Archive for November, 2009

eyeballs

Happy Thanksgiving to all of my US readers.

Look into the eyeball my friend
Precious man can’t you understand
Look into the eyeball
Tell me what can you see
What can’t you see
You keep it going on
You keep it going on

It’s all about eyeballs. But not in the way we think.

We have become accustomed to thinking in advertising that more eyeballs equates to more money. That for any given CPM, more ‘M’ = more $. That was, and is true for broadcasting. One could extrapolate the same thinking to the evolving unicast world, and that would be a reasonable assumption except that it doesn’t work that way.

But there is one other really big thing. Distribution costs.

  • RF transmission –  Once you have the transmitter, licenses, business infrastructure in place, the cost of distribution is essentially fixed.
  • Print – Production costs are fixed, as may well be distribution costs for certain types, but essentially, more subscribers = more paper & ink and more delivery/postage. Therefore the cost of distribution is baseline plus cost per subscriber per content delivery instance.
  • Cable & Satellite – Fixed base cost (satellite & cables), but then a smaller cost per subscriber to get the Set Top Box and connection established. Not a recurring charge.
  • Web Pages – Fixed cost per quantum of users for servers and infrastructure, after that the bandwidth paid by the subscriber.
  • Web/Mobile Video – As per web pages, except when they all have the audacity to get ‘what they want, when they want it, where they want it’ and then you have to unicast-stream the bandwidth intense content. At that point, your cost per subscriber goes way up.

So. Is having lots of eyeballs really more important than having the right eyeballs? Depends upon who you are. As a broadcaster, it just gets cheaper and generally the advertising becomes proportionately more lucrative. If you cannot attract the right ‘CPMs’ (and who does?*) you lose huge economies of scale in a unicast world, and the costs of providing the service far outweighs the advertising revenue that those eyeballs generate. What’s more, not all traffic is equal. For example, surfers who arrive via search are predominantly “one-and-done” visitors, not necessarily the reliable well defined demographic that most content owners seek.

Perhaps Murdoch is right in moving away from Google and leveraging Bing instead. This is akin to moving out of the expensive shopping mall rental when you have a known brand… the theory being that shoppers will follow, they are qualified buyers and you get to keep more of your own money.

“What’s the point of having someone come [to us] occasionally who likes a headline they see in Google?” Mr. Murdoch asked in his recent Sky News interview. “Sure we go out and say ‘We’ve got so many millions of visitors, you had better advertise’ and so on. The fact is, there’s not enough advertising in the world to go around to make all the websites profitable.”

Unique IP distribution is expensive.

Be careful of eyeballs. Yes you need them to validate viability, but too many eyes watching your every move may be bad for business.

Tell me it isn’t so… I’m listening.

*Ad networks incrementally deliver pennies for every thousand more visitors that publishers attract. Most ad networks deliver between 16 cents and $1 for a thousand and have large unsold inventories.

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November 26, 2009 at 1:00 am Leave a comment

simplify and go back to paper

I won’t tell your secrets
Your secrets are safe with me
I will keep your secrets
Just think of me as the pages in your diary

Everyone has a Luddite moment. Be honest with yourself, even you.

How many business plans have been sketched out on a napkin? Have not some of the most powerful and personal presentations you’ve ever witnessed been done on a whiteboard?

Why is that?

With all of the rumors about a new mac iTablet, the releases of Kindles, new Nooks etc. one would naturally expect that we’ll all soon be sporting communications tablets that have all of our media, our documents, our communications in one simple form factor. As long as we keep them charged up, we’ll have access to our data. As long as we back them up, and keep those backups up-to-date, we’ll have access to that ever-growing personally duplicated library of stuff forever.

Yet somehow paper and pens do not seem to go away.

Surely everyone has an electronic diary? …and surely all our diaries talk to each other and help schedules our daily lives in perfect digital harmony and sync with our other devices and personal variables and variabilities?

PIC-0012How many of you still jot stuff down on good old-fashioned, environmentally unfriendly paper pulp? You know, the kind that uses less power and employs the most humanly evolved stream of consciousness indexing system? The kind that if stored reasonably well, will last hundreds of years without power, and will retain that memory as it was produced and laid-out by the original author cum publisher?

How many hard drives, flash drives, CDs and DVDs will last that long? How many software packages will last that long? And more importantly, how many will be compatible with future technologies? To be a little more specific, how many of you can still read your original WordStar documents? Or those original MSMail messages? Or…? My guess is that most has been tossed away (or lost) years ago. At some point we inevitably, intentionally or accidentally, de-clutter our lives. Much like an evolutionary process for information brought about by external environmental factors.

