On Screen Protectionism?

When devices and apps talk to each other, content owners balk even at the screen format. Or so it seems from the recent pullout of Hulu from Boxee application. The advance of The Great Media Convergence — the content you want, at the time you want, on the device you want — would seem to be inexorable, based on its universal appeal to the consuming audience and the evolution of the enabling technology. But getting past all the entrenched powers is going to be a long struggle, and the early adopters on the front lines will have the wounds to show for it. To see how this disruption is driving the entertainment overlords into defensive positions based on arbitrary distinctions, just look at the current contretemps between Hulu and Boxee.

What happened? Boxee is media center software that makes it easy to watch online content on your television via a connected computer or device like AppleTV. Hulu beams TV directly to your portable computing devices, giving you more of the cerebral-gelatinizing shows you want, any time, anywhere, for free. That, is how Hollywood wants to see online video — as a supplement to "real" TV, not, heaven forbid, as a free living-room alternative to paying for cable or satellite service. To Portable Computing Devices or FROM your TV and not TO your TV. To your dumb-ass laptop, you smelly, hairy, friendless, gamer-freak nerd. (Sorry, I hate to talk about you that way, but that's how they think of the Internet. I think you smell great.) To Your TV is something completely different, and from the content providers' point of view, completely wrong. ... I'd guess Hulu had a deal to show 'content' on computers, and the 'content providers' balked when those computers started talking to their precious televisions.

Of course, media-center computer owners can still watch Hulu's shows on the big screen — they just have to do it through a conventional Web browser instead of Boxee's cleaner interface. It's difficult to see how there's even a claim by the content providers at all. They put the content on Hulu so that anyone watching the content via the Internet on a computer within the geographic restrictions should be fine. Boxee is just an application on a computer. It's functionally identical to watching the content on your computer screen. The only real difference is that the 'screen' is a television instead of a monitor. But the mechanism is identical. It's difficult to see how the content providers can claim any right whatsoever to say that you can watch the content that they purposely put online only on a specific type of screen.

Convergence may indeed be inevitable, but this is just the type of annoying and arbitrary turf protection we'll continue to see until the entertainment industry figures out a way to make the future its friend.

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Does web content aggregation violate copyright laws?

Content aggregation is not entirely risk free.

I am referring to the recent settlement between GateHouse Media, publisher of community newspapers and New York Times Co., parent company of The Boston Globe and Boston.com site. In context is a suit over the appearance of headlines and first paragraphs from GateHouse news publications on Boston.com's new hyper-local sites. In its lawsuit, GateHouse claims that Boston.com is building community-oriented sites that rely on the work of GateHouse reporters thereby violating its copyright and trademark laws by taking Gatehouse's newspaper headlines and lead sentences published on its home pages. GateHouse’s major worry is about the empowerment of Boston Globe’s readers that gain the ability to access GateHouse content while by-passing ads appearing in GateHouse home pages – and the extended fears of consequential loss of its ad revenues.

The settlement envisages GateHouse will set up technical barriers to prevent Boston.com's scraping spiders from automatically scarfing up its headlines and RSS feeds, and Boston.com will honor those barriers.

To me, on a first glance it's the perfect lose-lose solution. Boston.com readers lose an opportunity to be exposed to GateHouse stories, and GateHouse loses the traffic from those external links. And everyone loses if more sites take similar steps to restrict the entry points to their content. May be, the arrangement is not binding on others or it may not even set a legal precedent. But could it not persuade a Judge in another similar case to lean on the direction and terms of this verdict? Have web advertisers got on board without visualizing the extra mileage that linking freedom provides? To rephrase the question – would they have come to GateHouse Media if told that the extra ad mileage is snapped shut because of linking restrictions?

I think it’s time to dust up and endorse Russel Shaw’s (of ZD Net) earlier proposal to pass a “Freedom to Link” Act !

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I want my clear blue sky and unadorned wall back

What had started out as simple TV advertising between programs have become so intrusive that almost every two minutes there is a commercial break. Consumers armed with remote controls zapped away commercials in snarky if not sadistic glee. So what do broadcasters do to ROI insistent advertisers?

They innovate by subtler intrusion. The Times Online reports that the boffins at ITV have come up with a new approach called "automatically placed overlay advertising" using technology from Keystream that can spot large "clear" areas in video content -- an empty blue sky, for instance, or an unadorned wall -- and superimpose a logo or message, embedding it into the programming.

