Phrenzie.com

I just noticed that I don’t watch the evening news anymore (and for that matter, any news on TV…and for that matter, TV as a whole).

9.853 times out of 10 (it’s an average), I’m on the Dell reading news and watching video. If I can’t get it on the net, then I just don’t get it…and it’s ALWAYS on the net, in a much deeper way.

TV just isn’t formatted for my needs (when, how I get it and how much of it I want).  Long are the days when I’d get home, crank on the TV to watch what’s going on in the world today.  Rather, I get it on my laptop or phone.

Thankfully, traditional TV has demonstrated clairvoyance by putting the same TV broadcasts on the net.  It makes total sense.  Internet advertising has reached that critical point where there’s enough advertisers paying enough money to reach enough of an audience to make the benefits > costs.

What I also noticed is that I don’t know what time any TV broadcasts come on.  Or in some cases, I know what time they come on, but I’m either busy or just don’t care because I can just go online and watch a replay, rewind if I miss a part, hit pause (almost TIVOesque) or read it and get more information from reading than a 1 minute TV blast.

ABC.com, NBC.com and CBS.com have done it well.  I’m still greatly unimpressed with Fox.com, especially for the Family Guy – Fox doesn’t house a lot of the past episodes (3 for Family guy), so it’s extremely crappy.  My favorite is NBC.com, not because of the bells and whistles, but because they have back episodes of Miami Vice (I’ve got this thing with the show, including all the bad acting that I can’t resist watching – ugh!).

But it just goes to show you how lifestyles have changed over the last decade.  In the late 90s, I remember being annoyed that I’d have to sit at my home desk to watch videos.  Now, it’s no problem and even more satisfying because I can multi-task without the guilt of having the laptop, TV and stereo on, burning up more coal and nuclear energy than several nations, including China.

Fred Wilson, over at AVC.com wrote about a company his firm invested in, Boxee, that’s going to help revolutionize internet TV.  To that end, I’m really surprised internet TV hasn’t taken off in a big way…I heard Sony and the rest said the demand wasn’t there.  I find that hard to believe at best, and at worst, my conspiracy/spidey sense begins to tingle and I wonder if there’s something more devious (cue spokey music here).

Apparently, phone phishing, like email phishing, is back on the rise.

We got a voicemail on our home line saying that there was suspicious activity on one of our cards. Instead of calling the number on the voicemail, we called the number on the back of our card…the official number

The card company said they never called us and that there was NO suspicious activity on the card.

Moral of the story – always call the official number of your bank, credit card or other financial institution (the one on your statements or back of credit card).  I would not call the number on the voicemail, especially with your mobile phone…that’s one less number they have in their data banks that they can spam with text messages.

Here are some helpful links.

Microsoft’s write up.

Phone Phishing.info

There are more, so just do a web search.

Okay, so I have a little OCD, but I told fellow panelists and the audience atthe 2008 Urban Network Summit that MySpace was dieing that FaceBook would overtake it.  

I was right…so to speak.

So “dieing” was a little strong, but I clarified by saying that artists’ fan base was becoming less and less enchanted by MySpace. 

I had proof…when we ran an online video site, we noticed that our viewers said they had a MySpace page, but never checked it.  They got spammed too much, even by artists they actually liked.  Most artists who visited us said they had a MySpace page because the felt like they had to.

I told the crowd that if they could find a way to market themselves on FB, then it would be time well spent, since that was where people were going.  But they should also be on MySpace since it still had a heck of a lot of traffic.

Needless to say, my fellow panelists were about to throw stones when I made my comments.  Then again, think about the best panels you’ve been to…someone said something that pissed someone else off…then the carnage.  It was awesome…

Nonetheless, Facebook is having some problems with its revised Terms of Service and who actually controls your information.  The Consumerist highlighted the issue.

Colleges have been receiving a LOT of new applications from students, at both the undergraduate and graduate levels.  I can’t say that I’m surprised.  Whenever there’s a recession, people use this time to increase their IQ, retool their skill sets and/or hideout before (re)entering the workforce.  This is in addition to the general trend of increasing numbers of high school graduates.

