Author Archive

Netflix Financing Shows

The New York Post is reporting that Netflix plans to finance more original content. The leader in online streaming video hopes to become a “fifth network.”

I think this is interesting, but what does it mean for news? Network news broadcasts are traditionally done live. They also spend a great deal of time and effort to get “live” shots from the field. If Netflix becomes the network it hopes too, it would almost have to offer some sort of news show. But would people be interested in watching news through a stream?

I believe the answer is yes. I also believe that since Netflix would not be beholden to “live” reporting, it would give them a distinct advantage over all the other networks. The money that traditional news organizations now spend on microwave trucks and camera crews could be invested instead into reporters. A Netflix News show could probably even afford foreign bureaus if it had enough funding.

One-man-band style reporting would be perfect for streaming news. Reporters could literally be anywhere on earth, rather cheaply. They could capture stunning visuals and really tell a story.

I believe Netflix “all you can eat” style subscription plan is a perfect model for success. If the company moves into new programming, including news, they could become a game-changer.

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Popular Science, Unpopular Math

In an interview with Ad Age this week, publisher Gregg Hano sounds optimistic about Popular Science’s iPad subscription service. Hano seems content with sales throughout the interview.

But should he be?

According to Hano, Popular Science currently has 16,000 subscribers. At the current subscription rate of $15 a year, that means Popular Science is only pulling in $240,000 per year in iPad subscriptions.

This number is extremely low for a magazine that tends to cover very high-tech subjects. Their writers and photographers often need to travel around the world to cover the stories Popular Science is known for. So how can a magazine survive with such a small subscription base?

Well, there is some good news. Hano has estimated based on email data that 95% of Popular Science’s iPad subscribers are new customers. This revelation is indicative of Popular Science actually growing its subscriber base online, as opposed to merely migrating it from print.

I think there are two factors at work here. The $15 a year subscription fee is relatively low. The savings versus the newstand price really stand out when customers are only paying roughly 20% of the newsstand price.

Secondly, I think Popular Science is a magazine that speaks to the type of person that owns an iPad. They’re techy, they’re smart, and they’re educated. They don’t mind paying a small fee for a publication that they enjoy. It’s a solid niche market, and Popular Science has been able to exploit it online.

The question that remains is whether or not Popular Science can raise its subscription base on the iPad to a high enough level to truly sustain their business. $240,000 a year is not going to go very far in supporting a large monthly publication.

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Google Thinking About Tablet Ads, We Should All Pay Attention

Google’s Senior Vice President for Social, Vic Gundotra says the company is looking into how to monetize advertising space on tablets in a recent interview with CNBC. 

When Google talks, we should all listen. The company has a history of monetizing internet products without the use of paywalls, subscription services, or outside funding. They’re one of the few companies that have been able to figure out a reasonable formula for ad dollars on the internet.

Journalists should care because if Google starts to come up with new and inventive ways to make ads work on tablets, it may provide a true answer to the financial woes of news outlets. Imagine a tablet application that allows readers of The New York Times, The Washington Post, Rolling Stone and Variety to view articles from all of these publications. The ads they see would be tailored to the readers, providing focused, targeted advertising that marketers would pay a premium for.

The other part of this equation is the layout. Google is not known for having a particularly sexy layout design, unlike rival Apple. The real trick in all this will be to see if Google can present ads in a manner so that they become an integeral part of the tablet experience.

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Record Executives Should Invest in Business School

Bloomberg is reporting that Warner Music Group CEO Edgar Bronfman told a federal jury that Limewire’s effect on their business was “devastating.”

While it’s true that file sharing sites such as Limewire and its predecessors have obliterated record sales, entertainment executives refuse to acknowledge the fact that the economy has changed. In traditional economic models, there are a few inputs into production: labor, capital, and technology. The output of these processes comes in the form of products and profits. The record industry traditionally controlled the only technology available to distribute music: records, tapes and CDs.

But when that all changed, it flipped the model on its head.  Now, everyone has the ability to transfer music that has been simplified into a series of compressed bytes. With the democratization of this process not only should more music be released, but we should be seeing a true renaissance in music with incredible artists being heard that might not have otherwise made it to the forefront.

Record companies should have pulled back from distribution and invested their money into artist development. They should have stopped trying to sell albums and instead given them away. They could have focused on making money through licensing music to films, television, jukeboxes, and cabs. People will still pay for the convenience of music, but not for music itself.

But that’s not what they did. Instead we’ve watched a decade of federal lawsuits. We’ve seen grandmothers brought before judges because their grandchildren downloaded a few songs off Grokster. The music industry has successfully taken one of the greatest technological opportunities for their business and turned it into an insurmountable challenge.

The only way to compete with free is to make it more convenient to pay for it. Until record executives realize this, they will continue to lose money, jobs and quality of product.

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Putting a Price on Twitter


According to a recent report by CNNMoney, Twitter’s biggest investor thinks the company is overvalued. According to this post, he’s right.

Twitter was valued at around $7 billion by private investors in backroom trading, without access to any of Twitter’s financials. Since Twitter is still a private company, they are not required to publish their financial information publically.

The question at the heart of this matter is quite simple: how will Twitter ever turn a profit? It’s a truly brilliant product that has revolutionized communication in a lot of ways. However, the very nature of a tweet is that it is short and sweet. There’s really no room for an advertisement in a Tweet. So how will Twitter profit?

Sure they could sell their user data to marketers. They can try to put ads on their website. But for a company with 200 million users (which may be overstated) it’s hard to see how they can create a sustainable business model by posting 160-character messages.

Twitter is a fun, free tool. But I have a hard time thinking anyone would pay for their services. The smarter business model would have been to allow individual users to have free accounts, but charge business users who use the service for PR and advertising.

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Comedy Central Pushing for More Webseries

Adweek reports that Comedy Central is unveiling two new web-shows as its parent MTV Entertainment Group attempts to develop more content for online.  The move has also led to a shakeup at MTVN Entertainment Group in the Web production staff. The move was made in an attempt to create a division within the company that will be producing content specifically for online.

The two shows currently in development art the Axe Dirtcatholon, sponsored by the aforementioned Axe Shower Gel, and The Download, an interview/talk show.

The difficulty I see for Comedy Central, and any other large media corporation moving into web-production is an issue of competition. The shows that these networks produce for cable are generally of a much higher quality than the ones they release for online. But in the competition on cable and broadcast is generally much less than the competition online.

In a linear programming environment, you’re only competing with the other several hundred shows airing at any given moment. Online, the non-linear nature of programming puts you in direct competition with millions of other shows and videos. On top of that, the ad dollars are worth much less.

By entering an already crowded marketplace with a substandard product, I’m not quite sure what MTV Networks hopes to accomplish. If web-shows are to survive, we need the most creative people out there working on them. They need to have the full might of the production funding of major studios.

Then they might have a chance in competing for my attention against a video of a kitten sneezing.

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What’s Trending?

Lost Remote says that is debuting a new webcast called “What’s Trending.” The show aims to air a live weekly webcast that aims to provide more context to topics trending on Facebook, Twitter and Youtube.

I think the show is an interesting concept overall in its desire to pull the so-called “Facebook generation” into a show. Where I’m worried this show may fall flat is the length of its episodes. If “What’s Trending” is planning on doing a show that is longer than 3-5 minutes, I can tell you very quickly what won’t be trending.

The difficulty with engaging people online is the massive competition for users attention spans. The show is seeking to go more in-depth into topics that are popular online. But the nature of what’s popular online usually is directly proportional to its accessibility, which unfortunately, includes the length of the media itself. It’s going to be difficult for the show to accomplish its mission and maintain viewership at the same time.

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