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The Internet Fuels Expected $2 Trillion Media Spending Frenzy
June 23, 2006
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"They say a marketer's and consumer's dream is the World Wide Web. It's the best of mass advertising and the best of target marketing."
-- David King of DDB Needham.This week a new report titled "Global Entertainment and Media Outlook: 2006-2010," issued by the accounting firm PricewaterhouseCoopers, projects that global entertainment spending is expected to reach $1.8 trillion by the year 2010, fueled by the spread of broadband and wireless technology. (Source)
The report also states " Internet advertising will continue to grow the fastest of all advertising modes, racking up $521 billion in sales from $385 billion in 2005 and capturing nearly 10 percent of global advertising dollars, compared with 3 percent in 2002."
Needless to say, this report only further evidences the belief by "those in the know" in the media world, that the Internet will play a much larger part in capturing new audience and engaging more consumers. That's good news for ANYONE wanting to expand their market share of the global entertainment economy because the Internet will also allow those companies and/or individuals, to take advantage of all the benefits the Internet will ultimately offer. ( i.e., new distribution channels, better B2C - business to consumer - relationships, better productivity via online commerce, and more)
What's really important to point is that however bright the expected near $2 trillion media spending estimate might be, it doesn't really factor in the possibilities of even greater growth in spending if online entertainment - music, films, TV shows - continues to grow exponentially with the growth of Internet use in less industrialized countries. If growth in those places increases at an even faster rate, then it goes without saying that the media spending will follow the same growth patterns.
While this report will no doubt be reviewed and well read by all media agencies in the next few weeks, it should also be well read by all entertainment industry concerns. By the end of this decade, advertising and media spending as we know it today, will morph into something not yet defined, and not yet understood. But BIG changes are in order.
The good news for all in the business of selling and marketing any and all forms of entertainment is that all of this spending will mean dramatic increases in sales. The growth will probably make the billions reaped by all major labels when CD sales exploded seem insignificant.
$2 trillion ... that's a pretty big number to put on those Excel spreadsheets when modeling new revenue models with spending versus sales formulas.
Get ready people. The global thirst for entertainment is going to need a whole lot of quenching.
Microsoft Said To Be Developing iPod Rival
Microsoft is developing a music and video device to compete with Apple's iPod and creating its own music service to rival Apple's iTunes, sources familiar with the plans said on Friday.
Robbie Bach, a rising star at Microsoft who headed development of the Xbox video game business, is overseeing the project, one source said. The Redmond, Wash.-based company has held licensing discussions with the music industry and is already demonstrating the entertainment device, the sources told Reuters.
Read more about it by clicking here.
Sony Music Wants Bloggers To Promo Videos, Music
Sony BMG Music Entertainment wants to give bloggers free music and video--sort of.
The music conglomerate is promoting a new site, called Musicbox Video, that showcases videos, artist interviews, behind-the-scenes footage and other material from a broad portfolio of its artists. Want to see a film clip of Bruce Springsteen singing "The River" from the 1980 movie "No Nukes" or some clips from Franz Ferdinand? The site has it.
Read more about it by clicking here.
Report: Apple In Talks To Offer Movies At iTunes
Apple Computer is in talks with most of Hollywood's studios to offer movie downloads via its popular iTunes Music Store Web site, show business newspaper Daily Variety reported Monday.
Citing unnamed sources, Variety said iTunes might begin offering film downloads by the end of 2006, but currently a price on iTunes is a sticking point in negotiations.
Apple's Chief Executive Officer Steve Jobs is said to want one flat price of $9.99 per movie, whereas studio executives want a range of prices that mirrors videos and DVDs at retail stores which, generally speaking, run from discount titles at a few dollars apiece up to $19.99 or more for new releases.
Read more about it by clicking here.
Interoperable Satellite Radios Becoming a Reality
Dual-subscribers of both Sirius and XM Satellite Radio may have hope after all of consolidating both their subscriptions into a single unit - very soon.