Businesses that service the education space, while not recession proof, are in a pretty good position, recession-wise, depending on the nature of the business.  These companies are hurt by the recession, since their customers make budgetary cuts, and thus, may slash certain spending.  However, this issue tends to be a little mitigated because they offer solutions that either save money or produce incremental increases in costs that are mostly offset by the benefit. 

Think about it. 

More students, means more tuition & fees.  Attracting students…and then retaining them is key to making money.    Duh!  After all, a four year student pays more in tuition, fees, books, room and board, than a student who drops out after the first year…and way more than a student who doesn’t go to that particular institution.  You’d be surprised at how many institutions still don’t get this…

Nonetheless, intuitions are generally seeing more applications.  Imagine being in admissions and receiving 75% more apps than last year.  You’d pray for a solution that could help you more efficiently and accurately manage the influx (this is classic benefit > cost).  Companies like Intelliworks make such apps.

So that’s one aspect.  Another is the non-traditional route, where students are doing distance learning or some hybrid (maybe some lecture and some web-based learning) or are “non-traditional” students, like working adults.  Institutions such as Strayer University and the University of Phoenix have long been fixtures in this space.  Others, like K12, hit the primary education space.  They’re content companies…they provide the curriculum. 

Other companies provide the tools to make learning easier and better, thus, enhancing retention rates.  I’m thinking of Blackboard, which provides the software for web-based learning (among other things).  When I was in school, we used a different app, but had the same functionality – profs could post lecture slides on the site; student groups can post their work from a group project, etc.  It made learning a heck of a lot easier.

And think about other companies in the vertical, like Princeton Review.  No doubt that before the increase college applications, there was an increase in college admission test taking.

So, I don’t think that revenues will necessary sky rocket for these companies.  But I do think that, among the companies in a recession, education companies can make a case for being well position in a recession.

Since gas prices are coming down to more normal levels – presuming this is a trend – I’m seeing more Hummers, Escalades, Sequoia’s and the like on the road.

It’s amazing actually.  

Not that you didn’t see them before.  But you could see the look of “poor driver – I wonder how much (s)he pays for gas ” as people with more fuel efficient cars drive pass them.

Now, I saw my first Hummer in MONTHs right behind me, with headlights blinding me in my rear-view mirrors.

Made me think of what Obama has been saying.  It’s a visicious cycle.  Gas is low, people get the guzzlers.  Gas prices go back up, and it’s panic and heavy discussions of reliance on foreign oil abound.  As soon as prices go down, it’s back to guzzlers and “let’s focus on something else” discussions.

I so glad Obama is focused on green technology and stopping the viscious cycle.  It’s kinda like a cycle of abuse that starts parents beating up on their children, then those children beating up on their children.

RealNetworks created software, RealDVD, that allows you to copy a DVD, on up to 5 computers for $30 (can get additional coverage for $20 each).

Studios (Paramount, Warner Brothers, 20^th Century Fox, Sony and Universal) are like, “Screw that!  We’re building a download biz and we’ll be damned if we lose any revenues from DVD sales.”  So studios are trying to establish a moat around this business to protect it…by suing the hell out of RNWK.

RNWK is saying that copying one’s personal collection of DVDs is cool and covered under fair use.

But given the limits software makers place on the number of copies of software licenses, isn’t RealNetworks being hypocritical?

What if I wanted to buy a copy of RNWKs software (any software) and put it on four computers instead of the three limit (mine, my wife’s laptop, her kid sister – who can’t afford it on her own, and my brother’s laptop).

RNWK would probably have a conniption!

Am I missing something???

As a consumer, I’d like RNWK software, since I’m not trying to make money off of this stuff.

I may want to mix some footage of home video of my 10 month old, with scenes from Star Wars and my mom’s amazing piano and vocal performance in 1989 J.  Again, this is for personal usage, so I’d hate to be limited on usage.

Yet, part of me wonders if the studios are going down the wrong path.  These are the same people who said the home entertainment market (i.e., video rentals) would kill its business.  Now the home entertainment market is massive and actually saves the bottom line for movies that either didn’t or couldn’t make it in theatres.  Adams Media Research estimates lost revenues from DVDs will be about $15B if consumers stop buying DVDs and instead copy DVDs from friends or rental outlets like Netflix or Blockbusters.

