Choice quotes

Posted on October 16, 2006 
Filed Under Uncategorized

“Content is still king, but the monarchy has been overthrown. YouTube, MySpace, iTunes — it’s the invasion of the pronouns in a world all about me. The consumer-led republic is replacing the monarchy of major media. Consumers are in more control than ever. What’s changing is the very definition of the consumer. Increasingly, consumers might be called small media — just about anyone can now create and deliver content,” Beth Comstock, NBC Universal’s president-digital media and market development.

She said NBC Universal needed to “create the best, most innovative content, get used to sharing control, tap the power of the community, develop a keen understanding of constantly changing consumer behavior and, finally get used to the idea that the media marketplace from now on is going to be full of contradictions and tensions.”

One of those principles is a topic high on every media executives’ agenda these days: consumer behavior. “When I took this job a year ago, I assumed that few people would go home at night, and curl up on the sofa with a portable video device to watch a 22-minute program. But then iTunes video entered the market. And we started doing research. We discovered that 68% of iPod video owners were using the device inside their home, not on the road.”

NBC kept hearing about the guy who took his iPod to bed to watch his show while his wife watched the TV, or about the guy who watched basketball on the couch while his wife watched video clips on her cellphone. [from AdAge.com]

“Industry analysts predict that mobile television could be a global market worth as much as $27 billion by 2010.,” said Anne Sweeney, Co-chair of Disney Media Networks and president of Disney-ABC TV. “We now understand that piracy is a business model. It exists to serve a need in the market — specifically consumers who want TV content on demand. And piracy competes for consumers the same way we do — through quality, price and availability.”

Disney has deals with Vodafone Italy and Orange Mobile in the U.K. and has just finalized a deal via France Telecom’s Orange service. Disney distributes the ABC hit “Lost” to 3.2 million mobile-phone customers in the U.K., and plans to bring the network’s “Desperate Housewives” to 24 million Vodafone Italy subscribers. The company is also creating a new mobile product around a series of video diaries by the characters of “Lost.”

In looking for new-media ventures, Ms. Sweeney said, “We want partners who believe in their own products and services enough to market them aggressively instead of relying on our content to drive their sales.”

Ms. Sweeney also revealed that ABC.com’s latest program-streaming initiative had garnered 2.5 million requests for shows in the past two weeks. That’s compared to 5.7 million requests for episodes over a two-month test period in the spring, when ABC first began to stream its top shows online. The new initiative is supported by a range of advertisers including Toyota. “Grey’s Anatomy,” “Lost” and new shows such as “Six Degrees” and “The Nine” are available online after the shows have completed their traditional broadcasts.

Outside the U.S., Disney also has a similar venture in Germany, where viewers can watch shows online via an IPTV entertainment portal called “Maxdome” operated by broadcaster ProSiebenSat.1 and has licensed studio content to wireless-content firm TU Media, based in South Korea. The South Korean market is one of the most advanced in the world for cellphone technology. TU Media now streams 250 hours of Disney programming to its wireless-phone customers. [from AdAge.com]

On the YouTube buy. “Well, on the money side, it’s easy because we have what we think is the world’s best advertising system and we can take that advertising and use that over time to build quite a business off all of the things the users are doing on YouTube,” said Eric Schmidt, CEO, Google.

“The real reason, however, was not the money, and not even the advertising, it was because we believe that video is going to be, and is sort of already, one of the most important new media types on the internet.

“More and more people are going to be doing videos of one kind or another to communicate ideas, sell their product, record their memories, and ultimately a lot of the existing broadcast world that we’re so used to will become available on the internet.

“All of the media companies are dealing with dramatic changes in their business. So what we’re trying to do with all of these partners is to say, ‘if you work with us we can combine our advertising platform and your content with a much larger audience.’ So far people like that message, they are now trying to figure out what to do about it – should they, should they not, under what terms, and those sort of things.” [From FT.com]

“YouTube is less a video-sharing site than it is a social networking site based around video. The company gets its content for free and has built a profitable business from acting as a video portal. In the strictest sense this isn’t Web 2.0 at all and actually harkens back to Web 1.0 applications like the Motley Fool,” said Robert X Cringely, PBS’s I, Cringely.

“So is YouTube the future of television or isn’t it?

“The answer to this question has to be based more on how WE use the medium rather than on how it uses us. I don’t think YouTube as it exists today is even remotely the future of television, because if it is then television is in huge trouble.

“Where are the folks who watch YouTube six hours per day? They exist, I’m sure, but there was a time when Americans watched television an AVERAGE of six hours per day, which is more than YouTube will ever know. YouTube gets stale for me after about 20 minutes, which hardly makes it the next Seinfeld.

“If YouTube has 100 million video downloads per day and if those downloaded videos average 2.5 minutes in length as PaidContent suggests, then the average daily YouTube audience consumes 250 million minutes or less than ONE MINUTE OF VIDEO PER U.S. RESIDENT PER DAY. That’s a lifestyle change, true, but not a big one, nor is it even guaranteed to be permanent.

“The whole television viewer experience has always been based on two factors: immediacy and production values. TV brought us live events we could share as a nation. YouTube can’t do that. TV brought us production values beyond what we could afford as individuals. YouTube doesn’t do that unless it is by ripping off copyrighted content.

“Its evident profitability is how YouTube is now able to cut revenue-sharing deals with record companies and TV networks. There has to be revenue to share for revenue sharing to work. But if you look closely at those deals, they also involve the prospect of original YouTube-only content from partners like CBS.

“Is CBS going to put $1 million per hour into its YouTube content? I don’t think so. CBS is going to throw on YouTube all its old pilots and episodes it had previously written off — content that costs it absolutely nothing because it was paid for long ago out of a different budget.

“YouTube is the factory outlet of commercial television, at least for now.” [From I, Cringely]

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