Category: Distribution

Digital Distribution issues

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Business & Marketing Distribution Media Consumption

Why do we want advertising again?

Somewhere in my feeds today I found a link to a blog I’d never heard of: A Working Library. An article called On Advertising caught my attention, probably because it expressed my thinking better than I’ve been able to articulate: 

“There is no end to this, in that short of eviscerating the content all together (and removing any impetus the reader might have to visit in the first place), our attention to the advertisements is always waning. Sadly, our attention elsewhere also suffers and declines; instead of staying still to read, we skitter from place to place, like frightened prey assured the predators are near.

So, let’s stop pretending, shall we? Any economy which charges ever less for ever more intrusive ads will eventually be successful not in creating wealth but in driving the readers away, until the only ones left to heed the ads are all the other ads, the cell phones searching in vain for a target market among the cellulite.”

Are we really sure this is the way to fund new media? The only way according to ‘common wisdom’. If it is, combined with the precipitous drop in advertising expenditure in recent months and a dismal outlook in the future, then new media is doomed. 

Fortunately I don’t think traditional advertising has much role in new media or new television. Integrated, relevant product endorsement or placement; pay for download or view or subscriptions are much more likely in a world where producers and audiences are disintermediated.

It’s very important to keep in mind that the single most successful model for online distribution has been Apple’s pay-for-download iTunes Store (and lately rentals) by a several billion dollar margin over advertising support for new media projects. As I’ve said before, the advertising supported viewing of Dr Horrible’s Singalong Blog returned negligible income but served to promote the iTunes download or DVD.

Perhaps I have a higher-than-usual aversion to advertising, but I do think we need new models. I have no confidence that the mass-market advertising model we inherited from the “Mad Men” of Madison Avenue has any relevance in a fragmented audience. 

Research shows that “relevant” advertising is more acceptable than any other form (to which I have to say “well d’oh”) and truthfully I appreciate seeing information-rich advertising when I’m looking for a product. Other than Googles Adwords text ads, I don’t see any attempt to target advertising. Even so I rarely follow those links because the informational links are where I go.

That’s why integrating products or services into the programming, or building branded webisodes around the main project seems to me to be far more viable than running a traditional 10, 15 or 30 second ad before or after the main content. The consumption model is different so there’s no reason to believe that old models will carry forward.

But personally, I’d still rather pay a producer a fair price for the content and skip the advertising completely.

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Distribution Media Consumption

How much will you pay to watch ads?

Of course, if I ask the question like that “How much will you pay to watch ads?” most people would immediately respond with “nothing” or something close to it. However most people already pay to watch ads on cable television. You pay the cable company a fee but the majority of channels you can get without paying another, additional fee, all have advertising.

In some of my presentations on the subject of the future of Television, I like to point out that the advent of cable is when Americans started paying twice for Television: once with your attention to the advertising (which was supposed to be enough) and again with cash to your cable company for the privilege of a clean signal and no outdoor antenna.

At least with the cable company you know what you’re going to be charged ahead of the game and you’re not charged specifically for each commercial you watch. You will if those same companies move to capped or tiered bandwidth on your Internet connection. With caps along the lines so far proposed by Time Warner (50 GB a month) a couple of movies downloaded every week (or the equivalent TV watched on Hulu, or YouTube et al.) will soon put you up to that limit. Then, every single advertisement you’re forced to watch will be adding to your bandwidth bill directly.

Capped bandwidth is not necessary and will cause a crippling effect on the growth of video on the Internet (of all kinds). It’s not for nothing that Australia – with very low bandwidth caps – is a broadband backwater in international terms, even compared with the USA. To meet the demand, the cable companies need to invest in their infrastructure just like any other business. If they don’t, let’s find an alternative because the only thing stopping a truly competitive business is the lack of competition.

In most places there is, at best, a duopoly of Internet suppliers: a cable company and (if you’re close enough) a telecommunication (a.k.a. phone) company. Duopolies get comfortable and start to think they’re running the business for themselves and “customers” are a rather unavoidable nuisance. Throw WiMax, 4G cellular or other technologies into the mix and we’ll have real competition. With real competition, all need for a discussion about “Network Neutrality” will evaporate: none of the competitive organizations can afford to be the only one throttling their network.

