Message From Michael -- April 30, 2007

THE TWO DIGITAL DIVIDES

THE WORLD’S MOST VALUABLE BRANDS

MEDIA VIOLENCE

MYSPACE NEWS FOLLOW UP

THE WORLD TRADE DIVIDE

COCKTAIL CHATTER


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THE TWO DIGITAL DIVIDES: One is in the U.S. – between the rich and poor, the urban and rural, the have’s and have not’s. The other is between the U.S. and the rest of the world. That last one has become so touchy that the U.S. House of Representatives AND the U.S. Senate are holding committee hearings into why so many countries have jumped ahead of the U.S. in terms of broadband penetration. Using figures supplied by the Organization for Economic Co-operation and Development (OECD), the chairman of the committee, Senator Daniel Inouye says the U.S. has dropped from 4th in the world to 12th and now to 15th in terms of broadband penetration per 100 population. Denmark ranks #1 with 31.9 subscribers per 100 inhabitants, followed by the Netherlands, Iceland, Korea, Switzerland, Norway, Finland, Sweden, Canada, Belgium, the United Kingdom, Luxembourg, France, Japan and then the U.S. at 15, just ahead of Australia, Austria, Germany, Spain and Italy. Yet at the same time it should be noted that with 58 Million broadband subscribers, the U.S. alone accounts for nearly a third (29%) of the total broadband subscribers in the OECD. Japan with 25 Million is second.

The head of the National Cable and Telecommunications Association argued that it didn’t make sense to compare the larger and more dispersed U.S. to countries whose population density is so much higher and so much more concentrated, so that distribution by broadband is easier. And the OECD figures bear that out… to a degree. The U.S. has a population density of 32 people per square kilometer compared to Denmark’s 126 and the Netherlands 400 and Korea’s 485. Of course, that doesn’t quite explain why Norway with 14, or Finland with 16, Sweden with 20 or Canada with 3 inhabitants per square kilometer still beat the U.S.

As to that other digital divide, NCTA head Kyle McSlarrow testified in committee that broadband is available to 93% of households that could access cable TV service, but that for “economic, cultural and demographic” reasons, many did not. He told the committee that a quarter of Americans (26%) still do not own a computer and that one in five (21%) for some “inexplicable” reason still relied on dial-up even though broadband was available to them.

The head of the group Connected Nation says Kentucky is “on track” to be the first state with 100% broadband coverage. Using a public-private partnership, the group has increased broadband availability and adoption and the ownership of computers at home through programs like its so-called No Child Left Offline. Group head Brian Mefford told the committee that the economic impact has been enormous with an increase in the number of graduates who stay in Kentucky, an increase in the number of out of state graduates remaining in Kentucky and an increase in doctoral degree students staying in Kentucky.

THE WORLD’S MOST VALUABLE BRANDS: It’s official. Google has knocked off Microsoft to become King of the Mountain when it comes to brand rankings. Market research firm Millward Brown says Coca Cola was #2 with Microsoft now #3. Wal Mart came in #4. The top-ranked brand from a non U.S.-based company, according to the report carried on CNN Money, was China Mobile. Nope, me either. Never heard of it. But a visit to its website indicates its total subscriber base is 316 Million.

MEDIA VIOLENCE: I’m sorry but no cute headline on this one. Yes, I know you may have seen this already but I’m including it this week because I thought you might have been as confused as I was – that there was not just one but two reports by two federal agencies scolding the media for not doing more. The Federal Trade Commission found that while the movie, music and video game industries “generally complied with their own voluntary standards” when it come to ratings and label, they still were marketing the violent material on television shows with substantial teen audiences; but interestingly and more critically, the FCC was critical of the viral marketing through social networking sites like MySpace and YouTube.

Meanwhile the Federal Communication Commission re-asserted that exposure to violence in the media increases aggressive behavior and that the various industry efforts to reduce exposure have had “limited effectiveness.” The report says that by the time most children begin the first grade, they will have spent the equivalent of three school years in front of the television set. And the average American household has the television set turned on 8 hours and 11 minutes a day.

