As the competition in the online streaming space (Amazon, Hulu, etc.) gains steam, Netflix is looking to differentiate itself through exclusive content, according to a Wall Street report. A signal: a new deal with Disney giving it sole rights to a slew of films in a pay-TV window. As Netflix tries to build a moat around its content, a potential long-term implication is the service becoming “somewhat more likely to eventually gain carriage from a traditional cable or satellite distributor,” according to Barclays analyst Anthony DiClemente. The emerging Netflix strategy would have it relying more on a less-extensive portfolio, but one with “scarcity value,” DiClemente writes in a report. A notable example has been a deal with AMC, giving it exclusive rights to prior seasons of “Walking Dead” and “Mad Men.” The approach could pose somewhat of a challenge to large content providers (Disney, News Corp., etc.), which have relished the opportunity to sign nonexclusive deals with Netflix, allowing them to also collect subscription video-on-demand (SVOD) dollars from Amazon and others. SVOD options have brought cash windfalls and a chance to monetize library content. Programmers could now charge Netflix more for exclusivity, making up for any lost revenues from double- or triple-dipping. DiClemente suggests in negotiations between Netflix and digital SVOD providers, programmers will continue to “maintain leverage” as they offer up more recent content Netflix could want. Plus, Amazon has money to spend; it has not shown the same emphasis on exclusivity, while new entrants, such as the Verizon/Redbox venture, could play a role in raising bidding prices. (The Barclays analyst notes that while the largest programming distributors have warmed to Netflix and Amazon, one holdout has been Scripps Networks, which has sought to gain TV Everywhere revenues from distributors. (It has been suggested that digital distribution might offer “cannibalistic threats” to its linear programming in the ratings area.) The overarching conclusion from DiClemente is that content providers have enough to satisfy the multiple digital distributors by artfully dividing content, which as consumer demand increases, “will ultimately translate into more digital dollars, not less.”
Just as some folks were settling on their couches for a long winter’s eve of marathon movie streaming the night before Christmas -- from “Jimmy” to “Bing” to “Macaulay” to Miss Piggy –- Netflix went kerflooey.It was a “snafu” of the variety that “rattles customers,” the hed on the Greg Bensiger’s story in the Wall Street Journal tells us. “Netflix said the outage lasted nearly half a day for some of its users, and stemmed from problems with Amazon's Web Services unit, or AWS, which manages online operations for many companies.”Indeed, it was actually Amazon.com‘s servers in Northern Virginia that went kerflooey, leaving some of its cloud service customers –- most notably Netflix –- “with a bone to pick,” as the Forbes hed puts it. That’s particularly since “at the same time, millions of Amazon Prime subscribers were free to watch “Thor,” “Deep Impact,” “Everything is Illuminated” and a hodgepodge of other films and TV shows, writes Louis Bedigian. It turns out that Amazon’s own streaming service did not suffer a similar glitch.The New York Times’ Brian X. Chen talks to a Long Island couple who “decided to ‘nerd it up’” by playing a few games of Minecraft when the episode of “It’s Always Sunny in Philadelphia” they were viewing “started to stammer and finally froze.”On the positive side, a Netflix spokesman tells him, “We are happy that people opening gifts of Netflix or Netflix-capable devices on Christmas morning could watch TV shows and movies and apologize for any inconvenience caused Christmas Eve.”CNN’s Doug Gross, meanwhile, kept his eye on some Twitter feeds and offered a few gems from disgruntled and disheartened Netflix customers:"So @netflix is down? Great. Now everybody has to talk to their annoying family," wrote Chris D'Elia (@chrisdelia)."So depressed about Netflix being down that all I wanna do is lie on the couch and watch Netflix," tweeted Jess Dweck (@TheDweck).But Aaron Zamost (@zamosta) gets to the heart of the matter when he tweets: "Amazon Web Services crashes on Christmas Eve, taking out Netflix but not Amazon Video. Somewhere, (Amazon CEO) Jeff Bezos reads ‘The Grinch’ to his kids.”While Tweeters –- as is Hollywood itself –- may be great at weaving conspiracy theories, many analysts point out that Amazon would not shoot itself in the foot by sabotaging a rival streaming service.