Introducing Interoperable Technologies, a joint effort supported and funded by both XM and Sirius, working to bring dual-subscription satellite radios to market. XM and Sirius both share ownership in the company.
Interoperable Technologies, founded in 2003, is in the process of designing and architecting these dual-mode satellite radios, with the help of regular consultations from both XM and Sirius. In 2005 they successfully completed the design of a radio capable of receiving both services, and have a timeline to bring a receiver to market this year.
Read more about it by clicking here.
Celestial Jukebox Falls to Earth
By now, we music fans are well accustomed to getting whatever we want online, whether from iTunes, subscription services such as Rhapsody or free P2P networks.
But this new freedom to listen to anything has come without freedom of movement; you're only free to get new music when you're sitting at your computer. When it comes to portable listening, you're generally stuck with whatever you loaded onto your MP3 player.
Pundits have been yammering away for years about a "celestial jukebox" that will give everyone the ability to access all content ever created, from anywhere, at any time. This long-discussed concept is finally becoming a reality, at least as far as music goes.
Read more about it by clicking here.
Netflix To Do Digital Downloads?
When digital download-to-television becomes a reality, Netflix wants to be the first.
In fact, the Netflix investor relations site already lists digital downloading as one of its growth strategies for the future. "Use our market leadership position to lead the transition to high-definition DVDs and eventually digital downloading," says the Netflix corporate fact sheet.
But a spokesman for the company denies that such a program is imminent, even though an executive at the popular movie download company said Netflix is looking into a download service.
Read more about it by clicking here.
BBC Cancels 'Top of the Pops'
The British Broadcasting Corp. announced Tuesday that it is canceling "Top of the Pops," its flagship music chart show, after more than four decades on the air. BBC director of television Jana Bennett said the show, which first appeared in 1964, would air for the last time on July 30.
"We're very proud of a show which has survived 42 years in the U.K. and gone on to become a worldwide brand, but the time has come to bring the show to its natural conclusion," she said.
Read more about it by clicking here.
MOG Tests Music-based Social Network
A test version of the niche social networking site MOG.com launched on Tuesday with the aim of hooking up people based on their taste in music--a sort of Myspace.com for music junkies.
The free site, started by former MTV marketing executive David Hyman with $1.4 million from private investors, requires users to download its application, MOG-O-MATIC. The application catalogs the music on users' computer hard drives and monitors what they play the most and what new tunes are added through online downloads and portable music players.
The data is analyzed several ways and posted to users' MOG Web pages, which are open to inspection by the online world at large. Users also are encouraged to create their own blogs on their pages about their musical favorites.
Read more about it by clicking here.
CDT Calls For 'Net Neutrality' Protections
As the Senate Commerce Committee prepares to take up "Net neutrality," the advocacy group Center for Democracy and Technology Tuesday called for new laws banning Internet service providers from discriminating against content providers and other Web publishers.
"After careful consideration," wrote the organization in a report released Tuesday, "legislation is necessary to ensure that the Internet's current level of openness--with all its resulting benefits for free expression and innovation--is retained."
The CDT is asking the Senate to pass laws that would prohibit Internet service providers from blocking access to Web sites, or for charging different rates to different Web publishers. The group argues that such rules are necessary to maintain the Internet as an open, accessible medium. The current "neutral" regime, states the report, "permits the greatest level of flexibility for new uses of the Internet," and has "led to an astounding array of innovative technologies," such as "Open SSL," Voice-over-IP, Web-based e-mail, and instant messaging.
Read more about it by clicking here.
THE SONG COMES OF AGE
Paul McCartney celebrated his 64th birthday last Sunday. I doubt he was singing "When I'm 64" as he blew out the candles.
DESPITE HIS JUMPING ON OPRAH'S COUCH ROUTINE, SCIENTOLOGY, AND ALL THE REST
Tom Cruise topping Forbes' annual Celebrity 100 power list with earnings of $67 million.