The other part wonders if the studios are borrowing a page from the old “failed” record label playbook, “sue anything that moves” philosophy.  In that case, when people virally spread music around the net, it actually created buzz for the artist, which reflected in concert ticket and merchandising sales, paid appearances in movies, etc.  The labels didn’t push to get any of that alternative revenue though.  This could drive merchandising, etc.  George Lucas realized this and built a massive empire (no pun intended) out of it.

But I have to admit, about this last point…it generally doesn’t cost as much to produce good music as it does a good movie.  So in theory, you have to recoup more of the cost from DVD than, say music CD sales.

Yahoo is using viral marketing to push its search engine past Google.

Before I go there, I gotta admit, while I’m a free market kind of guy, I also don’t some companies that absolutely dominate a space (errr…unless I own stock in them at a good buy-in price). 

So when I see Google killing the competition in search, I want to see someone else to temper them (I don’t own stock in Google).

So Yahoo’s latest idea is to have other companies build search engines using Yahoo’s search technology, thereby saving these companies the cash necessary to build from scratch (Yahoo estimate: $300 million).  In return, Yahoo will sell ads on through those search engines.

I think it’s brilliant (barring a few possibly filled holes).  You have other developers customizing, and more importantly, marketing your technology, while you generate money through that method.  What it does is instantly make Yahoo bigger without the time, people and money to do it otherwise.

Classic viral marketing, in another form.

 The possible whole are the kinds of financial deals Yahoo would work the companies.  The NYTimes mentions Me.dium as an example of a partner-company that Yahoo has signed up (financial terms are uncertain).  Me.dium is a search engine (not yet fully released) that allows users to see what other websites their friends are going too.  The theory is that people place more weight on what their friends say than through other means.  This is true, for good or bad (if my friends are looking at ill-informed sites, then those are the ones that will probably pop up first in the search).

Don’t know if this has been talked about a lot before, so here it goes.  There are flaws in the logic so hit me back if there’s a better way to think about this…koe@TechMediums.com.  

What if traditional media companies were able to use predictive models to lower their inherent risk profile?

 The Risk Profile

So, think of media companies (like Disney, EA, Bad Boy) as a series of formal start-up ventures, where the business model requires the constant formation of start-ups (e.g.., new artists, games, movies) to make money. 

However, unlike normal start-ups, each media start-up utilizes common administrative systems like legal, accounting, marketing, etc., and, for the most part, they are more efficient, since this is what they do day-in and day-out.

Some of these businesses already have a library of content (franchises like Madden, or Disney’s Classics) that they milk to lower the risk profile – making the business model more like software – build it once and charge “rents” and/or offer updated versions for a fee.

But unless you have people who consistently pick out winning “ventures” (Diddy, Clive Davis and DJ Drama come to mind), then you’re at a much higher risk.

 Predictive Models

So what if predictive models (PM) could be used to lower the risk profile by refining the kinds of potential audiences, venues, alternative media, (like video games for film or music), price points, additional merchandise that could be sold to fans? 

Predictive models use a series of data (like whether someone buys a product on sale, what day, what kinds of products, etc.) to anticipate future behavior, like other products they would buy or what day they’d buy in on.  It’s a way to drastically improve the click-through rates of customers.  Obviously, the most widely known models are the ones used by Netflix and Amazon.  Insurance companies have been doing this for years, though, in determining likelihood of getting into accidents or dieing.

  Application to Media?

So how can it be applied to media?

Example questions that can be answered:

·        Music –

o       What extras, if any, should be given away with the CDs?

o       Should CDs even be made?

o       Would demand increase by offering the music for free (then charge for concerts and merchandise) or charge for music, lower price for concerts or no change?

o       What kind of merchandise should be sold?

·        Movies –

o       Should advertising be 100% online? 

o       What other product tie-ins could be developed?

o       What products should be licensed?