And you thought set-top boxes that allow us to record programs and then jam the commercials mean that we’ll get uncontaminated content! As viewers get cleverer, broadcasters get smarter. Now it’s the turn of the viewers again to invent new ways to get back that clear blue sky and that unadorned wall on the screen ;-)

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Paid content ? Forget it.

Media content hiding behind a paywall as a breed is becoming fast extinct. Most publications have either dismantled their paywalls on their own because of depleting web traffic or competition edged them out by throwing similar content for free. Just as I was mentally speculating the odds of WSJ tearing down its paywall, Scott Karp has a nice post predicting it wouldn’t take too long using NYT example.

I’ve never been gladder. Excerpts -

“The new economics of media make charging for content nearly impossible because there is always someone else producing similar content for free — even if the free content isn’t “as good as” the paid content by some meaningful metric, it doesn’t matter because there’s so much content of at least proximate quality that the paid content provider has virtually no pricing power. As smart, talented, and insightful as the New York Times columnists behind the paid wall are, there are too many other smart, talented, insightful commentators publishing their thoughts on the web for free.

The WSJ.com remains the last great bastion of paid content on the web, and with the News Corp acquisition, the pressure to tear down the walls will likely be too great to resits. Even if it’s true that the WSJ has the highest quality business content bar none, the web is so awash in good, great, and utterly crappy business content, all free, that WSJ is holding onto its paid subscribers through sheer brand strength alone.”

The ability of the web to shrink revenue streams is amazing. It takes a really disruptive, significantly value creating something to get paid.

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Target practice

It seems online ad spend supported by behavioral targeting (BT) works.

“Behavioral targeting” is a strategy in which marketers analyze consumers' online activities to figure out who is most likely to be interested in its product - and then place ads on whatever sites those consumers are visiting. While it helps marketers reach a more engaged audience with fewer ad impressions, publishers monetize their “long tail” pages that otherwise remain unsold or goes cheap (remnant inventory). For users, ads targeted by their actions seem relevant and are often welcomed.

The effectiveness of focused strategies can be gleaned from the rapid pace of deals for Ad-networks. Four deals in 35 days — Google-DoubleClick, Yahoo!-Right Media, WPP Group-24/7 Real Media, Microsoft-aQuantive and now AOL-Tacoda — are a clear indication of the onrush of brand-focused advertisers onto the Web.

Now the question that begs answer is scalability. It involves several factors, including the broad reach among Web sites either thro portals or ad networks, needed to allow fine-tuned segmenting and yet maintain a reasonable size for each slice of the audience. Another element holding back BT growth is the technology itself, which despite its benefits still seems counterintuitive to many advertisers - that they need to pay nearly the same rate for a remnant page as they would for a contextually targeted page placement, goes against the grain.

So far as India is concerned, I would lay my bets on wider user adoption of www. That would leave us enough time to learn from others' mistakes and to develop a suitable strategy based on our market segments and its online behavior. Here's an insightful op-ed piece by Jeremy Liew of Lightspeed Venture Partners I found interesting.

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Economics of the Web and network effect

Does it take years for the success of Search Sovereign Google’s business model to sink in…? That too for savvy gorillas like Microsoft…well the late blooming came with a price.

Microsoft Corp, close on the heels of Google's acquisition of DoubleClick has purchased online advertising company aQuantive, for about $6 billion in cash, and is paying a significant premium to to do so.

The move comes amid a torrent of acquisitions in the advertising industry, now in the midst of profound change. Players are engaged in frantic land-grab, as traditional advertising dwindles and advertisers move online.

Microsoft, like Google, Yahoo and others, has realized economics on the Web are subject to “the network effect”: You have to be the biggest player on the block — the bigger the network of advertisers you have, the better you can serve publishers, the more business you will get.

Reflecting the high stakes at play, Microsoft will pay $66.50 per share for aQuantive, an 85 whopping percent premium to aQuantive’s Thursday price of $35.87. It comes after advertising giant WPP moved yesterday to buy 24/7 Real Media, and Google’s recent purchase of online advertising company DoubleClick, and Yahoo’s announced acquisition of Right Media Inc. for $680 million.

The purchase of AQuantive increases the likelihood that the software maker will also buy Yahoo because AQuantive doesn't give Microsoft additional advertisers it needs to compete against Google, Goldman Sachs Group Inc.

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What’s left now…?

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