IDOL WINS LAWSUIT
Ruben Studdard awarded $2 million in his lawsuit against his former manager, Ronald W. Edwards, for misappropriating his credit cards and cash.
IDOL WINS BATTLE
American Idol runner-up Katharine McPhee telling People magazine she battled bulimia for five years and that she only sought help after successfully auditioning for the talent search. " ... American Idol saved my life, because if I hadn't auditioned, I don't think I would have gotten a handle on food," McPhee said.
TIMBER!
Justin Timberlake releasing his second solo album, FutureSex/LoveSounds, on Sept. 12.
NOW THAT KEITH IS OK, IT'S RON'S TURN
A spokesperson for the Rolling Stones confirming that Ron Wood is seeking treatment for alcohol abuse at a London rehab clinic but claiming that the guitarist will be ready by the time the band kicks off its tour July 11 in Milan.
AND HE THOUGHT THE TAXES IN ENGLAND WERE BAD
Elton John suing the Fulton County, Georgia tax assessors office, claiming the county overvalued his 12,000 square-foot condo by assessing it at $4.6 million. John claiming the assessment is $900,000 too high.
OUTKAST BACK FOR MORE
Idlewild, the new album from OutKast, scheduled for release Aug. 22. Big Boi and Andre 3000 will also appear in the motion picture of the same name.
HICKS CLICKS
Taylor Hicks' first single, "Do I Make You Proud," climbing to number one on the Billboard Hot 100 chart.
PRESTON REMEMBERED
Billy Preston remembered at a funeral attended by hundreds Tuesday, including Little Richard, who spoke, and Joe Cocker, who performed the Preston-penned classic "You Are So Beautiful." Letters written by the Rolling Stones, Eric Clapton and Paul McCartney were also read at the service.
COMING SOON!
- Dashboard Confessional, Dusk and Summer (6/27)
- Thom Yorke, The Eraser (7/11)
- Muse, Black Holes & Revelations (7/11)
- Golden Smog, Another Fine Day (7/18)
- Tom Petty, Highway Companion & Revelations (7/25)
2006 Industry Conferences
Date Name Location P2P Media Summit June 22-23 McLean, VA CMJ October 31 - November 4 New York
Quotes of the week
"I will never do another reality TV show. Been there, done that."
-- Jessica Simpson, in Maxim."Bill Gates is stepping down at Microsoft. He says he wants to take some time off and see the country. Today he bought an RV and the state of Arizona."
-- Conan O'Brien"Matt Lauer interviewed Britney Spears the other night on "Dateline". Britney said that she was happy about the interview. Actually she was thrilled to be interviewed by anyone other than child services."
-- Jay Leno"Did you hear about this? North Korea might have missiles with the capabilities to reach the west coast of the United States. I got to thinking about it and hell ... that's Leno's problem."
-- David Letterman
NARIP Information
NARIP (The National Association of Record Industry Professionals) promotes career advancement, education and good will among record executives. To find out more about this great organization, how you can join or attend their events, just go to: www.narip.com.
The B-Side - 'Blips'
SHE MIGHT HAVE TROUBLE GETTING A DMV INSTRUCTOR TO GO OUT WITH HER NEXT TIME: A 19-year-old woman may have to practice a little more after driving a borrowed taxi into a canal just before she was scheduled to take her driver's license test in Pompano Beach, Florida authorities said.
The woman's neighbor, a Broward Taxi Co. cab driver, drove her to the Pompano Beach license testing office and agreed to let the woman practice driving around the parking lot in his car before she took the test, city spokeswoman Sandra King said.
"He said the next thing he knew she was driving through the bushes and into the canal," King said. "He ran over and pulled her out of the car."
"Obviously, she did not take or pass her driver's test," King added. And as Homer Simpson would say, "Duh!"
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