Message From Michael -- June 11, 2007

MOTHRA VERSUS GODZILLA

LET THE COMPETITION CONTINUE

NO LONGER A TWO WAY BATTLE

COCKTAIL CHATTER


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MOTHRA VERSUS GODZILLA: It’s the classic film, but did you know that Godzilla also went up against King Kong, and creatures known as Biollante, Destoroyah and King Ghidorah? Sometimes Godzilla was the hero and sometimes the anti-hero. Well, there are a similar series of contests going on, with the definition of who the hero is, depending on your point of view. The Toshiba developed HD-DVD and the Sony developed Blu-Ray are battling over who controls the home video sales market with releases of movies on the competing formats. Microsoft meanwhile has launched Silverlight to try and wrest the content creating crown from Adobe’s Flash multimedia authoring program. And, according to research call center Bridge Ratings, old media Radio may be facing a challenge from new media Cell Phones for news and sports info. Although radio remains the primary source by a two to one margin (65% versus 30%), the percentage of consumers picking radio for news and sports info dropped 11% while the percentage picking cell phones increased 11% in the last two years. But the big showdown pits traditional media Television against new media Broadband video. The odds are similar to the radio versus cell phone battle, but again it’s all a matter of perspective.

A study by ‘marketing research consultancy’ Ipsos Insight says even among consumers who ‘actively stream and download video content,’ three quarters of their video consumption (75%) is through a television set with only 11% being viewed on a PC. On the flip side, communications giant Motorola released a study of European broadband users which shows nearly half (45%) are watching some TV on the Internet. And even though the Ipsos report says Americans still are “entranced” by the increasing variety of content options available on their TV’s, a different study by media agency Publicis says the public is becoming blasé about TV’s offerings, in prime time in particular, with more than a third (38%) saying they’re less satisfied than in past years. The Washington Post reported that 2.5 Million fewer people tuned into the major networks this Spring season compared to last year, although the article says it is uncertain whether the change is a result of fewer TV viewers from Web use or time shifting. Nielsen Media Research released a report saying that the ‘decline’ in TV viewing is attributable to DVR usage and that people are actually watching as much as before. Meanwhile, the major networks have all gotten into the business of delivering program on the Internet. The biggest and latest player may be the British Broadcasting Corporation which unveiled a new streaming video player called iPlayer with its entire schedule soon available.

And even among the broadband video operations, there is a Godzilla like battle going on. Joost which was created by the Scandinavian duo who created Skype and Kazaa is quickly becoming the 600-pound gorilla of the broadband TV market, lining up major networks AND major advertisers. But it is not the only one, by any stretch of the imagination. Babelgum uses the same peer-to-peer technology (in which bits of data are shared among multiple computers instead of being housed on just one server) to distribute TV content. Even more unusual is Democracy Player, an open source TV video player created by a group called Participatory Culture Foundation which wants to build a “new, open mass medium of online television… (because) we think it’s a problem that a small number of corporations control mass media.”

As a side note to all this, a public thank you to Raycom CIO Dave Folsom for getting me an invite to beta test the Joost player. I’ll let you know what my admittedly semi-informed testing shows, after I’ve had a chance to kick the wheels for a while.

As a foot note to the declining viewership, reporter Paul Farhi reports in The Washington Post that the number of people watching Washington’s four leading news stations at 5pm and 6pm fell by about 8% overall from May 2006 to May 2007. But, he says if you go back to May of 1997, the change is even dramatic with a decline of 25% in the late news viewing and 37% in the 6pm viewing.

LET THE COMPETITION CONTINUE: As long as we’re on this battle theme, let’s look at some others. In social networking sites, the 16-hundred pound gorilla is, of course, MySpace with nearly 80% of the market, according to research firm Hitwise, while the 6-hundred pound monkey is Facebook with nearly 12% of the market. The chimpanzees of the social networking sites are Bebo and Imeem which get about one percent, focusing on music and video, and Black Planet which also gets about one percent focusing on the African American community. When it comes to virtual worlds, the 800-pound gorilla is Second Life which we’ve talked about in previous MfM’s. But a Swedish software company may soon make a monkey out of them with plans to build a massive virtual universe for China. The company, MindArk, says the Chinese virtual world will be able to handle 7 Million players at the same time and is aiming at 150 million users who are expected to generate $1 Billion in activity every year. For comparison’s sake, Second Life had 1.3 Million people log into the site in March, an increase of 46% since the beginning of the year, with most those visitors from Europe and only a fifth from North America. And in the war of the sexes, males account for nearly two thirds (63%) of the podcasting audience with only a third (37%) being female.

NO LONGER A TWO-WAY BATTLE: Let’s keep the theme going. Traditionally the battle for website NEWS and information users has been between television stations and newspapers. Regular readers of MfM will remember The Media Audit study of websites in 84 cities. A recent article in Editor and Publisher interprets the report as showing the television websites are getting stronger compared to newspaper websites. Four of the top websites are television sites (WRAL, KUSA, KENS and WVTM) and a fifth is a newspaper-TV combo (San Antonio Express News and KENS). The question, according to Bob Jordan, president of International Demographics, is whether TV stations can maintain that momentum. Now, there appears to be an even bigger question. Can TV and newspapers maintain their position against competition from what are called “pure play” media websites or multimedia websites? (That’s the Google, Yahoo, Digg sites of the world.)

That’s an especially critical question for newspapers, which accounted for more than a third (35.9%) of all local online advertising in 2006, according to research firm Borrell Associates. And the Newspaper Association of America noted that ad expenditures for newspaper websites increased 22.3% to $750 Million in the first quarter of this year compared to last year. TV sites get a meager 7.7% of local online advertising. The folks at Borrell Associates though say the spoilers are the pure play sites that are growing at the expense of local online advertising. Traditional media websites have gotten the “easy money” from existing advertisers, but the growth money will come from nontraditional advertisers, says Borrell. And if that doesn’t complicate the issue enough, another report by Hitwise US News and Media Report shows that the share of traffic leaving the News and Media industry for Multimedia sites doubled (196%) from April 2006 to March 2007. Part of the ‘problem’ is that news websites are increasingly dependent on search engines for traffic. What’s even more disturbing is that the folks at Hitwise say the market share of visits to the top 10 News and Media Websites declined 3.8% year to year, “indicating that news consumption is beginning to fragment.” Just to make sure that I don’t leave all my media friends completely depressed, the Online Publishers Association reports that nearly half (44%) of U.S. online video users watch online clips at least weekly and that three-quarters (73%) do so at least once a month. And the most popular genre for this viewing – news and current events.

COCKTAIL CHATTER: More than 71,000 people have registered to be monitored for health problems associated with the dust created in the aftermath of the 9/11 destruction in New York City, according to the New England Journal of Medicine. One in five people say they bring their laptop computer with them when they go on vacation while four out of five bring their cell phones so they can stay in the electronic loop, according to a poll released by AP-Ipsos. Nearly three quarters of Americans (73%) agree with the statement that “the rich get rich and the poor get poorer,” according to a survey by the Pew Research Group. That’s an 8-point increase since 2002. The same group did a different study which found that two-thirds (65%) of Americans believe corporate profits are too high. A survey by MasterCard found that three quarters of consumers in the Middle East have an Internet connection and half pay for their online purchases with credit cards, reflecting a steady gain in online shopping in the region. An elephant’s trunk has 150,000 muscles and a bird can fly a week without stopping, according to Animal Planet’s new show Fooled by Nature and reported in Cynopsis.

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