·        TV –

o       Which shows or episodes should be broadcast on internet only?

o       What other product tie-ins could be developed?

o       What products should be licensed?

Notice that none of these deal with content.  Entertainment is such a different animal.  You can do all the right research – type of movie to produce, the actors and directors to hire, etc, – and still fall flat because the actor didn’t put in his/her best performance, etc., etc. 

Nonetheless, constant research, polling – on and offline, are critical to gaining as much detail as possible.

 While many of these questions have already been answered, to varying degrees of success, PM (like the one developed by Proclivity Systems) seeks to maximize the effectiveness of the marketing, product development, licensing, etc., and lower the risk profile of the business (not necessarily eliminate it).

As reported by the Onion, America’s Finest News Source, consumers can buy back their own home videos from Steve Jobs’ Apple iTunes for only $1.99.   Apple will not edit the videos, save for the Apple logo in the lower right hand corner of the video, which is done so Apple can help prevent piracy of its content.    “Ladies and gentlemen, the future of home-video viewing is now,” Apple CEO Steve Jobs said at  a media event Tuesday morning. “As soon as you record that precious footage of your daughter’s first steps, you’ll be able to buy it right back from iTunes and download it directly to your computer and video iPod.” As typical of Apple, the technology that captures the video directly from the creator’s camera is top secret.  When asked about the technology behind the video capture, Jobs only mentioned that they have proprietary technology that is referred to as NUTs (nano ware, underwear and Tupperware combined). 

One thing’s for sure, ot offers people an easy way to distribute content using the latest technology to a massive amount of people and not make a dime off it…and you’ll have to pay Apple like everyone else.  It’s better than WeMix.com, Global Grind, YouTube, Veoh, StreetCred.com, Funny or Die, iMeem, iFilm, Google video, MySpace, Blip.tv, Metacafe, Yahoo! Video, PodShow, GrindTV, et.al.

Before we get into piracy, a word from McLovin (of SuperBad) on the topic.

Matt Mason, in his book “Pirate’s Dilemma: How Youth Culture is Reinventing Capitalism” discusses a fascinating look into what is very possible a mega trend…piracy in other forms – not just music but everything, how technology is making piracy easier and how, on some level, it should be embraced.

As far as the first two points, sure, there have been bootleg BMWs, watches, software, but Matt’s talking about a world where it’s becoming much easier.

An example, is the 3D printer, which has been talked about for a while (heard about this at about the same time I heard that someone built a PC accessory that could replicate smells over the internet).

As far as it being embraced, I remember an old professor of mine, Pete Fader, a marketing professor at Wharton who’s known for his patented rants, arguing that file sharing was actually good for copyright holders (primarily record labels and their artists). It created buzz. Matt also talks about this in that the demographic who would get pirated material is not the demographic who would actually buy the material. Fader argued that the labels were wrong when saying that they lost $X amount in revenues due to pirated materials. “That’s ridiculous!” Fader said. Just because you can’t get something for free, doesn’t mean you’ll buy it otherwise.

While thinking that copyright laws should be updated, Matt likes the idea of piracy (mentioning that he can’t wait for his book to be pirated).

I actually agree, in concept. I like the idea that new business models need to emerge. That’s why I like open markets. It forces companies, and thus, products, to evolve.

But if I spend a lot of money to make intellectual property, I deserve the right to protect it, regardless of borders.

That notwithstanding, I also think some forms of IP can be seen as marketing materials for a greater thing. Classic example is music. Because of the amount of music put out yearly and the lack of distinguishing characteristics of some tracks to others, music seems more like a commodity. As such, it could be effectively used to market the artist. Artists can let viral marketing take over, bootlegged or not. In fact, in this scenario, you want people to pirate it because it costs you nothing…free marketing to create demand.

The model that I favor is a controlled “open” IP.

Software companies have been doing things like this for a LONG time. Adobe let people get Reader (reads pdf documents) for free to help create demand for Acrobat (to make pdf), for which it charges.

This model might be able to be used consistently for all IP and is a direct link to revenue– that’s why I like it.

Here’s Matt’s video. Enjoy!

Thanks to ProHipHop.com for the video.