The commission said its mandate was to determine what negative effects on children are caused by the cumulative viewing of excessively violent program; what constitutional limits are there on the government’s ability to restrict such programming; and is it in the public interest for the government to adopt a definition of “excessively violent” programming harmful to children. And the answer, with some qualifications and disclaimers, appears to be – Yes, Yes and Yes. FCC Chairman Kevin J. Martin notes that there is a big difference between “real life violence shown in a news story (and) fictional violence depicted for purposes of ‘entertainment.’” (He’s the one who put the word in quotes.) And, yes, this probably deserves more in-depth reporting for a possible later MfM.

MYSPACE NEWS FOLLOW UP: You’ve probably heard/ read that MySpace has adopted a news aggregation service with online users voting for their top story. Of course you have, because it was in last week’s MfM. Anyway, taking the same advice I give my clients – I followed up the story. Well, let’s just say the BBC, MSNBC, CNN or any other news organization for that matter, doesn’t have to worry. Nobody cares! I checked nearly a hundred of the news stories posted. Out of 20 different categories and more than 100 stories, ONLY ONE got a vote – a single vote. And that was the story about Elton John building an art gallery at home. Coalition forces kill 130 Taliban fighters – 0 votes. Iran to attend key meeting on stabilizing Iraq – 0 votes. Cardinals Hancock dies in truck crash – 0 votes. And so on and so on and so on. It may raise questions about MySpace’s plans to hold a so-called Presidential Primary online. Although as a further factoid, Barack Obama has more than 90,000 friends on MySpace, way ahead of John Edwards at 17,000, Hillary Clinton at nearly 8,000, John McCain at nearly 4,000 and Rudy Giuliani – no, sorry, his friend list is listed as private. You must be invited to see his profile.

IT’S NOT HARD BEING GREEN: Despite what Kermit the Frog says. Media trend letter Cynopsis reports more than a dozen “go green” efforts launched after last week’s Earth Day including The National Geographic, Hearst Magazines, the CW, and more. On a personal note, as I sat in the veterinary clinic, more than half a dozen of the magazines from Forbes to Outdoors to Atlantic all had front page articles on the environment. Which all seems to validate the MfM beginning of the year survey which indicated that the environment was going to be the hot topic (no pun intended) of the year.

THE WORLD TRADE DIVIDE: Okay, okay, I know what you’re saying – enough already with Billionaire Warren Buffett. However, considering the lead article in this week’s MfM, I thought his thoughts on world trade are apropos. The Billionaire says he is a “fervent” believer in what he calls REAL trade – “the more the better for both us and the world.” He defines Real Trade as purchases that are reciprocated by sales. In other words, the U.S. sells a Billion dollars in computers to China and China sells the U.S. a Billion dollars in cars. Buffett says we had $1.44 Trillion of this “honest-to-God” trade in 2006, but we had $0.76 Trillion in PSEUDO trade – purchases not reciprocated by sales. The result is that the U.S. is transferring ownership of its assets or I.O.U.’s to other countries. Adding to the problem is that for the first time since 1915, Buffett says, the “investment income” account of the U.S. turned negative in 2006. Foreigners now earn more on their U.S. investments than we do on our investments abroad. “In effect, we’ve used up our bank account and turned to our credit card,” he writes. We’re wealthy enough and have behaved responsibly in the past so that despite all this, Buffett says, Americans will live better ten or twenty years from now. But at some point in the future, he says U.S. workers and voters will find this annual “tribute” so onerous that there will be a severe political backlash and any idea of a “soft landing” out of this is “wishful thinking.”

COCKTAIL CHATTER: A report by research firm eMarketer says the average age of persons who download video from the Internet is 39.4. User generated videos made up 47% of the total online video market in the U.S. in 2006, according to media analyst firm Screen Digest. By 2010, the firm predicts more than half (55%) of all video content consumed online in the U.S. will be user generated, representing 44 Billion video streams. More than 70% of Americans 15 to 34 years old are active users of social networks, according to TNS Media Intelligence. The Fox network show House was the most watched broadcast prime-time show in DVR playback, according to Nielsen Media Research.

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