Multichannel monetization should beat piracy

Nick Bilton writes, "Internet Pirates Will Always Win" and provokes some interesting ideas: is preventing piracy just a game of whack-a-mole?  Certainly, in the current paradigm, it can seem that way.  

I wrote to colleagues in 2007, when Razorfish was in discusions with NewCo (the nascent NBC/Fox JV that would become Hulu) that fighting the desire of content to be easily available (even if not free) was not a viable business strategy.  

Then, as now, this is a matter of ideology, because the people with the biggest ideas about content are rarely in charge of setting its price or licensing terms.  

But in the multi-channel world, with connected devices now a threatening alternative to STB-connected distribution, content players should not forget the power of an engaged audience.  They are a monetizable asset, and even if watching for a far lower prixce, creating a low-price tier with identifiable audience members can produce email opt-ins, social discussions, merchandise/DVD/other revenue, and tune-in for other programs.  

Mr. Bilton quotes Holmes Wilson, co-director of Fight for the Future, in the article:

The hit HBO show "Game of Thrones" is a quintessential example of this. The show is sometimes downloaded illegally more times each week than it is watched on cable television. But even if HBO put the shows online, the price it could charge would still pale in comparison to the money it makes through cable operators. Mr. Wilson believes that the big media companies don?t really want to solve the piracy problem. "
"If every TV show was offered at a fair price to everyone in the world, there would definitely be much less copyright infringement," he said. "But because of the monopoly power of the cable companies and content creators, they might actually make less money."

Mr. Holmes is not wrong about the exciting power dynamic in play - it certainly could be empowering to do something the "man" doesn't want you to do. Nevertheless, exercising our inner Che Guevara is neither an effective mechanism of revolution against the industry nor a stricly pleasurable experience (corrupt and low quality BitTorrrent downloads mostly waste our time, if not our money).  Wouldn't a low-price on-demand stream or download just be...easier?

It's myopic to think that adding many more low-revenue streams is going to lose money; it certainly will if the HBO/HBO Go are your only revenue source.  The MSOs and the premium TV providers have to work together to create experiences and tiers whose scope is beyond the cable system, and where even if the price is lower, the experience is better than piracy, which is, after all, a pain in the butt.  But I'm just an idealist, I know.

GOOG 3G/4G Spectrum Patents from Nortel Key to World Domination

Over at SAI, the chart of the day suggests that ChromeOS is a jab at Windwows (duh) and that Google needs the OS to succeed because it is the best hope to kill a weaker Microsoft.  Despite Microsoft's attempts to break out of the doldrums, and the extreme diversification of their product offerings (many of which never stood a chance of working)- Windows remains the cash cow for the giant.

If I were Google, I wouldn't try to win the war against Windows under current conditions; I would need more things to fall into place.

Android users are wising up to the Google Platform, and applications for Android are proliferating.  Windows Phone 7, how are you feeling?

Bing is getting better, has differentiated itself and is integrating with Facebook more obviously (the future of social search is very scary for any company that does not follow Bing's lead)- that's got to be scary for Google.

ChromeOS apps would all be web apps, and the value proposition would have to involve the cloud, and applications that are enhanced by always on-data networks.  WiFi in the current sense just will not cut it.  You know what would?  3G/4G wireless connectivity built in.  

ChromeOS laptops might be a miserable failure like the Nexus one, but if Google sold them at a loss, they'd exact a far more painful loss on Microsoft.  With onerous license fees from the essential connectivity, Google has to own the key patents in order to reduce its costs.  This illuminates why Google may be fighting so hard against Apple and RIM for Nortel's 3G/4G patents.

When yo sign into Google Apps, use email, docs, spreadsheets, watch Youtube videos in the Chrome browser, and android apps all day, getting served advertising by Doubleclick until you remotely program your Google TV from your android phone and watch The Office when it's convenient for you...that's when Microsoft dies.  And with the exception of GoogleTV, I haven't named one thing above that sucks.  

To do the same thing on Windows/microsoft/Bing/MSN/Xbox, you're making some compromises along the way, for sure.  It's not a done deal, but it's for all the marbles.

Learning from Give Me What I Want

The last decade has seen information technology  increase productivity and the measurement of marketing, and this has primarily been a gain in efficiency.  I think social technologies trend in the opposite direction by making marketing more powerful, insightful, and satisfying to the target audience.  Having the people's affirmation as a lynchpin of success has done wonders for the quality of many marketing program's.