The digital archiving dilemma ensures that we’ll be forced to keep converting our ever-increasing digital content to constantly changing new technologies. Each iteration of such new technology will consume new resources and energy to be manufactured, but to also to convert bits to new formats, only to repeat the cycle again and again. Brings a whole new meaning to recycling doesn’t it? Meanwhile, paper and film still stay the same, in the same underground limestone vaults, stored without laying claim to increased resource utilization.

Are old analog formats less convenient? Usually, they take more time to handle and search. Are they less accessible? Generally. Are they more personal or authentic? Always. Are they more secure? Generally so, because it takes more work to copy millions until they’re digitized.

And the quality, generational loss etc… perhaps it’s not worth saving giving the resources it will waste over its lifetime?

I think I’ll start investigating the comparison of archival costs for documents on paper vs. electronic for say the next 250 years. No, I do not hope to live that long…! My guess is that paper (and its analog cohorts) will still win.

Oh, and by the way, I don’t need a touch tablet to draw and write freehand. Paper works for that too.

Tell me it isn’t so… I’m listening!

November 19, 2009 at 1:00 am Leave a comment

who killed the radio star?

So, Radio, Radio
Tell me what i wanna know, wanna know
I’ve been wide awake, staying up all night
Waiting for a song that will make me feel alright.

According to a Nielsen analysis of a media study conducted by the Council for Research Excellence, 77% of adults are reached by broadcast radio on a daily basis, second only to television at 95%. The study found that Web/Internet (excluding email) reached 64%, newspaper 35%, and magazines 27%.

And, in a deeper analysis of audio media titled “How U.S. Adults Use Radio and Other Forms of Audio,” Nielsen found that:

  • 90% of consumers listen to some form of audio media per day
  • The 77% who listen to broadcast radio surpass the 37% who listen to CDs and tapes and the 12% who listen to portable audio devices.
  • Almost 80% of those aged 18 to 34 listening to broadcast radio in an average day.

In an earlier post, technology creates media businesses, I made the point that new technologies create new businesses. And they do. It does not mean that they always create them at the expense of other businesses. Although they eventually do. What it does mean, is that the money within an industry gets redistributed. And that is the current problem with media.

The iPod has not seemingly killed radio, but it has impact even in this demographic. As I have intimated in generational differences and graphed in technology creates media businesses there are probably more significant changes yet to occur. These differences cannot be measured (or readily considered) by surveys, such as those that introduced this blog.

We are seeing less money per listener in radio. Just as we are seeing less money per subscriber in newspapers. These were early forms of mass media. Is this because the nature of society is changing? That the mediums are becoming more efficient? That new forms of media are competing for the same dollar? Or, all of the above?

I say it is all of the above. Media is evolving. The problem is that we don’t know the end-state. If we did, we’d know what business model to develop. Until we do, enjoy the book and stop trying to flip to the last page. There is no last page. Never has been in media, and likely never will be.

Tell me it isn’t so… I’m listening.

November 12, 2009 at 1:00 am Leave a comment

a shot in the arm?

I can still remember
It wasn’t long ago.
Things you used to tell me,
You said I had to know.

On October 28th, 2009 the Wall Street Journal featured an article in the business section titled FCC Considers Shifting Some TV Airwaves to Broadband. In it, the author Amy Schatz, reported that “Federal regulators are considering taking back some airwaves from television broadcasters and auctioning them off to wireless companies to increase the availability of wireless broadband services.”

The proposal suggests that some of the bandwidth allocated to broadcasters may be rescinded in order to sustain the presumably rapid growth of mobile bandwidth demands.

Where does that leave the interested parties?

As a broadcaster, how would I justify the very recent investment of capital into infrastructure to deliver DTV (both HD and SD). It has cost money in an environment where the value of broadcast advertising is being seriously questioned. As a cable or satellite service provider it may mean more customers, but who’s going to pay for local content acquisition and long haul/uplink?

As a consumer, I have in some cases reluctantly acquired a new expensive TV or have been provided with a subsidized converter box in order to receive the free to air signals mandated and administered by the authorities.

So, where would the audience go? Would it migrate to broadband and pay for what used to be free-to-air? In a paid broadband environment, what would be the role of government authorities like the FCC? Would different standards apply to what used to be free-to-air and paid channels? Who would subsidize the connection costs? What does it do to the concept of the public commons?

Clearly, this would add even more confusion to the already vague business models. Many, many more questions come to mind.

Whatever happens, you can be sure that regardless of the transport layer, digital content will be delivered via IP. Even content that would be sent over the reclaimed spectrum will eventually be delivered via IP (think 4G). Seems like regardless of the decision, IP delivery of content marches inexorably onwards… A shot in the arm for IPTV?

Tell me it isn’t so… I’m listening.

November 5, 2009 at 1:00 am Leave a comment


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