Without real competition, start to think about paying for watching ads – not only at SuperBowl time but all year round. Ads you don’t care about for products you’ll never be interested in buying, but that you’ll pay for anyway.

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Business & Marketing Distribution

How is new media being funded?

One of the more interesting experiments that came out of frustrated creativity during the Writer’s Strike was Joss Whedon’s Dr Horrible’s Singalong Blog:  A three-part musical with some very well known actors in the lead roles. 

drhorrible

Until an interview with Knowledge @ Wharton we didn’t have a lot of the financial detail, other than it was done with a SAG low budget or experimental contract.

There are a couple of interesting observations in the article. The one that immediately caught my “I don’t believe advertising can support new media” prejudice was this comment about where the money came from:

 iTunes has been a great boon for us. And the DVD has done quite well — although I’d love to bump that up more. Streamed [online video] with advertising is probably the smallest revenue. Whether that’s a viable monetization scheme … is the question. In some ways it acts as an advertisement and in some ways it might be pulling people away from bothering to download it or to buy the DVD.

What’s funny here is that Whedon’s experience was that the “free” (with advertising support) was useful in promoting the paid downloads and DVD – people paying for media!  That’s the complete reverse of the more theoretical positions held by many that the content will be free but some other income stream will “subsidize it” (like advertising has for the last 50-60 years).

It’s also satisfying to know that even when it was being streamed on Hulu with advertising – horribly irrelevant and repetitive advertising – it was the best selling download on iTunes. The pay-for-download version was being purchased through the iTunes store even though there was a free alternative (if you like to see the same ad over and over again). 

The budget was something over $200,000, which is more than had been previously guessed, but total revenue has now been “more than” double that. Even considering that a lot of the income over $200,000 went to actors and department heads who had worked for nothing, that’s still not too bad overall.  It also means the production budget is within the range for similar content – with similar level stars – as a musical would for cable. For ease of the Math, let’s say the total budget was $350,000.

Given that the range for network shows is 25-65c per viewer/per show from advertising revenue and cable rates are lower, let’s be generous and go with the 25c per view figure. At that rate, the show would have had to have enjoyed a cable audience of 1.5 million to have covered its costs. 

If we were to be more realistic about the advertising rate – they were network rates after all – the audience would have needed to be around 2 million (cumulative) to have funded the show. 

Cable can certainly get the numbers: Monk, The Closer and Burn Notice all enjoying audiences of over 5 million on USA and TNT. Shows around the 2 million audience are The Daily Show, Real Housewives of OC, and  Intervention. Very few musicals and not much drama/comedy content!

The one thing we don’t know is what the total audience numbers are across iTunes, Hulu, other online outlets, and the DVD release, but we do know that $6.50 (their share after the reported figure Apple take) for a 45 minute show is better revenue than any other model has provided on a “per minute” basis. Sure, they added additional content so that people who might have already seen the show on Hulu or have it from iTunes still have a reason to buy the DVD. (Directly sold DVDs could bring in a higher per viewer revenue, but not if there’s a distributor or Amazon CreateSpace in the middle.)

Of course, I thought it would have been a show that would have been perfect through Open TV Network. All the benefit of having people delivered each episode as it comes out, with the ability to make a small charge for each download. 15c an episode would have bought in more than a cable showing would and definitely be worth it. Plus when there were DVD Extras they could have been offered to existing fans via their feeds.

Regardless of how, I believe it’s clear that some part of “new media” has to disintermediate the conversation between viewer and producer, without another editor in the middle. And that’s going to require a little direct revenue. We tip for service, why not pay for entertainment?

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Distribution Interesting Technology

How will video be distributed on the Internet?

At his Blog Maverick, Mark Cuban reveals the “Great Internet Lie”, which apparently is that the utopian dream of distributing “Television and Film” over the Internet is doomed. He goes on to “conclusively” prove that it’s not possible to reach Network-sized audiences (even cable network) simultaneously across the Internet.

