Digital Convergence: Facebook & Twitter on TV.

Summary:        Now we have a new form of convergence:  social networking and (cable) TV.  Not a bad move.  Verizon announced two new “products” in its “social TV” initiative.  One is a set of widgets that enable viewers to connect with other viewers through various social networks—while watching TV.  The second enables viewers to watch user-generated content from certain websites.  One more step in convergence.  Of course, it is a bit like the Zeno’s Paradox of digital convergence.  You could also say:  It’s about time. (Full disclosure:  We also posted this at globalstrategic.wordpress.com)

Through its FIOS TV service Verizon is taking a few bold steps towards digital convergence.  First, Verizon will create an application store with widgets developed together with some notable social networks—Twitter, Facebook, Veoh and a few others.  So, a FIOS subscriber can follow tweets they select from a list—including the programming they are watching.  They can log into Facebook (but not yet Twitter) to update their profile as to what they are watching at that moment.  An SDK will be launched soon.

The second new product permits a subset of subscribers to start searching and viewing UGC from certain video sites, including Veoh and Blip.TV.

So What?

Well, it is another step closer to digital convergence.  Using TV programs to tweet is an obvious stimulus to that convergence, when you consider how often TV shows are the subject of tweets.  Tweeting about these programs is of course nothing new and these widgets do not (yet) enable tweeting through the TV.  What it doespermit is to enable a viewer to see whose twitting what and when.

So that’s why it’s like Zeno’s Paradox.  Remember:  Walk halfway across the room, the half the remaining distance, then half the remaining distance—and so forth.  This is a little like that:  closer, closer, closer, but not quite there.

But the move is just the first and we can expect more.  The application store will propel developers to pay attention to crossing the chasm between the TV, the PC and the mobile phone.  Think about it:  Twitter is (largely) phone-based and Facebook is (largely) PC-based-platform.  This appeals to the developers.  FIOS competitors will figure out their own way to merge social networks with TV programming.

OK, now the gears are churning.  Think of characters using Twitter in the programs—and they are matched by Twitters available to FIOS users.  And so forth.

Stay tuned.

European Newspapers Embrace the Digital Future

Summary:  The digital ventures of European newspapers look like they are paying off with new hopes for robust newspapers.  Plus, you get to lose weight, too.

We have posted quite a few blogs on newspapers (see others at globalstrategic.wordpress.com), an industry caught in a Chicken Little kind of depression.  So we turned to Europe to see what’s happening and it is digital and good.

Want to join a weight-loss club?  Pay $90.  Through the newspaper site.  Want to revise your profile?  Pay more.  In Norway, a tabloid newspaper, Verdens Gang, is affiliated with VG Nett, which provides news for free but charges for other premium services (like the weight-loss club).

Now, paying to upgrade your profile may be a bit much (unless the weigh-loss membership has not been successful) because of the nearly ubiquitous networking sites, but the point is to offer other services for a fee.

The Old Horse of Repurposing Content

Axel Springer, a large player in the publihsing space, revived an old concept, which makes perfect sense:  Write once, distribute many times.  Write the article and post it on multiple sites.  This is the old concept of “repurposing” content for different platforms and different audiences.

Data as a New Source of Revenue

And lest we not forget the lifeblood of newspapers is delivering audiences to advertisers.  If they think about it, the newspapers can mine vast amounts of data and deliver even better information to the advertisers.  This is a good thing.

So, new thinking–including some old thinking–gives these newspapers new revenue and new audiences.  They are not only building their brand, they are building it across platforms to reach both the same audiences and different ones.

And some of them get to lose weight, too.

Site Scraping Gets Rough

Why this matters:  traffic=ad revenues.  Scraping gets riskier.

Last month, the New York Times Corporation settled a suit brought by Gatehouse Media Inc., which runs websites for 125 Massachusetts newspapers.  The NYT’s Boston Globe was essentially scraping the Gatehouse sites.

Technically (and this distinction is important), the Globe site was returning readers TO the page of the article.  Gatehouse complained that readers were bypassing the ads on the home page.  This is interesting.

Intuitively, one would think that a large number of readers who were returned to the Gatehouse site (albeit at a subsidiary page) would in fact go to the gatehouse homepage.  But no, Gatehouse wanted more (rightly or wrongly).  It also turns out that Gatehouse could figure out how to block this process, which probably led to the NYT offering to settle–so as to avoid case law that goes against them.

So what?

Sites regularly scrape or otherwise link to other sites–usually to the subsidiary pages.  We get a lot of people asking of us if they can do it.  Well, this case—though settled and therefore not an opinion for purposes of precedent–suggests (to no one’s surprise) that doing so will subject you to legal challenge that will cost a lot to defend.

It makes sense, too.  Again, no opinion as to whether it is right or wrong, legal or not, but common sense should tell us that people who own the rights and go to the trouble of posting content where they want it posted should be able to control access to it.

Of course, Google is another matter.

Hollywood Pros to Post on YouTube?

The William Morris Agency just cut a deal with YouTube that will enable YT to display professionally-produced videos–presumably with the famous actors in the WM stables.  We like this idea:  In fact, it’s about time.  Here’s why:

1.  Low production quality is he standard on YT; it will be good to see something worth seeing.

2.  Almost paradoxically, that which is of good (production) quality is the copyrighted material from the studios–i.e., professionaly-produced.

3.  The problem with the material mentioned in #2 above is that most of it is pirated–or at least no one is getting paid for it.

4.  This (and their other deals with the studios) may actually make some money.

5.  Besides, YT is a good platform–now it can get better.

6.  Oh yes, I forgot:  YT now has credible competition in this space. Hulu.com.

The Ad Model Will Prevail

The online ad model is taking a pounding because some of the major names in the biz are not hitting their numbers and CPMs–and other metrics with which to make money–are plummeting.Here’s the prediction:  It will dip for a while and then climb–fast.  And here’s why:

1.  The current dip comes from these sources and, if you ponder them for a bit, you will see that they reinforce each other:

Source One:  The contaminated economy in general.

Source Two:  The te3rrible ad-spend market, related to the lousy track record of large media companies in hitting their numbers.  (And in particular, companies with a big Internet or mobile play)

Source Three:  Advertisers still “don’t get the web.” (OK, let’s expand our brains and start saying something like:  “Advertisers don’t get the digital platforms.”)

So, you have the ad people unwilling to stick out their necks:  What they really want to do is preserve their jobs while all around them are losing their heads.

2.  The upside?

2.1 (love this numbering system, huh?):  The reach per dollar spent is pretty enormous in the digital markets.

2.2 The demographics are changing–of the ad buyers and ad placement people:  They are “digital natives.”

2.3  The production costs are nearly nil.

2.4 You can change ads on the fly and according to market response.

2.5  And the main reason:  The granularity of the demographics and the data.  It is soooo good (and getting better every day) that people do not know what to do with it.

2009 is one of those transition years–the shift of more money to new media platforms.  Ad agencies will look like geniuses because “now they get it.” But, …

It does not follow that this is advice for new investments.  A lot of people are not sanguine about start-ups and the ad-driven model.  IN other words, the fortunes have been made there.  Now it is the spread of the model to the established economy.  Advertising needs scale or depth–breadth of audience or depth in a niche audience (which, when you think about it, is really the same thing).  Venture capitalists are not looking very closely at startups with the ad-driven model.  So even if you think you are the next Google, please be prepared for a lot of rejection.

Please be prepared for a lot more going on in the new media ad world?  Digital platform ad world?

And where will that take us with the digital transformation occurring in February????