mobile Share data plans," he says.But Free Press says that consumers shouldn't be restricted to using the app over WiFi when they pay monthly fees to use AT&T's data network -- which often is available in locales that lack WiFi."If you're paying for 3 GB of data per month, you should be able to use that however you want," Kelsey says.Public Knowledge Senior Staff Attorney John Bergmayer adds that AT&T lacks a justification for restricting the app to people who subscribe to shared data plans. "Although carriers are permitted to engage in 'reasonable network management,' there is no technical reason why one data plan should be able to access FaceTime, and another not," he says.Although Free Press and Public Knowledge say that AT&T's plans conflict with the FCC's neutrality regulations, it's not yet clear that those rules are enforceable. Verizon and MetroPCS recently challenged the neutrality rules in court. They argue that the FCC lacks authority to regulate broadband, because it is an information service and not a telecommunications service. The companies have asked an appeals court to vacate the regulations.
Canada’s Tourism Commission is seeking the input of its residents in the creation of a video to attract more travelers. The "35 Million Directors" project is aimed at attracting visitors from around the world to come and explore Canada. Canadians can upload experiences from coast to coast to coast, videos or images, to a new Web site. Footage and photos must showcase Canadian travel experiences, such as a favorite hike or music festival. The video will include moments that "whet the appetite of international travelers looking for unique and authentic examples of what is available across Canada," according to the CTC. The call for submissions includes a contest with prizes for the best entries and also a random drawing. The contest runs until Sept. 16, when the CTC will then look at the story-line Canadians have created, select the best entries, and mix in the work of a few professional directors to create a grassroots video advertisement to inspire travelers from around the world to visit Canada. The goal of the project is to create a story from the point of view of Canadians and what makes them proud, says CTC President Michele McKenzie. "We hope Canadians are out there this summer enjoying what our country offers whether on a trip or during a lunch break,” McKenzie said in a release. “Many are already capturing what moves them on phones and cameras and sharing with friends and family. We want to share these images big time with the world, and add a grassroots dimension to our marketing efforts in attracting more and more international visitors to Canada." Inspirational help will be on hand as well from Canada's talent pool. Visual artist Douglas Coupland has posted his own video. Film-school students are encouraged to upload clips of their own. The final two-minute video will debut at the Tourism Industry Association of Canada Congress in November and be shared with Canadians before CTC starts using the video in international travel campaigns.
The major ad-marketing holding companies didn’t let a just-okay U.S. economy and a recessionary climate in parts of Europe prevent them from posting big profit gains in 2011.According to a new report from research firm Marketing Services Financial Intelligence, combined holding company profits in the advertising and marketing services sector were up nearly 30% last year versus 2010. The firm tracked publicly traded companies -- such as WPP, Omnicom, Publicis, Interpublic, Aegis, and Havas, as well as smaller firms -- such as the UK’s Creston, among others.Combined revenues for the group rose by more than 8%.The rankings of the five biggest holding companies, by revenue, didn’t change. WPP retained the No. 1 position with nearly $14.3 billion in revenue -- followed by Omnicom, which had nearly $13.9 billion, per the report. Publicis Group was a distant third with about $7.6 billion, followed by Interpublic Group with $7 billion.Dentsu rounded out the top five with nearly $4.2 billion in revenue. Its acquisition of Aegis Group, expected in the fourth quarter, will make the Tokyo-based company a closer fifth, with about $6 billion in revenue.While WPP was tops in total revenue, Omnicom had higher revenue growth -- 10.6% last year versus WPP’s 7.9%. "WPP will be hoping that its recent acquisitions of AKQA and Press Index will help to keep it ahead" of Omnicom in the total revenue column for 2012, stated Bob Willott, the MSFI editor who oversaw the report.The report also noted that operating profit margins improved for the third consecutive year, averaging nearly 15%. Borrowing costs continued to rise and absorbed 10.8% of operating profits.