And he’s right. Certainly I’ve got nothing to refute his numbers. Real time streaming is difficult and expensive. And totally unnecessary. Broadcast Television and its cable/satellite brethren deliver simultaneous viewing to many millions of people at a time, without incremental cost. The bigger the audience, the more profitable the show because there’s not incremental cost and bigger audiences equal more viewers for advertisements.

The trouble is, that’s trying to resolve a new problem with an old solution. (When you only have a hammer, every problem looks like a nail.) The problem that will need to be resolved in the future is “how do we deliver a broad multiplicity of program choices tailored to individual tastes and smaller per-show audience numbers?” 

Programming has to be available when people want to watch it, not at some “appointed” time. It’s been more than five years since I watched real-time television. PVRs and digital downloads replace broadcast schedules. Even for the big-pipe broadcasters appointment television is dying. Broadcast will eventually become the home of sports (real time delivery to big audiences is highly desirable); American Idol and reality TV. These are the only shows that will garner large-enough audiences to meet the mass-audience requirement of a broadcast station or network.

vintcerfSo, how do we deliver that multiplicity of program choices – from traditional and new media suppliers – to meet customer demands? None other than Vint Cerf, one of the “inventors” of the Internet, feels that the future of video on the Internet is downloading instead of streaming real time like a broadcaster.

Already the majority of the video on the Internet is downloaded – progressive download (a.k.a. fast start) drives YouTube, Google Video and pretty much every How to and travel video website on the Internet. It’s only the traditional media folk that think emulating their old business is the way to build a new business, so Hulu and ABC.com stream. (Hint: it’s never been the case and isn’t now.)

Progressive download requires much simpler technological configurations. It’s far less sensitive to the variability of speeds on the public Internet and shared neighborhood nodes, and it meets the needs for the future, instead of the past.

Advocates of real time streaming attempt to draw a distinction between a viewing and “ownership” of a copy. Real time streaming never leaves a copy on the viewer’s hard drive; download does. But realistically a viewing = ownership (potential) has been the de facto reality since the introduction of the Betamax in 1975. Ever since then every broadcast has had the potential for people to keep a personal copy of the show. Digital only accelerates that with built-in PVRs and DVRs in cable and satellite boxes. 

One trend that defines the current state of mass-market television is increased choice and control over viewing schedule, moving the viewer away from the broadcast or cable programmer to effectively programming their own entertainment channel. This is the trend that will increase in the future and that’s why Mark Cuban is completely right and totally missing the point.

Addition: It seems like I’m not the only one questioning Mark’s assumptions. The Forrester Blog for Consumer Product Strategy Professionals posted “Mark Cuban Goes off on the Internet Video Lie” pointing out that Broadcast and Internet delivery were complementary media. They also have links to some of their other writings on the subject.

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Distribution

How to fix independent feature distribution

Kent Nichols If I Were In Charge Of Sundance post started me thinking about independent feature distribution and media distribution in general.

sundanceKent proposes that Sundance run all films on VOD, DVD or on the Internet immediately after the show in order to get maximum exposure at the peak of attention, figuring that few would make money from a distribution deal so the work might as well be seen. (Those deals being done at Sundance are also much lower than in previous years.)

The problem is that the distribution channels for features have been restricted by access gatekeepers. The major studios had this perfectly under control when they owned production and distribution, but that cosy relationship was less profitable after being broken up over antitrust concerns.

What remained are just smaller cartels. Unless a film producer is prepared to hire “dry walls” a theater at their own expense and handle all promotion and ticketing, getting access to “film distribution” is as hard as ever, and the deals are getting worse, not better.

The chance of an independent feature ever getting distribution and making money for the producer and director is almost nil. Enough do to keep the dream alive, but right now, for the majority of films, distribution is broken for the producers and audience. If you can’t find a movie and view it, there’s no profit potential for the producer even if there is supposedly a “distribution deal” in place.

Kent in the article talks of the difficulty of finding a suitable way of viewing a movie that had caught his attention last Sundance, and had done a distribution deal. He ultimately resorted to “other means” to view the movie.