“The latest service failure comes at a critical time for Amazon, which is betting that AWS can become a significant profit generator even if the economy continues to stagnate,” points out Reuter’s Jim Finkle. “Moreover, it is increasingly targeting larger corporate clients that have traditionally shied away from moving critical applications onto AWS.”"Our goal remains to make our operational performance indistinguishable from perfect, and we know we have more work to do," an Amazon spokeswomen tells the WSJ’s Bensiger. "Our operational performance has been quite strong over the last seven years and is one of the key reasons we've grown as quickly as we have."And while Netflix and others may be weighing their options and planning for future contingencies, the holiday glitch is “unlikely to severely hurt a fast-growing business for the cloud-computing pioneer that got into the sector in 2006 and has historically experienced few outages,” writes Finkle."The benefits still outweigh the risks," Global Equities Research analyst Trip Chowdhry tells him. "When it comes to the cloud, Amazon has got it right."The larger question for companies such as Netflix that rely on AWS, writes Reuters’ Finkle, will be” how they configure their services and allocate their service requirements across multiple providers to mitigate over-dependency and risks.”For Netflix, “service was eventually restored the next day, but that’s quite an oops,” writes Robert Powell in the “Telecom Ramblings” blog. And even though he’s sure the outage was “unintentional and coincidental … Amazon’s position as both wholesale cloud provider and retail cloud streaming provider looks like a channel conflict that could arise elsewhere just as easily.”The relationship between Netflix and Amazon, in fact, is a prime example of an emerging trend toward “’coopetition,’ as in cooperation plus competition,” writes Dan Bobkoff in American Public Radio’s “Marketplace.” It’s an indication of “just how complicated the borders between companies have become,” Eric Clemons, a professor at the Wharton School at the University of Pennsylvania, tells him. Or, says Ethan Kurzweil, vice president at venture capital firm Bessemer Venture Partners, “Frienemies. That’s another way to put it.”Indeed, as Google and Apple have demonstrated time and again, “a frenenemy of yours is a frenenemy of mine.”
Ending the year on a sour note, Netflix left millions of U.S. users without service on Christmas Eve. By Christmas Day, the streaming service was back to normal, according to a company tweet. “Special thanks to our awesome members for being patient. We're back to normal streaming levels. We hope everyone has a great holiday.” Yet, the outage couldn’t have come at a worse time for Netflix, as subscribers were no doubt relying on the service to entertain visiting in-laws and children restlessly waiting for Santa’s arrival. “Terrible timing!” Netflix admitted in a separate tweet. The company has about 30 million streaming subscribers worldwide, 27 million are in the Americas region, which was subject to the outage. Netflix is also currently engaged in a fierce battle with Hulu Plus, Amazon Prime, and a host of other streaming media services. Service failures don’t help companies gain market share. The company is still repairing its image among many consumers following a botched service change in 2011. Netflix CEO Reed Hastings notoriously introduced a new subscription plan that would have made it more expensive for users to receive movies via the mail and online, which was reportedly enough to scare away some 800,000 subscribers. Working in Netflix’s favor, consumers continue to embrace over-the-top -- or OTT -- video services. In fact, half of U.S. consumers now view OTT video through broadband connections on their TVs, in addition to the content they traditionally watch via cable or satellite, according to recent findings from Accenture. The Netflix outage was attributed to the Amazon Web Services’ Elastic Compute Cloud, which has a history of taking down Internet service when its servers give out.
With millions of iPhones, iPads, Kindle Fires and Galaxy S III handsets given as gifts, more iOS and Android devices were again activated on Christmas Day in 2012 than any other day of the year. Device activations on Dec. 25 jumped to 17.4 million, a 332% increase over the daily average of 4 million for the first 20 days of December, according to new data from mobile ad and analytics firm Flurry. With more than 260,000 apps using its analytics software, Flurry says it detects over 90% of all new iOS and Android device activations each day. The 17.4 million activations this year far surpassed last year’s Christmas Day record of 6.8 million, which was up 300% from the December baseline in 2011. Another big change for last year was that tablet activations slightly outpaced those for smartphones, 51% to 49%. Last year, smartphone activations outnumbered those for tablets by a 4:1 ratio. “The big winners were Apple iPads, Apple iPad Minis and Amazon Kindle Fire HD 7” tablets,” stated a Flurry blog post today. “In particular, Amazon had a very strong performance in the tablet category, growing by several thousand percent over its baseline of tablet activations over the earlier part of December.” In addition to a wider selection of tablets to choose from, at lower prices, the shift toward tablet activations this year also underscores the higher penetration of smartphones, which have passed the 50% mark in the U.S. New findings from the Pew Research Center today estimate a quarter of Americans 16 and over now own tablets, and a third have a tablet or a dedicated e-reader like a Kindle or a Nook. Flurry found the number of app downloads on Christmas day more than doubled to 328 million from the December average of 155 million. Flurry expects app downloads will remain high through New Year’s Day, with the week’s total on track to surpass 1.5 billion, and possibly hit 2 billion for the first time ever.