The next few weeks could see sweeping changes at Hulu triggered by the exit of co-owner Providence Equity Partners, according to an internal memo obtained by Variety. The memo, drafted in July, claims that the buyout of the private equity firm, which owns 10 percent of Hulu, would be completed in September by the video venture’s other corporate owners Disney, News Corp and Comcast, which each own 30 percent. This event would also make it possible for top Hulu executives whose shares have already vested to cash out. A source tells Variety that Kilar alone could cash out at close to $100 million and then decide to leave -- a possibility that Hulu’s co-owners seem to be taking seriously. A second consequence of the Providence exit could be changes to Hulu’s licensing agreements, which could lead to Hulu losing exclusivity for some of its content. One major stumbling block appears to be that Disney and Fox don’t agree on how the video service should be run going forward (Note: Comcast, which also owns close to a third of Hulu, waived its rights to manage the company’s affairs as a condition of its merger with NBC Universal). Among other things, the report indicates that Disney and Fox are at odds over authentication. Fox wants users to log in with either their Hulu Plus or pay-TV account details to get next-day access to its content, while Disney has no interest in this type of authentication.
The latest comScore figures show that Facebook has overtaken Yahoo for the No.2 slot in video, trailing Google’s YouTube. This isn’t the first time this has happened; back in August 2010, Facebook pulled off this feat, but Yahoo managed to usurp its slot soon thereafter. At the time, I asked comScore if the views that Facebook gets credit for on comScore's include a- only views in Facebook's player b- embedded on Facebook.com's but using third party players (ex: YouTube) c- both The answer surprised me: it was a, the views that comScore gives Facebook credit for only include those limited to Facebook’s own player. Now raise your hands if you’ve ever seen a Facebook player in the wild? Obviously those are user-generated videos that Facebook members have uploaded, probably not very attractive to marketers. Facebook is indeed a social networking site built around photo-sharing. Its pending acquisition of Instagram was intended to address Facebook’s weakness in mobile, but the fact that Instagram posed a direct threat to Facebook’s core photo-sharing functionality was the fear factor that drove Mark Zuckerberg to shell out $1 billion for the nascent company. With Facebook’s stock off by 50% of its IPO price, one has to wonder if Mark Zuckerberg and his brain trust are considering a shift in strategy with regards to video (and possibly, content, too). If you think about it, the main value creators in video and media have indeed been the aggregators/distributors. As such, Facebook’s massive audience of nearly 1 billion users makes it a very potent force in the media landscape, but it has yet to realize that potential. Mark Zuckerberg has adopted a neutral tech-platform stance that has left a lot of money and value on the table. It’s worth noting that Google is now morphing rapidly into a media company. It’s not creating video content yet per se, but it is funding it at a massive rate. One company that has always had media and video creation at its core is Yahoo. It’s worth noting that according to comScore, from August 2010 to July 2012: - Google (YouTube) grew from 146,274,000 uniques and 1,903,240,000 video views to 156,999,000 uniques and 19,588,510 video views (a 10x growth in video views); - Facebook went from 58,596,000 uniques and 243,210,000 video views to 53,045,000 uniques and 327,801,000 video views (so uniques fell while views grew); - Yahoo went from to 53,929,000 uniques and 229,087,000 video views to 48,693,000 uniques and 625,077,000 video views (so uniques fell while views grew). If those numbers are accurate and the methodology hasn’t changed, they further stress the reality that users are increasingly turning to YouTube for video content, but Facebook and Yahoo have grown video views thanks to a rising tide in video creation, consumption and sharing. Ironically, in August 2010, Facebook’s focus was solely in “products,” while Yahoo’s was on content -- but with Facebook’s stock at 50% off the IPO price and Yahoo hiring Marisa Mayer as CEO (who is poised to focus on technology and products, even though I think eventually she will focus on Yahoo’s strengths), it’s entirely possible that Yahoo will focus on productizing video, while Facebook (at least starts to) look at content. That doesn’t mean that Facebook will or should create content, but with that massive audience, the right mix of creation, curation and aggregation would overnight propel Facebook into a juggernaut in the space, instead of merely the dumb pipe it now occasionally serves as. Ultimately, while Google is trying to attack Facebook via Google+, Facebook could in fact return the favor by attacking Google at the heart of its video strategy (YouTube), and hold on to its lead at number 2. Of course, with Mayer at the helm of Yahoo, it’s clear that she will do everything she can to reclaim the second spot. Regardless of what happens, it will be an interesting race to watch.