One of the things I learnt at The Conversation conference back in October, is that alternate methods of promoting a movie – with online and DVD distribution can work very well. There is a group of documentary producers who do not even seek “traditional” distribution deals because they know how to create demand for local screenings, driving DVD sales and helping causes related to their documentary.

insideiraqOther independent features create interest in their project from the time of first conception. They build a base of “true fans” who care about the project and help spread the word.

It’s a brave new world of digital distribution, including DVD which will be viable source of income for independents for a long time. But what is needed is a way of getting all those movies out when they’re hot, and giving people who might be interested in watching them, easier and better ways to find the movies.

Revenue could come from branded sponsorship, but personally I’d prefer a method, like my own Open TV Network, where the producers could receive a reasonable payment from viewers but continue to control their own copyright and distribution across other channels. Remember this is not a blockbuster nor known quantity so I’ll be less likely to take the risk if you want to charge studio-level prices.

All Sundance needs to do is to implement Kent’s suggestion, and tack on the convenience of RSS drive feeds. Sundance could provide curated feeds with common themes or fans could build curated feeds of their own and share them.

Filmmakers make some money; Sundance gets affiliate fees and audiences get to watch more interesting fair than the 200 or so formulaic movies that make it into local cinemas.

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Distribution Video Technology

What’s the difference between a codec and a container or wrapper?

It’s a subject with widespread confusion often leading to only a partial understanding.

There are file containers, sometimes called wrappers, that wrap around a number of video and audio tracks. Each of those tracks will have an appropriate video or audio codec. A codec is a concatenation of “coder – decoder”. Basically it’s like using a secret code or cryptography: as long as the encoder and the decoder understand each other, we get video and audio back out at the other end.

Think of a shipping container. There’s this standard “wrapper” (the container) which tells us nothing. Inside could be a car, computer or a million wrist watches. Like the shipping container, file containers can carry many different types of content – the video and audio tracks. These tracks are encoded with some sort of codec. Most codecs compress the video to reduce file size and time to download (and to increase field recording times in production), but there are codecs that work with uncompressed video. Every track has to have a codec for video and for audio.

Common containers are QuickTime (which supports over 160 codecs at last count); AVI (which probably supports almost that many) and MPEG-4, which supports only a few codecs, but very versatile ones. Common codecs are “MPEG-4”, “Sorenson”, “H.264”, “Animation”, “Cinepac”, etc. (DivX is it’s own thing, as I’ll explain.)

Most QuickTime codecs are for production purposes. The older QT codecs that were used for .mov on the web have been “deprecated” by Apple. They no longer show up as export options in the default install of QuickTime. Nor should they. They’re way too inefficient by modern standards. The last new QT distribution codec was Sorenson Video 3 in July 2001. In codec terms that’s just a little after the Jurassic era.

AVI has been a workhorse. I refer to it as the Zombie format because Microsoft officially killed it in 1996 (when the last development was done). It is still in use in production on PCs and very popular for distribution on the Internet, with more modern codecs. Most AVI production codecs are specific to their hardware parent. A modern .avi file is likely to be a “DivX” file.

DivX is actually a hybrid of an AVI wrapper with an MPEG-4 Advanced Simple Profile (see later) video codec and an MP3 audio track. This is a bad hybrid of codecs and formats, such that DivX for a while had to have their own player. (MPEG-4 video should go with AAC audio.)

Most often the MPEG-4 codecs are used in the MPEG-4 container. This is a modern, standards-based container not owned by any one company. It is an official International Standards Organization standard. The basic file format was donated by Apple and is heavily based on the QuickTime container, but is NOT the same. You can’t just change the .mov to .mp4 (or reverse) and hope it’ll work. (It will in the QT player but nowhere else.)

The first codec that the Motion Picture Experts Group (a.k.a. MPEG) approved is properly called MPEG-4 Part 2 ‘Simple Profile’ or ‘Advanced Simple Profile’. This was such a great marketing name, that Apple just called it simply “MPEG-4,” thereby creating huge confusion for everyone as the distinction between codec and container was totally blurred! Thanks Apple! Not! Apple only supported Simple Profile; Sorenson and DivX used Advanced Simple Profile and there were components for QuickTime (not made by Apple) that played Advanced Simple Profile MPEG-4 as well as Simple Profile MPEG-4.

