Category Archives: digital media

Learning From Limewire

Gather round, youngsters.  I’m here to tell you the story of how the record industry got rid of piracy.  You see, many years ago, back when the interwebs was just a tiny series of tubes with barely anyone on it, there was this company called Limewire.  It began around the turn of the new century in 2000.  It was one of a number of peer-to-peer services that some bad people were using to share the music that they had bought thinking

English: Logo of Adblock plus Deutsch: Logo vo...

(Photo credit: Wikipedia)

that they owned it.  The folks that sold the music – the recording industry – sued Limewire and a bunch of the other companies too.  This, they said, would assure that piracy would end and the music business would remain healthy.  I’ll let you kids figure out if that’s really the case (hint – not so much).

Suing a company out of existence (and Limewire isn’t exactly out of existence, just sort of in limbo) rarely kills off the idea behind it.  For example, Aereo may be dead but the demand to stream local TV isn’t gone (neither is the piracy of signals).  So I read today’s story on something going on in France with a bemused smile:

On grounds that it represents a major economic threat to their business, two groups of French publishers are considering a lawsuit against AdBlockPlus creator Eyeo GmbH. (Les Echos, broke the news in this story, in French).

Plaintiffs are said to be the GESTE and the French Internet Advertising Bureau. The first is known for its aggressive stance against Google via its contribution to the Open Internet Project. (To be clear, GESTE said they were at a “legal consulting stage”, no formal complaint has been filed yet.) By his actions, the second plaintiff, the French branch of the Internet Advertising Bureau is in fact acknowledging its failure to tame the excesses of the digital advertising market.

That sums it up nicely.  The problem isn’t that people want to block ads.  The problem is that publishers have destroyed the viewing/reading experience.  There are plenty of studies that testify to consumers’ willingness to participate in the attention/value exchange.  You give me valuable content, I will give you my (and your ads) my attention. People didn’t seem to mind banner ads, even if they were for products that didn’t fit the site.  They were easily ignored.  Then came pop-up ads, leading to the use of pop-up blockers. Then advertisers/publishers started using Flash to make animated ads with sound, leading to the use of Flash blockers. Then they started using Javascript to hijack pages and force people to view ads, leading to the use of Javascript blockers.  It just keeps escalating, and finally, maybe, even into court.

The AdBlock product isn’t completely clean either.  One can question their motives when they say “We are being paid by some larger properties that serve non-intrusive advertisements that want to participate in the Acceptable Ads initiative.”  Limewire bundled spyware.  That doesn’t change the reality in either case.  The problems these products are solving were created by choosing your own business interests over those of your consumers.  You can’t solve that problem in court.  You agree?

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Filed under Consulting, digital media, Huh?

Is TV Terminal?

I spent 23 years of my professional life working for TV companies.  I miss them sometimes.  Then again, when I come across some of the information I’ve been seeing over the last couple of days, I wonder if there will be anything left to miss in a few years.  The business model I learned and practiced in my youth is rapidly becoming unworkable and the media landscape that’s emerging calls into question the viability of the entire system.  Let me explain.

Let’s begin with the basic premise.  The TV business is about aggregating eyeballs to sell to advertisers.  Yes I realize that extracting (some might say extorting) payments from cable operators has become almost as important a part of the business as the old ad model, but once the audiences disappear those payments might be jeopardized.  After all, if you pull your signal from a distributor and no one cares, where is your leverage?  The bundled model in which consumers pay for networks they receive whether or not they watch them has been a bit of a safety net for many outlets.  If the system “unbundles”, what happens?

That’s why a few bits of information paint a grim picture for my business alma maters.  This from GigaOm:

TV viewers are abandoning traditional broadcast and cable networks for online streaming services, and new devices in their living rooms are making it easier for them to cut the cord. That’s the gist of two new studies from Nielsen and GfK.

Or the Wall Street Journal:

Viewership of traditional television dropped nearly 4% last quarter, as online video streaming jumped 60%, according to a new report from Nielsen, crystallizing a trend for TV-channel owners amid ratings declines.

What effect does that have?  Business Insider says:

Data from The Standard Media Index — which claims to pull 80% of US advertising agency spend from the booking systems of five of the six global media global media holding groups, as well as some  independent agencies — shows that television ad spending showed a “considerable drop” in October, and was down 9% on the same period last year.

Streaming video viewing was about 4.8% of the time spent on traditional TV.  A year later it’s almost 8%.  Still small, but Nielsen doesn’t measure Netflix viewing (which is by far the greatest source) on anything but PC’s.  Quite a bit is viewed via tablets and over-the-top devices so this number is understated.

Is network and cable TV at the end-times?  No, but it’s not unthinkable anymore that those times could come.  CBS has launched a stand-alone streaming service, as has HBO.  One can’t help but wonder what happens when ISP’s, many of whom own traditional networks, stop (allegedly) throttling services like Netflix or eliminate usage caps.  Add the dawn of the “ala carte” era in cable packages and suddenly the TV world looks very different.

Thoughts?

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Filed under digital media, Reality checks, Thinking Aloud

Turf Burns

I read an article about a fine imposed by the FTC on an ad agency. Apparently what the agency did was to ask employees to promote Sony‘s PlayStation Vita on Twitter as if they were “regular” consumers. Agency employees then used their personal Twitter accounts to make positive posts about the gaming device. Obviously there was no disclaimer in each tweet that the person posting was an agency employee or had a financial relationship with the product.

Seal of the United States Federal Trade Commis...

 (Photo credit: Wikipedia)

This sort of thing is known as “astroturfing.”  It goes on in politics all the time and is “the practice of masking the sponsors of a message or organization (e.g. political, advertising, religious or public relations) to make it appear as though it originates from and is supported by grassroots participant(s).”  Fake reviews are a form of this when they’re written by marketing or PR people on behalf of a company.

I’m not sure what genius thought that this could in any way be considered smart marketing but it’s an expensive lesson.  Especially when you put it in this context:

Almost 8 in 10 American adults read online consumer reviews for product and services before making a purchase, with this figure relatively constant across generations, according to a survey from YouGov. The study analyzes the use of online reviews from a variety of angles, finding that a bare majority (51%) of those who read consumer reviews generally read at least 4 before feeling that they have enough information to purchase a product or service…the YouGov survey also finds that among the 44% who post online reviews themselves, 49% (including 58% of 18-34-year-olds) admit to having at some point written reviews for products and services they haven’t actually purchased or tried.

So reviews are important to consumers yet consumers themselves sabotage the reviews’ value.  Add that to the astroturfing that goes on and you might say “oh, everyone does it.”  As the expression goes, it’s all fun and games until someone loses an eye.  Get caught, as happened in this case, and you pay financially (the cost to defend a complaint even if there isn’t a fine) and with your reputation (it doesn’t matter if “everyone” does it – you got caught).

There is very little upside to posting fake reviews and a lot of downside.  That spells bad idea in my book.  Yours?

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Filed under Consulting, digital media, Helpful Hints, Huh?