This week Sony announced that its Crackle video player app has been downloaded over 11 million times. It launched a Windows Phone and Nook Tablet version with Kindle Fire on the way. It also launched a version 3 of its app across all other platforms. In a relatively quiet way, the company has delivered the Crackle brand to the Xbox 360, Roku box, Sony BD players, the PS3, Google TV, and of course, Sony connected TVs. The interesting thing about Crackle is that it is fully ad-supported on-demand TV and movie viewing. The catalog admittedly is not nearly as comprehensive as Hulu’s or Netflix’s, and does not approach the premium content quality of an HBO Go. But it is free, and it is available almost everywhere that its paid rivals are. This is a fair place to find a fair catalog of b-grade titles with a smattering of more attractive features. It reminds us of the early days of Netflix’s streaming media catalog -- before the company figured out that this was the core of its business. And of course the catalog is heavy with Sony-owned content from Sony and Columbia. Hey, Sony is Sony. These guys are nothing if not proprietary and obsessed with “synergy.” Most notably, Sony is throwing some of its money around with exclusive series like Jerry Seinfeld’s "Comedians in Cars Getting Coffee" and a music series from Radiohead producer Nigel Godrich. Sony’s biggest weaknesses as a media and hardware company continue to show here. Crackle’s eagerness to create a platform of its own with little regard for partnerships, other players, or consumer convenience is evident in the limited catalog and the relentless pushing of its own content. In most things it does, there is a ham-handed obtuseness to the company about consumer ease of use. Proprietary memory cards and disc (remember the PSP UD drive?) and even weirdly oversized AC adapters for their handheld game consoles are all hallmarks of Sony myopia. The mobile app versions of Crackle all use the term “Watchlist” for compiling queues of content, but the Web site has your Queue. Whether and how the apps synchronize with one another is still a bit of a mystery to me too. For reasons that are entirely beyond me, Sony has a habit of making some of the most unappealing and unfriendly interfaces for its devices, and that shows through here. The interface niceties of Netflix and Hulu are absent here. The iPad version of the app has an undersized and cheesy networked ad banner that feels like a blown-up mobile ad. But Crackle is ad-supported -- a model for on-demand content that can’t be ignored. As the TV and on-demand everywhere models evolve on devices, there surely will be a place for alternatives to the paid models that dominate elsewhere. While Sony’s marketing of Crackle and its design sense do not inspire confidence in the brand’s path to success, there is always the chance they will trip into something here.
Mark Zuckerberg is yet to reveal to his investors his strategy to generate meaningful revenue from mobile traffic. I’m thinking Zuckerberg could be planning something big, and Facebook is fortunate to actually have the #1 guy in America to figure that out: Gokul Rajaram (you can read what Business Insider thinks). If you remember Google when it was just a search engine, and before Google had an “Adsense” product, it’s because Rajaram was yet to be at Google. Upon his arrival, the way Internet was monetized has changed, with “Ads by Google” widgets starting to pop on nearly every page on the Web. Solving Google monetization is one big achievement. Now it’s Facebook’s turn, and rest assured – I’m sure Rajaram is on it. Facebook’s monetization challenge is unique, as it is not necessarily trying to solve its own problem, but rather solve an industry problem: mobile. The mobile screen is small. On a per ad-unit, mobile ads actually make higher RPMs, but you can only display 1-2 ads, versus desktop ads where you can display 20 ads that make less money each. Mathematically speaking, then, the solution need to be some sort of media/invention that generate per real estate substantial higher RPMs than regular mobile ads, to compensate for the smaller number of ads. Could the solution be Facebook Video? I don’t know the answer However, let’s do some “If A=B, and B=C then A=C”: - “Premium “video generate $25-$60 over lower single digit for display ads. - YouTube has been around for almost 10 years. Industries in the past have been more likely to change in a big way every 10 years. - YouTube realized that UGC generates no money and premium makes a lot. For that it created the Partner program and got premium publishers to give it content. Facebook needs some sort of high-CPM media to boost its mobile traffic with $ - Who has an existing premium video business? (Hint: it’s not YouTube. Read next bullet). - Netflix CEO Reed Hastings last week was reported to buy $1 million in Facebook stock. Hastings is also a Facebook board member. Now granted, please note that Netflix is not based on ads, but will we see a revolution coming from some sort of partnership, -- the king of social and the king of premium content? Maybe not Netflix but someone similar (“a Netflix”)? = Facebook + “a Netflix” > Youtube = Facebook + “a Netflix” = making headway to monetize mobile traffic? I think big companies must remember that every 10 years people will give an alternative solution a real chance. Yahoo to Google. MySpace to Facebook. RIM to Apple/Android. I don’t know how a video product would look like on FB. Would it bead-based, subscription based, auto-play, click-to-play? I’m not sure. But can premium video help Facebook’s mobile monetization? I think so. And is it a great target to try and win YouTube’s business? Absolutely.