DivX uses the Advanced Simple Profile but in an AVI wrapper, as noted above.

Then just a few years ago, the MPEG association approved a new codec, to be used in the same MPEG-4 wrapper, called (in full) MPEG-4 Part 10 the Advanced Video Codec (AVC). The European ITU also supported the same codec independent of MPEG-4 (so it could be used in other wrappers) as H.264. They’re all the MPEG-4 codec that is Part 10, Advanced Video Codec or H.264.

And yes it is possible to put an AVC/H.264 video track in a QT .mov, but that’s a different container and only QT will play it. MPEG-4 is an ISO standard and there are more than 20 player implementations.

It is AVC/H.264 video with AAC audio (the MPEG audio standard) in an MPEG-4 container that is now playable in QuickTime Player, iTunes, on Apple Devices, in 20 standard players and in Flash 9 release 3 or later (9r3 was finalized in Nov 2007 and is now widely installed). Microsoft have also announced support for H.264 MPEG-4 is coming in Silverlight in 2009, and Windows 9 Media Player has support built in for those same files.

3GPP and 3GPP2 cell phone codecs are part of the MPEG-4 family fwiw.

Hope that helps and makes sense.

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Business & Marketing Distribution

Why do we have ad budgets?

Seth Godin has a post Do Ads Work that makes the case that the only reason why there are “ad budgets” is because the advertiser really has no idea whether or not the ads are paying off. They limit the potential down side.

If your ads work, if you can measure them and they return more profit than they cost, why not keep buying them until they stop working?
And if they don’t work, why are you running them?

There are some businesses that do follow that rule. In one of my dad’s businesses they knew that more than 60% of their business (at the time) came from their Yellow Pages ad. But in my production businesses I could never find an advertising outlet that measurably gave results better than the cost. (My own digital video business ad in the same Yellow Pages drew two enquiries in a year and broke even.)

So, we basically have a whole bunch of advertisers who don’t know if the advertising they’re placing is paying off, that’s cluttering up “new media”.

I think Doc Searls is right when he posts:

What we need is for demand to find supply, not just for supply to “drive” demand. We’re not cattle, and we don’t like being herded, even if it’s by friendly chutes like Google’s. This was true before online advertising went nuts, and it will be true after the chutes get trampled.

In that he echoes what I posted from Dave Winer last week.

Advertising is on the decline in relevance and usefulness because we are no longer dependent on advertisers to push information at us all the time, in the hope they hit the few that might want to buy their product right now.

As a result of the Internet, control = power is moving from the advertisers and their network appointment economy, to one where information about desired product, as well as entertainment content, is delivered on demand. On the schedule of the viewer and consumer.

Advertising budgets are necessary because most advertising doesn’t work. It merely devalues the content. Back to Doc Searls for a final comment:

It’s 2008. Isn’t it time we thought past advertising, toward revenue models based on serving customers, rather than guessing at them?

Advertising is not going to power new media. It may not even power old media for very long if we project forward from the way that print media is being displaced by online content.

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Distribution Random Thought

What is the future of advertising?

I hate advertising. I guess, if I’m completely honest, I hate irrelevant advertising like most people. Trouble is, I’ve yet to experience relevant advertising! I also don’t believe that advertising has affected my decision making process at any time. Last time we purchased a car I’d never seen a Kia advertisement: we had rented a Kia and it turned out a friend of a relative worked at a Kia dealership and could get us a decent deal.

I go out of my way to avoid advertising. In our last residence “TV” came off a PVR and ads were universally skipped. These days with TV coming from the Internet there are no ads in the downloads. The few times I’ve watched Hulu, the irrelevance of the ads was distractingly annoying.

The only sane way to surf the Internet is with ad blocking! I was recently categorizing the entries in my research database that involved loading pages directly in DEVONthink Pro, which claims to have ad blocking but nowhere near as good as the plug-in I use for Safari. After an hour or so it felt like my eyes were bleeding from the garish, flashing, irritating ads all over the place. It was a shocking realization of just how unappealing browsing without ad blocking was.