The sudden acquisition of self-knowledge can hit you like a runaway piano. Judging by the online branded video marketing stuffs that moved, amused or otherwise delighted me in 2012, I am apparently a nostalgic sap with blind spots for straight-talkin' PSAs and humor that registers south of NPR's "Jocular! With Ira Glass" on the sophistication-ometer. None of this makes me proud. My parents once hoped I'd work with children. I did the worst-of-the-year thing a few weeks ago. In the interest of balance, then, here's a list of my favorite 2012 clips. They're presented in no particular order and with a gimmicky awards component designed to distract your attention from the repurposing of gently worn content. Best wishes for a happy and healthy 2013, y'all. Campaign I Loved Even Though The Product Being Campaigned For Makes My Rashes Break Out In Hives: "Anarchy: The Graphic Novel". The napalm-and-burnt-feathers pong of Axe body sprays may set my nasal passages aflame and line my lungs with chemical residue, but no marketer better understands its target audience. Childish innuendo doesn't come any more merrily, unapologetically over-the-top. Best Turbo-Branding Of A Previously Unknown Organization: Kony 2012. Pre-Kony vid, I assumed Invisible Children was the name of a band from Brooklyn. Post-Kony vid, I tagged the group as the rare nonprofit able to keep its head above water in the social-media whirlpool. I may not have agreed with the clip's WE ARE HISTORY MAKERS MAKING HISTORY conceit, but I admired the commitment and depth of passion. Which reminds me: Is Kony still at large? Follow-up isn't our collective strength; four months from now, a thought about Newtown will flutter at the edge of our subconscious. Internet Clip/Tchotchke I Loved That I Would've Loved Even More If It Had More Than A Peripheral Connection To The Brand Being Plugged: "First Car Story". I liked sharing my first-car story ("The Be-Pooped Love Camry") and thoroughly enjoyed seeing it auto-animated by the nice man/lady inside the Internet. I only wish I could remember which automaker was behind the program. Nissan, maybe? Most Warm-And-Fuzzy-Feeling-Generating Use Of Non-Animatronic Moppets: "Saving For Skydiving". Fidelity's message ("if you save or invest money, you will be able to use it to purchase desired goods or services at an indeterminate date in the future") was worthy. The delivery of that message - by schoolkids, acting out a nonagenarian's financial life story - was uncommonly warm, funny and wise, especially given its big-financial-firm backing. PSA Delivered So Calmly And Straightforwardly That It Didn't Make Me Flinch At The Thought Of Grandpa's Engorged Doodle: "Safe Sex For Seniors". A few more frank, celebratory clips like this, and we'll be able to discuss matters of intimacy without first checking to see if there are prudes or Republicans in the immediate vicinity. Most Non-Cloyingly, Ass-Kickingly Inspirational Call To Arms: "Meet the Superhumans". After watching this gritty, unsentimental tribute to the athletes competing in the Paralympic Games, I felt like head-butting a tree - in an energetic, let's-do-this! kind of way, not in a my-skull-will-finish-what-the-Nor'easter-couldn't one. Best Olympic Tie-In/Espousal Of The Virtues Of Hard Work And Sacrifice/Inducement To Call Mom And Tell Her You Love Her Right Friggin' Now: "Best Job/P&G London 2012 Olympic Games Film". Somewhere in marketing land, somebody approached somebody else and said, "We need something that serves the dual purpose of hyping our Olympic sponsorships and acknowledging Mother's Day." And that second somebody didn't attempt to hang himself with his own shoelaces, as I might have in the same situation, and instead blended the two disparate missions with appealing understatement. Them's good marketing multitasking. Charitable Appeal That Reduced Me To A Puddle In Full View Of My Infant Son, Who Was All Like "Dude, Pull It Together": "Emily's Story". Children in peril + twinkly animation + music-box melodies = LD on his knees. Heartbreak/hope cocktails are a crusher. Least Preachy Don't-Be-A-Dumbass Financial Adviceification: "Don't Major In Debt". Are YouTube videos tattoo-able? If so, graft this one onto the forehead of every 16-year-old you know. They'll thank you down the road. Fondest Reminder Of Post-Indulgence Late-Night College Brainstorming Sessions: "Hot Pockets Limited Edition Infomercial". In 2012, Beavis and Butt-Head were on my TV set and "Hot Pockets Limited Edition Infomercial" was on my computer. You can go home again; don't let anyone tell you otherwise.