At a recent NY Tech Meetup, I was introduced to and finally had a chance to try it out.  While the site seems to be hitting its stride in terms of ad monetization, it's possible all this ad-revenue will be clawed back by a copyright infringement lawsuit.  From a usability perspective, the site is great, and THAT is what people want. [side note: consumers (ok, I) will click on nearly anything to get the content we  (ok, I) want].  There is literally no telling what the " Helper Applet" is doing after you're done with it.

Conclusion: The site is one a huge missed opportunity for the major media companies and studios- this is where the people are, and they'll watch or its successors until they figure out how to serve the audience rather than enslave them. 

CBS Scores Again with

This week's episode of How I met Your Mother mentions another online tie-in related to the show: Perennial womanizer and keeper of the Bro-Code Barney Stinson proposes a holiday for single men: Not a Father's Day.  

As soon as I saw the episode I went to the web site, and sure enough, you can buy all the outrageous merchandise showcased in the episode from the store on the site.  Made me smile that the show followed up so well on and The Robin Sparkles video (this is to say nothing of Barney's Blog on which is also fantastic).  These are very smart plays which are written into the universe of the show without being heavy-handed- it doesn't have to be increadibly complex webisodes and adventuires to give fans a little better chance to engage with the  show and its characters.

CMO strategy in a downturn

My newest contribution to the Razorfish Headlight blog is now live.   I tried to look at many of the different elements affecting sales and marketing decisions online and in America; I have a very strong perspective that there MUST be a strategic opportunity somewhere for a company seeking to create value.  

These recommendations could translate to other industries, particularly durable goods which are typically financed.  See CMO strategy in a downturn at  

Also this month are excellent articles on digital advertising by my colleagues Neal Gorevic, who writes about dealers using video advertising, and Blake Kimball, who writes about new media planning tactics.

My summer TV agenda

This is as much for my own benefit as anything else, but here's what's on tap for me this summer: so many good things to watch.  Where is HBO in all this?  No new Entrourage this summer, which breaks my heart, but I'll see September....

Weeds (Showtime, Mondays at 10, already begun) Nancy's new beginning looks to be fantastic, and what a ride.  A consistent favorite, and I'm so glad I have Showtime.
This American Life (Showtime) I pretty much watch this on-Demand only, but it's fantastic.  Just so insightful sometimes it shocks me.
Mad Men (AMC Sundays at 10 beginning July 27): LOVE IT.  I can't say enough good about this series, its dark and light elements especially provide a great look at the beginning of our media-permeated culture.  And, who doesn't envy 3-martini lunches (even in caricature)?
Eureka (SciFi Tuesdays at 9 beginning July 29):  I am getting happy just thinking about this show.
Burn Notice (USA Thursdays at 10):   This show hooked me last summer, for it's great camera work, fun technology, witty dialogue, awesome protagonist, and of course Gabrielle Anwar.  Bruce Campbell is awesome in this as well, and I might be watching even if he was the only good thing about it.  Fortunately this is not the case.
Breaking Bad (AMC) gotta catch up on this in re-runs- I only saw 3 episodes but they were fantastic.
Out Of Sight (USA Sundays at 10): This is a new show I'm auditioning.  It doesn't have me hooked, yet, as I don't really find the recurring plot elements very compelling.  I am thinking that I am just not enjoying the writing enough to watch this non-serialized drama.

Is Lost’s Island Electromagnetic Enough to Move Itself Through Space? Time-Travel Expert Says It’s Not Impossible - Popular Mechanics

In the last episode of LOST, Locke finds out from Dr. Shepherd that the only way to save it is to move the island.  I think they would probably attempt this by altering the electromagnetic field surrounding the island- we've seen how the helicopter faces a reasonably serious challenge just trying to find the island due to some kind of weird spacetime fluctuation.

Could they be thinking about something even more exotic, like actually moving the physical isl;and fgrom pone place to another?  Here's the Popular Mechanics story, Is Lost’s Island Electromagnetic Enough to Move Itself Through Space? Time-Travel Expert Says It’s Not Impossible.

The End of the Diversified Media Company?

How valuable is is to have assets over a variety of businesses?  Do economies of scale and especially scope really exist?  I think it is interesting what is happening this week.

Previously I blogged about IAC breaking up- essentially this is a vote for "yes" and a vote for "no" because the breakup into five separate companies suggests that the value of the parts individually is higher than the value of the whole.  Barry Diller also said that IAC

needed [the transactional businesses like Ticketmaster] earnings to allow us to invest in emerging Internet businesses. Now that we have real scale in the pure Internet units, it makes nothing but sense to me to reorganize the whole.

