Post #9 – We need to reinvent media or the future will be a growing pile of crap.

We wished for a 500+ channel world and we got it, which has led to the popular saying, “500 channels and nothing to watch”. We wanted “always-on”, updated Internet news and got it – along with declining newspapers and Twitter news. And so forth.

The decks are stacked against high quality content in multiple ways that need to be addressed as we reinvent media. Television needs the most work. When a car advertiser buys the cherished 25-54 year old demographic, they’re getting people who will never make a purchase decision, along with those who will buy one someday and a few who will buy tomorrow. There’s a lot of waste – which is one reason there are a lot of commercials.

The onerous commercial load on ad-supported television by itself is enough to turn high quality programming into a low quality experience. Who wants to sit through 9 ads? Not the people with DVRs for one.

So fixing TV – which requires the cooperation of all the parties – is a priority for a quality future. Internet companies have made some targeting progress, but really, who cares? Banners are the direct mail equivalent and will never be a big driver of the economic support needed.

And, judging by my own viewing, no one outside of Hulu has addressed commercial issues for online video. Most sites make you sit through the same 30 second spot over and over as a preroll. Hulu does a good job with its commercials.

As I’ve referenced in earlier posts, turning most video into individual streams is the key to carving up commercial breaks to produce the most revenue from the least possible number of ads. And that’s going to require a lot of reinvention.

Post #8 – Most audience numbers for ad-supported sites are BS

Most of the audience numbers you read about for ad-supported sites are vastly overstated. Here’s why.

Let’s say a site says it has 1 million monthly users. That means, of course, that a million people are estimated as having gone to the site at least once in the month (or the numbers may come off their server records).

However, not all visitors are created equal. In fact, generally on the best sites, only 20-30% of the users do 80-90% of the viewing, whether measured by time spent or by number of pages viewed per visit. So only 2-300,000 viewers of the million are “real”.

The other 70-80% do very little of the viewing and a lot of them visit only once, probably through a search engine, and didn’t even really know what site they were on. These visitors are almost worthless on an ad-supported site. Why? Because they only see an ad once, an exposure that makes little or no impression.

It’s always been shown in any medium that an ad needs to be seen multiple times before it sinks in and causes action. This theoretical site can really only give advertisers a good return for their money against the frequent visitors.

Some sites have even less core users, with 90% or more in the single page category. There was a major search engine that is no longer a factor that had an amazingly small number of repeat visitors. Almost all of them were one-timers. That profile predicted the demise of the site and it did indeed die.

Another frequent trick is to report “registered users”. These are people who have signed up with a log-on and password. These numbers can be really misleading, since many people sign up for an account and then never use it. Or they have multiple accounts. What you need to know is how many registered users accessed their account at least once in the month.

How many users does Facebook or Twitter really have? Hard to say, but my dog is one of them.

Post #7 – Radio needs to re-up with the automobile.

Post-television radio has always had a fundamental dependency on the automobile and never more so than now, as in-house radios reach a low point. Everything that’s come along has impacted radio listening, starting with the cellphone and cassette tapes, through self-burned CD’s and satellite radio. Now it’s facing a new challenge – the online car.

The tragedy is that my Audi dealer is offering me a car that comes with Pandora and not an interactive version of WBZ (our local news and information station) or KISS (our leading rock station). As built-in cellular connections and USB connectors become more and more common in cars at all price levels, things will only get worse for radio if it doesn’t do something about it.

Radio needs to marry itself to the car again – and mobile phones as well. Stations which still have strong brands, particularly news and information stations, should be integrating with music providers like Pandora and, more importantly, to screens in cars and on phones.

Listeners should be able to listen to their favorite stations and have access to key on-demand elements, such as traffic and weather, which can be displayed or played at the user’s command. The service should be GPS enabled so the most relevant traffic would be shown or played, not to mention relevant advertising.

Radio still has brand and habit cards to play – if it plays them quickly. I would like to think that radio companies with savvy management – like Bob Pittman at Clear Channel, are already working on this.

Interesting story: Pandora Buys a Radio Station

Post #6 – Newspapers may be down, but they don’t have to be out.

Newspapers got in trouble because they didn’t protect their turf. No, I’m not talking about news. I’m talking about want ads, job listings, real estate ads and automative – areas that generated the majority of the profits at newspapers.

They didn’t do such a great a job protecting their news either. It shouldn’t have taken them so long to understand that the Internet was a continuous medium, not a once-a-day one. But that’s not really the heart of the problem, which was the decline of all those things that financed the news.

The good news is that it’s not too late for existing papers with a strong brand presence in their markets. The bad news is that it’s very late in the game, immediate action is necessary and the outcome is not certain.

The surviving newspapers still have an incredibly powerful local brand. It doesn’t matter whether people even still subscribe. They know the name. Newspapers need to use this residual brand power to get themselves back in the commerce game.

There are many ways they could leverage their local presence and brand. One that comes easily to mind is a local merchants and services marketplace. If the Boston Globe (my local paper) advertised that any merchant could have a free account and storefront, who wouldn’t take them up on it? The power of the brand is such that every store, every service business and anyone with anything to sell is going to take advantage. Who would dare take the chance of not being there, particularly when the price was zero?

Obviously the payoff comes in two ways. One is to sell upgrades from the free service and the other is to offer 100% local search as the ONLY way to access this extensive local database. And of course sell search ads around the search.

This is just one example. Newspapers need to look at all the markets they lost and see how their brand and local presence can get them back in the game.

Post #5 – Aareo: Is it time for Broadcasters to stop broadcasting?

Aareo’s success in the courts has rattled broadcasters, who have vowed to fight on. The question is, should they bother? According to the FCC last year, less than 10% of broadcast viewers do it over-the-air. The rest do their viewing over cable, for which the cable companies are paying broadcasters something less than $2 billion in retransmission fees.

To step back a second, Aareo is a start-up from Barry Diller’s IAC that uses many tiny antennas to offer people local broadcast stations streamed over the Internet. But viewers can also get those stations for free by buying cheap digital antennas and, for older TVs, converter boxes. As noted, relatively few have done so.

The networks think Aareo could undermine their ability to negotiate retransmission fees. The cable companies believe the combination of Aareo and Netflix/Hulu could increase their cancellations by cord cutters.

Perhaps the networks should rethink their strategy. If they moved their programming exclusively to cable, most notably the local news, that content wouldn’t be available to Aareo or via over-the-air channels. It would become even more valuable to the cable companies. Broadcasters would lose less then 10% of their audience, some of whom would likely switch their cable back on. The cable MSOs should be eager to convince the broadcasters to become less broad. For NBC, it’s an in-house decision.

At some point, they all might even be tempted to give up the expense of maintaining transmitters and turn their licenses in to the FCC.