When you tune in to the ad-supported version of Spotify, the advertising seems more integrated into your experience than most digital ads. I was recently listening to music when a Gillette advertisement featuring André 3000 invited me to listen to “André 3000’s Style Soundtrack,” which includes his commentary about “songs that talk about style,” in hopes of inspiring you to dance, dress, and (the catch) shave stylishly. What’s clever is that the ads are specific to the publisher and extremely contextual, but they didn’t require Gillette to produce much. The payoff? Gillette was able to reach a listener who was already engaged by tying brand and content together. This smart technique isn’t often used for digital video. Advertisers are either repurposing television ads or producing full-length content. Branded entertainment involves significant costs for advertisers who must pay vendors to produce content from scratch. They then need to spend more money to find a targeted audience and hope the ad will be the next K-Swiss Kenny Powers MFCEO viral video. Although brands should want to scale, they should also make sure they get their ROI. It was not long ago when Ben Silverman left NBC Universal, started Electus, and through a partnership with DumbDumb, created the Orbitz “Dirty Shorts.” The last I checked, both videos had fewer than 400,000 YouTube streams since their upload 30+ months ago. It’s possible for brands to be successful in video production, but we don’t need bad attempts by those that become producers too soon. Integrated advertising offers the opportunity to engage audiences through digital video at scale. It has already been a large enough feat to have audiences move from televisions to computers and devices; even simple video advertising is young. Integrated advertising is far more meaningful in this period where consumers' behaviors are transitioning because it allows advertisers to reach audiences without needing to sell new content. The advertisers and agencies that do take on content production should treat their content exactly as they want it received -- as actual content, not advertising. There are less costly opportunities for innovation through integrated advertising that may prove more memorable than branded ads. For example, instead of producing an online mini-series to market burgers to young men, Carl’s Jr. could sponsor videos they’re already watching, such as snowboarding videos. Videos could include “this playlist is brought to you by Carl’s Jr.” on a page-takeover overlaid with Carl’s Jr. branding and ads. Carl’s Jr. could create more of a branded experience by funding content with snowboarders displaying the logo on their snowboards. Some brands are finding success using similar strategies. Integrated ads could even involve using mid-rolls with the same context as the video. When you watch advertising during the People’s Choice Awards, produced by P&G Productions (yes, the brand), you will see ads that include the singers and hosts. This builds a story that ties the brand to content audiences are already enjoying. The level of effort and sponsorship cost is much less significant than creating content with sets, actors, cameras, post-production, and everything content producers are experts in. It’s possible the tendency for brands to move too quickly to content production stems from when soap operas were produced by soap companies. But their success was partially due there being only three channels to broadcast to and reach 100% of Americans. Advertisers today must follow online audiences who are watching across millions of connected devices, reducing the chances of original content resonating on a large scale. With integrated advertising, advertisers can focus on familiar formats. Branded entertainment should still be taken on, but the advancement to it should be a natural progression.
Twas the night after Christmas, when all through the house Lots of gadgets were whirring, but none had a mouse.People meters were strung to their TVs with care, In the hopes that some ratings soon would be there. Sorry, I couldn’t resist. That holiday metaphor may be overwrought, but it’s also incredibly apt, because the days after Christmas have always proved challenging for television audience measurement, because of the impact all those new gizmo and gadgetry gifts have on the way households watch television -- and even how they connect, or increasingly, bypass it. It was a challenge in the old days when Nielsen field technicians merely had to deal with new TV sets, VCRs, DVRs, and DVD players being installed, but over time, as new “connected” -- and arguably disconnected -- TV devices have emerged, the challenge has gone from the field workers to the head office, which has to decide what even constitutes TV viewing, and which devices and modes of accessing television and other video content fall under its definition. Those decisions will be made soon, most likely well in advance of the start of next fall’s new TV season. And to their credit, Nielsen executives have been extremely open in discussing the possible changes in the way it defines television viewing, and the TV universe estimates that go along with it, but I don’t think anyone is really prepared for what will happen when it is actually implemented, and the denominator for television currency shifts from television sets to, well, anything that can display a “television” signal. The transition won’t be easy, but it is inevitable. And it’s inevitable that it will happen this year, because we all know that “television” no longer is just television sets, and all Nielsen has been doing for the past many years that people have been unwrapping Xboxes, Rokus, iPads, and the ilk, has been to sweep their viewing behavior under the tatters of wrapping paper piled in the corner. It’s not the first time television has had to redefine itself, but unlike past redefinitions that were spurred mainly by one dominant technology -- cable TV, VCRs, DVRs -- the ones doing the defining now are so varied that it may not be possible to neatly retrofit the way people experience television across them. Ultimately, Nielsen and its clients will agree to some solution, and that will become the new standard bearer for “television” that is the basis for TV ratings, and advertising buys. But the reality is that people will continue to expand the ways they connect with video content, and it will be up to the advertising industry to figure out whether those consumer video viewing experiences fit into its definitions -- and budgets -- for television. And until that happens, let me wish a happy Christmas to all, and to all, a good fight.