Week of August 20, 2007

Apple iPhone Unlocked

Friday, August 24, 2007

Well, it took a few months but the Apple iPhone has officially been unlocked, and can now be used with any compatible phone network internationally. Thanks to a US government decision which allows the unlocking of cell phones from carriers, the team that cracked the iPhone lock can profit from their efforts--and they are. Log onto http://www.iphonesimfree.com, and you can see that the team is preparing to sell their unlocking software to consumers.

One of the primary engines driving all of technology and media moving into the future was first voiced by Pollack Media Group in our annual New Media Landscape report: Consumers abhor a vacuum, and if there is a gap between consumer desire and what companies deliver, it will be filled, even if it is by consumers themselves. The unlocking of the iPhone is a perfect example of that.

The Future Of Advertising Is On Facebook

Thursday, August 23, 2007

It seems like only weeks ago we were stating the future of advertising hadn't arrived yet. Wait, it was only weeks ago. In late July, I wrote "A quick look at the major social networking sites gives ample evidence that behavioral advertising has a long way to go. MySpace and Facebook have an overwhelming amount of data about their users at their fingertips, yet their advertisements are decidedly old school." In a testament to just how fast the digital world moves, social networking powerhouse Facebook announced this past week that it was planning a new advertising system that would target ad delivery based on the profile information of its users. Yes, that future I pointed to back in July has arrived in August.

The real complication here is that advertisers will pay a rate premium for this much more focused targeting, but they also very well may end up paying less overall due to their focused targeting displaying fewer ads to a smaller group of people. The benefit to Facebook is that their "per expression" rate increases, but the downside is that, as I mentioned, those advertisers may end up spending less money overall. As a result, Facebook will need to find more advertisers to fill their unused higher return inventory. If Facebook can increase its client base across a broad range of new advertisers looking to more effectively target an audience, then this is a huge win for both Facebook (they make even more money) and advertisers (they reach more potential consumers while potentially spending less money).

SoundExchange: Divide & Conquer?

Wednesday, August 22, 2007

SoundExchange, the collection arm of the music industry, has extended an offer to small webcasters to maintain the streaming rates in effect since 1998, an offer that would supersede the new Copyright Royalty Board rates. SoundExchange classifies "small webcasters" as those with annual net revenue of less than $1.25 million. This would keep royalties in the range of 10-12%.

Small webcasters have until September 14th to accept the offer. Will they accept and leave bigger webcasters (online only and terrestrial radio) to fend for themselves? Will this move, if accepted, be enough to turn down the heat in Washington for a settlement between SoundExchange and webcasters? The next 3 weeks should be very interesting.

Starting over with Time Warner

Tuesday, August 21, 2007

Time Warner is about to offer a new service in test markets called "Start Over" that marries the convenience of DVR time shifting with the desire for advertisers to have all TV viewers see their commercials. Start Over is a service that will act like a stripped down DVR. It will allow users to watch programs anytime the day that they are broadcast. The best part is that it's free. However, unlike a DVR, it will not have a fast forward feature, meaning that users will not be able to skip through commercials.

Time Warner is betting that users will like the convenience of time shifting even more than the ability to skip commercials. This will balance the desire for viewers to watch shows at their convenience with advertisers' desire to maintain large audiences for their commercials. This move, which comes after just a few months after Nielsen started to monitor commercial retention, seems like a good first step towards a technological solution to keep viewers and advertisers happy.

More of the same story for newspapers

Monday, August 20, 2007

Lee, McLatchy, and Gannett released results today, and the story looks very familiar: Falling overall ad revenue due to falling print ad revenues countered by increasing online ad revenues. Of course the trouble for the industry is one all media industries are facing: The increase in online revenue is nowhere close to replacing the falling print revenue.