Message From Michael -- October 15, 2007

THE INTERNET AND TV

OPPOSITE ENDS OF THE SPECTRUM

COCKTAIL CHATTER – PUZZLES AND BEAUTY AND GAMING

THE AWARD WINNERS DINNER

NOTEWORTHY EVENTS TODAY


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THE INTERNET AND TV: A study by networking giant Cisco Systems (the company that makes the routers used to connect computers) predicts that monthly Internet traffic in North America will increase 264% by 2011 to more than 7.8 Million Terabytes – again, MONTHLY. Just to remind you, a terabyte is a Million Megabytes or a Thousand Gigabytes. Much of that, of course, is coming in the form of video. Okay, I’m still wrestling with the fact that YouTube alone accounts for as much bandwidth today as the entire Internet did in 2000, according to Federal Communications Commissioner Robert McDowell. That was from a Wall Street Journal commentary. Now, another article from WSJ quotes Larry Roberts, the original creator of ARPAnet, the precursor to the Internet, as saying the Internet is ‘last-generation technology.’ In what may be one of the great quotes of the day, he says, “the Internet wasn’t designed for television… I know because I designed it.” He and former Cisco chief technology officer Len Bosack are trying to re-design the infrastructure of the Internet to cope with that 264% increase. One-time pirating website BitTorrent is doing the same thing, designing what it calls DNA (Delivery Network Accelerator) for your PC.

And they better work, because several recent studies indicate that, as one study put it, online video has gone mainstream. Microsoft’s digital agency Avenue A/ Razorfish reports that two-thirds of what it calls ‘connected customers’ (meaning people with broadband access) say they regularly watch video on YouTube and that nearly all of them (95%) report that they have watched an online video in the past three months. Further indication of the growing interest in online video comes from a study by Frank N. Magid and Associates which found that only a quarter (23%) of Millennial would rather watch video on TV instead of the Internet. More than a third (36%) of the 18-24 crowd say that the PC is “competing” for their entertainment time. Meanwhile Wayne Karrfalt reports on TVNewsday.com that most of the major TV groups now have a C-level executive dedicated to developing and monetizing online activities even though online activities only represent about 5% of the revenue pie for them.

And they’re not alone; BrightCove announced that it has launched a new service providing what it calls “broadcast quality online TV shows” using the BitTorrent technology mentioned above. Joost, as you will recall from last week’s MfM, has moved out of the beta stage and gone public. Vuze ‘Open Entertainment Platform’ which also promises high resolution video has opened up its platform to independent producers. Add to the expanding list Comcast’s Ziddio.com which focuses on consumer generated content. And, reportedly, today newly minted Nobel Peace Prize winner Al Gore is supposed to announce a major development to the CurrentTV site. Read Cynopsis and you will seek a weekly, but often daily, listing of new television series being released on either iTunes or UnBox.

And for good reason. The Interactive Advertising Bureau reports that Internet advertising in the second quarter of this year passed the $5 Billion mark for the first time. That’s the highest quarterly revenue reporting since 1996 and a 26% increase over the previous year. The first half of 2007 is more than $10 Billion with the yearly revenue expected to hit $21 Billion. The report tracks Internet advertising revenue starting in 1999 when the total for the year was $4.6 Billion. It nearly doubled the next year, 2000, but then declined for several years before starting its phenomenal growth in 2004. On the flip side (there’s always a flip side), a survey by Nielsen of 26,000 consumers in 47 markets worldwide found that advertising in old media scored much higher than advertising in new media. Nearly two thirds (63%) say they trust newspapers ads and more than half (56%) say they trust TV spots and magazine placements. But only a quarter (26%) trust banner ads and only a third (34%) trust search ads.

Indicative of the power of peer recommendations, the same study found the most trusted form of ‘advertising’ came from other consumer recommendations with more than three-quarters (78%) expressing confidence. And a warning to marketers everywhere, the Nielsen survey noted that some word-of-mouth experts report that bad experiences outnumber good ones by as many as five to one.

Just as an only semi-related side note, Raymond Kurzwell, the author of The Age of Intelligent Machines and The Singularity is Near: When Humans Transcend Biology, estimates that a human being’s functional memory is about 1.25 Terabytes.

OPPOSITE ENDS OF THE SPECTRUM: Two recent reports contain some interesting observations about Millennials and Baby Boomers. News Director Stacy Woefel of the University of Missouri’s KOMU-TV station writes about Millennials in the recent Radio Television News Directors’ Association magazine, The Communicator. In part, the story says Millennials want financial security, strong mentors and a feeling of being someone special. There is also a sense of entitlement along with unrealistic expectations. On the other end, a report by Mediamark Research Inc., found Baby Boomers are optimistic with four in ten (39%) saying they think their ‘households” will be better off financially a year from now and 90% of them saying they ‘themselves’ will be better off a year from now. More than half of Baby Boomers (55%) reported vote in an election, with a third (31%) undertaking a home remodeling project and less than half (41%) playing the lottery.

COCKTAIL CHATTER: U.S. consumers have lost more than $7 Billion to viruses, spyware and phishing, according to a survey by Consumer Reports. A group of M-I-T grads have designed a folding-wing plane, the Terrafugia, that they say will eventually be the prototype of a hybrid car-plane that would make George Jetson jealous. Makers of a puzzle called Eternity II, being sold at Toys R Us for $49.95, are offering $2 Million to someone who solves the puzzle which has 256 geometric shapes (sort of a successor to Rubic’s Cube) by December 31, 2007. And a study by researchers at the University of Toronto found that the “spatial gap” (the ability to process visual information from a wide variety of sources) between men and women can be closed if women spent time playing video games. According to Virtual Worlds Management (Yes, strange as it may seem, there is an organization aimed at managing virtual worlds), venture capital, technology and media firms have invested more than $1 Billion in 35 virtual worlds.

Okay, this one isn’t cocktail chatter, although it is, but it isn’t. Anyway, MfM readers who remember the Dove “Evolution” spot will want to see the newest one – Onslaught, which is a one-minute visual warning to mothers to “talk to your daughter before the beauty industry does.” You can find it on YouTube or the official website, campaignforrealbeauty.com.

THE AWARD WINNERS DINNER: It’s tonight in New York, when the national Edward R. Murrow award winners will be honored. I just wanted to add my own Mazel Tov to the friends and winners at WKYT/ Lexington (Continuing Coverage); KEYE/ Austin (News Series); WSLS/ Roanoke (Newscast); WTVQ/ Lexington (Spot News); WAFF/ Huntsville (Website); and news director Frank Volpicella at KVUE/ Austin which won for Overall Excellence.

ALSO OF NOTE TODAY: Media Mogul Rupert Murdoch launches the company’s new business channel today. And today is blog action day when bloggers around the world are supposed to join in solidarity for the environment. You can visit the website blogactionday.com.

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