I am surprised, then, that the entire “new media” business seems predicated entirely on advertising support! (How many times do new business have to repeat the mistake of modeling themselves on their immediate predecessor – we know from history that the final model will never look like the preceding one.) This is within the context of at least one survey from Yankelovich Research that show 70% of Americans would pay to view content without advertising and go out of their way to avoid brands that “overly market their products and services”! Who wouldn’t after being barraged by up to 5,000 advertising messages a day!

But if there was no advertising how would we find out about products we wanted to buy – things that would be useful for our business. To which I would answer, the same way I do now: reading and research. Particularly searching on the Internet. Dave Winer nailed it:

The Internet is a wonderful commercial environment. It has trained me to expect the impossible from real-world retail. When I last visited Fry’s I wished I could hide all the items on the shelf that don’t match my search criteria.

Frys is intimidating and it has no search engine (in the store) making the online version much more satisfactory. In that same posting, one of his commentators – Hartsock – puts it this way:

“I look forward to the day when I can search like this: “pants waist:38in inseam:32in cargo” and find a listing of cargo pants that fit me and places I can go and buy them.”

In other words the information is being pulled by the customer when the customer is ready to buy. Not pushed at the customer thousands of times when they’re not ready to buy, which simply annoys and intrudes. As Dave puts it:

However this is not advertising! It is commercial information. The former is in our way, the latter is what we seek.

Advertising was useful in reaching mass markets with relative homogeneity – America in the 50’s when TV was new – but now there are few mass markets, tanking advertising spending and little advertising relevance. Now it’s time to realize that people seek commercial information that’s relevant, on their schedule and pace, not something pushed at them intrusively.

That’s exactly the same changes we’re seeing in media consumption: people want their programs, on their schedule on their device of choice. Advertising made sense for appointment television, but that’s dead!

In terms of our businesses perhaps it’s time to realize that being findable in search engine by having an active web presence is much more valuable than a big advertising budget.

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Distribution

How big an audience is needed?

I was reading this post at Video Insider and something struck me as really, really wrong with the numbers. Not that the math was wrong, just the return from the audience seems incredibly bad.

An audience of 15 million people (impressions) brings in the grand sum of $330,000! The top rates network show last week America’s Got Talent has an audience of under $12 million. Now I don’t know the budget of America’s Got Talent but it’s probably over $330,000.

The top rates hour-long production is apparently CSI Miami. Again I don’t know the income or production numbers, but typically the budget for “high production value drama” is usually $2-4 million an episode.

The difference is, of course, that we’re not looking at a 44 minute “hour long” production on the web. But even so, there’s something to be learnt from the numbers. That short video on the web is getting about $20 for every thousand people who are exposed to the ad. If we work on the long term average for hour long shows – about 65c per viewer – and convert it to CPM equivalent, we get a CPM for Primetime on CBS of about $650!! That’s approximately $5,322,200 in gross revenue (plus reruns, DVD distribution and foreign sales.)

Now Smallville manages to have high production values with a relatively small audience of just 1.736 million. Obviously that’s not costing as much to produce with estimated total revenue (let’s say a $500 CPM) of $868,000. Heck Jim Kramer’s show remains on air (on cable) with an audience of around 160,000. Even if the “CPM” held at $500 (unlikely), the total revenue for that show would be well under $80,000 per show.

On the other hand you have shows like The Guild rely on donations from their audience of around 30,000 to fund their (roughly) $250 an episode hard, physical, must-pay-out costs. (Cast and crew currently come for nothing.) No advertiser has been forthcoming.

Or consider Break a Leg, a high production value comedy produced with full crew in HD. With audiences on YouTube (2 million views as a partner), Blip.tv (500,000 views) and Metacafe (front page and a contest winer but only 100,000) the show grossed $2,500, or a CPM of $0.96 – 96 cents per thousand views.

Advertising works to fund video production on TV – networks and cable – with varying degrees of success, but it does not appear to work for web shows. Even Hulu, considered to be a success these days, is only getting CPM of $25 for the same content they’re getting $400-650 CPM on broadcast. I can understand why their emphasis not on Internet distribution!