So essentially, having TV, internet, real estate, and retail assets all together under one roof wasn't maximizing shareholder value after all.

CnbcNbccom What are other firms doing?  Try GE. General Electric's NBC Universal unveiled a sweeping campaign last night during the Sunday Night Football broadcast of the Eagles-Cowboys game aimed at  "entertaining, informing and empowering Americans to lead greener lives."  But was anyone watching?

I would be surprised if this was not one of the top games in ratings this season.  The campaign, NBC Green is Universal, will turn the NBC logo on virtually all of its TV channels (cable and broadcast) Internet properties(excluding MSNBC),  green for one week to coincide with eco-awareness programming.  I don;t know what Matt Lauer was doing near the arctic circle, but apparently the earth is getting warmer :)  It's "Green Week" at Claire's high school on Heroes. 

The models on Deal or No Deal will be  wearing recycled parachutes.  Jay Leno shows you how to clean a green sink in an eco-friendly way.  Even as CNBC was reporting that Citigroup stock was probably headed lower, there was Eco-Awareness brought to you by NBCU. GE announced this on October 23, apparently.

It's going to be hard to avoid all of this, as NBC is everywhere, but I think the only thing this proves is unified campaign launches across platforms can be done well, with the added benefit that we decide to tell all our bosses to buy that $2,000,000 GE HVAC unit for the office park because it's 20% more efficient and uses 16% renewable resources (i made those figures up- all of them).  GE  named Ann Klee Vice President for Environmental Programs today!  All this seems more to be happening for corporate PR value and brand equity than any DR/commerce advertising.

Times are just as challenging for other large media companies.  The AOL/TW merger never produced the kinds of scale and scope ecomies and leverage promised to investors. Viacom spun off CBS radio in an apparent loss of faith  in the radio business's  fit with its other assets. 

Maybe all of these are examples of businesses with strong positions but weak strategic frameworks.  Are software/tech companies like Microsoft and Google doing this better than others?  In some sense, it seems like their model isn;t much different- using a cash cow (Windows OS/office software for Microsoft, search for Google) to lever into other lines of business.  Time will tell.

Flying around my mind this morning...

Can we call it "Don't tase me bro"-gate at CSU Fort Collins? [NYTimes]

"Um, yeah the thing about our news show is, it's like, not news." Thanks, CW 11! The Best TV News, All About Us

14 year old pop/TV star not pregnant. Phew. Viral marketing taking lessons from F/X's Dirt? It’s Pimples, Not Pregnancy, for the Teenage Star Miley Cyrus 

Last but not least, Tell Me you Love Me is entertaining only if you like to heckle.  Are we heckling because the content is so overtly sexual?  Maybe, but with writing this awful and some very weak and annoying characters, I think I'm in good shape.

Summer Media Consumption

I'm really looking forward to the premiere of Burn Notice Thursday night on USA.  The summer is to be free of new episodes of LOST and The Office (which I watch), a million crap shows I don't watch (Idol, Grey's Anatomy, etc) but USA and FX will be working season of Eureka, Damages on FX...oooh it's gonna be great.  Not to mention my HBO fix of Entourage, John From Cincinnati- which is looking continue to be a fantastic show, Flight of the Conchords and Big Love.

Lost Season 3 Finale [spoiler alert]

I thought it was kind of fun for things to be a little happy for a minute.  Hugo saves the day with the van. Actually I can't figure out why there was beer left in it- I though Jin and Sawyer drank it all?

The flash forward was kind of cool too, but a bit like burning a rope at both ends...over the long run, is that their vision?  Connecting the dots for 3 more seasons? My thought at the time was, didn't "The 9" kind of flop? Also, I agree with what some people have said that not everyone gets off the island.  I think that's why Jack wants to go back. There are some screencaps of the clipping that Jack carried around and it looks like a man from NY dies- isn’t Michael from NY?

I think it is worth focusing on the whole idea of the island giving people purpose/ requiring them to act upon it.  It gave Desmond visions, Locke healing, super virility to Jin, etc, and maybe in some strange way the survivors are better off on the island, with all its mystery, than returning to the mainland.

My last thought has to do with Ben being right about Naomi not being who she says she is. She had the pic of penny and Desmond, and we know that penny is looking for Desmond, but what the hell was Naomi really doing? Who was the guy on the other end of the phone?