03.09

DAVE MARTIN'S WEEKLY FAST FIVE #39

By Dave Martin, SVP, Media

DAVE MARTIN'S WEEKLY FAST FIVE #39

Below is a recap of the five advertising/media stories that I found to be the most interesting/important/informative for the week of March 5, along with a brief POV on each.

STORY 1
NETFLIX GETTING GREEDY
Why it matters: Whether you love or hate Netflix for your own reasons, even without Starz they continue to lead the way in streaming TV and movies into U.S. living rooms. And their ongoing battle with the likes of HBO, Apple and Amazon could be greatly impacted if any of the larger cable companies decides to bring Netflix on board.
POV: Comcast is the first cable network to shut this idea down completely. And with good reason. Comcast has been spending a lot of time and money developing their own streaming business specifically to compete with Netflix and to mitigate the problem of cable cutting. Netflix is really trying to become more like HBO by offering original programming in addition to a suite of movies and TV shows on demand. But since Netflix doesn’t have any plans to shut down their independent streaming service, it makes no sense for Comcast to help them grow their footprint and brand. But just because Comcast said no doesn’t mean that a smaller network couldn’t say yes. Partnering with Netflix could mean a plug-and-play on-demand solution that many smaller networks can’t offer today. Watch for some very interesting partnerships between Netflix and non-internet-based content providers in the coming months.

STORY 2
IT’S OFFICIAL, VEVO IS THE NEW MTV
Why it matters: In case you haven’t noticed, VEVO is doing a lot of things right. The first and most important was to get the music video business back under control.  Prior to VEVO, billions of views of music videos were going un-monetized. This latest partnership with Xbox is just another great way of making popular content available to an even bigger audience.
POV: This is a powerful partnership. Xbox continues to lead the way in distribution of HD content and they are a perfect solution for VEVO, which is trying to pull itself out of the Google/YouTube rev-sharing ghetto (in more ways than one). There is no question that a market exists for music videos, and VEVO is taking advantage of pent up demand by filling the gap MTV left behind so many years ago and delivering the videos we want straight to our TVs. Look for Xbox to continue to launch more apps and partnerships that only increase the value of their monthly subscription service.
 
STORY 3
100MM SMARTPHONE OWNERS PREDICTED BY 2013
Why it matters: This adoption curve is steep and getting steeper. And whether you like it or not, smartphones are changing your life and the world around you at every turn. Our phones know where we are, they can speak our languages, they keep our lives in order, they entertain us… and they collect data. Lots and lots of data.
 
POV: Last year experts were predicting we’d be at 50% smartphone penetration by the fall of 2012. As of March 1 we are at around 46%. With a new iPhone likely coming out in late Q2, and a new Android phone coming out pretty much every week, we are going to shoot past the 50% mark a lot earlier than anyone planned. And with the mass adoption of this technology, the opportunity for marketers to narrowcast their advertising through mobile data is exploding. A big question will be where and how we draw the line between targeted/relevant ads and consumer privacy.
 
STORY 4
PANDORA PARTNERS WITH DIRECTV
Why it matters: People love music. In fact, we’re in the middle of a musical revolution where music discovery, consumption and sharing are easier than ever. But in the midst of it all, record labels and music radio stations are going out of business left and right. Pandora now has a bigger footprint in most cities than the biggest local radio stations and they continue to expand.
 
POV: DirecTV is in a battle against the cable companies for users and subscription revenue.  And they have a lot to offer. By partnering with Pandora, they are taking another big step in their attempt to differentiate themselves from other providers. But this deal is much better for Pandora than it is for DirecTV. In spite of rumored trouble monetizing their mobile traffic, Pandora continues to grow its footprint and build out compelling options for advertisers who need big reach with high-quality ads. Look for other music providers to try and follow Pandora in their pursuit of similar partnerships.
 
STORY 5
TEENS AREN’T DONE WITH TV
Why it matters: There’s been a lot of speculation that TV viewership is on the decline. In fact, the opposite is true. Just about every demographic group is actually watching more TV than ever, including the earliest of the early adopters, teens.
 
POV: The issue around consumption isn’t really about time spent watching TV. It’s about time spent seeing ads. TV is a medium that for the most part is ad-supported, and if you’re watching 2.5% more TV, but 5% fewer ads on TV, it is very bad news for content creators, distributors and large TV advertisers. With consumption of TV content migrating off TV and onto other devices, companies that rely on ad revenue will need to get creative.
 
WEEKLY BONUS: TWEET A THOUGHT BEER

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