Does this mean that the whole “democratization of distribution” is a over? That only big media will do at all well. It does if we are going to continue to put new wine into old wineskins. Advertising was absolutely the way to fund “free to air” television, which most people now pay for additionally with cable or satellite. But it is incredibly unpopular.

According to Yankelovich Research,

“Seven in ten Americans would pay money to block or skip advertising and marketing messages.
Almost six in ten consumers go ‘out of their way’ to avoid brands that overly market their products and services.”

Even if you find an audience…

In an online survey of 2,600 respondents, about 53.6 percent of online video viewers recall seeing in-stream – either pre-, mid-, or post-roll – ads attached to some form of web programming. That’s the good news. Not too surprisingly, more than three-quarters (78.4 percent) of respondents said in-stream ads are intrusive and fully one-half (50.4 percent) say these ads disrupt their use of the internet.

And from that same survey:

When it comes to streaming ads, half (50.7 percent) of the respondents said they stop watching an online video once they see an in-stream advertisement. Two-out-of-five (43.2 percent) do stay on to watch the rest of the online video. While only a small percentage – 15.3 percent – said they immediately leave the site once they encounter an in-stream ad, about half (49.7 percent) said the such ads’ presence alone makes them less likely to view other online videos.

The only good news for advertisers was that the 18-24 year olds surveyed didn’t mind the advertising…

Over one-half (57.6 percent) will watch an an online video ad and not become too annoyed to finish viewing. However, the report says younger viewers also have fairly low recall rates.

I’ve always wanted to either turn my audience away, and annoy them with ineffectual advertising. That sounds like a winner. Not.

If Break a Leg got only a single cent each for those 2.6 million views over nine episodes, they would have banked $26,000. At a more-reasonable 10c, that’s starting to cover expenses with $260,000 (about $29,000 an episode). If the audience were fans maybe more, maybe 25c an episode then the show would likely be profitable with $72,000 an episode. That’s a much bigger audience than Jim Kramer and higher production values!

With all the research at my disposal, I cannot find a single instance of where new media (podcasts, online, etc) is producing a good return for its producers from advertising. Like 70% of Americans I’d prefer to pay to get rid of advertising, assuming the cost to me (and return to the producers) is the same as it is now. We just need to get rid of the middle men – the network programmers – who are only interested in the advertisers, not the show, the producers or the audience.

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Distribution Interesting Technology Video Technology

Little boxes, on the set top, little boxes full of ticky tacky!

So, Netflix and LG announce yet another set top box. Well, actually they announced that LG would include the Netflix service on “selected devices”. Best guesses are that the service will be added to a dual mode (HD DVD and Blu-ray) player, or even the Television itself.

Here’s the problem with this: it’s Netflix on LG devices and only Netflix. No slight on Netflix, the service is good and the company needs to provide for a non-disc future. However, the industry should be gathering together for a single standard for delivering from the Interent to the lounge room, not proprietary deals with single suppliers. If we want movies from Apple then it’s another set top box (Apple TV). Vudu have their own movie service and their own proprietary box. Tivo is a little more open – it has an API for programmers – but it’s still another box on top of the cable or satellite box you’ll probably still have.

We need a single standard or interoperable standards for delivery of “Internet TV” to Televisions. It has to be simple. TV would not have caught on if we’d needed separate Television sets for CBS, NBC and ABC – but that’s exactly where these companies think we’re heading.

It won’t work. Any device(s) that link the Internet sources with a TV are good, but it needs an open standard – perhaps that’s what google are working on, but even then it won’t help integrate with cable or satellite boxes unless those providers have a significant change of heart.

Apple TV, for all the people who claim it to be a “failure” is the leading device to connect computers and televisions. While its sales are disappointing by Apple’s mega-hit standard, it’s estimated to have about 800,000 units sold in 10 months (took Tivo 4 years to get that far) and it’s way ahead of the competitors, other than Xbox or PS3 which both act at media extenders.

My mantra for 2008 – proprietary bad, open standards (even from one company) good.