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Report: User content a boon, not threat, for old media January 5, 2007

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While traditional media companies are well-positioned to add user-generated content to their lineups, they’re unlikely to generate much cash this year from video, blogs and other such offerings, according to report from Deloitte’s Technology, Media and Telecommunications Industry group.

User-generated content good for old media, report says > Traditional media companies are ideally placed to benefit from the explosion of user-generated content and should see it as an opportunity and not a threat even though the potential revenue is limited, a report says. The phenomenon of consumers contributing their own photographs, video and blogs took the media industry by storm in 2006 through Web sites such as YouTube and according to a report by consultancy Deloitte on media trends for 2007, that is unlikely to change.

The trend prompted headlines that the traditional media was losing sway with the consumer but Howard Davies, a director of media strategy at Deloitte, said print and TV had been wise to stand back and see how the practice developed.

“(They) are very well positioned to adopt some of the technology and some of the emerging social practice … but incorporating it alongside traditional media channels to create an overall richer product,” he told Reuters.

Davies said user-generated content could be split into two categories with one for people looking for “five minutes of fame” via the likes of YouTube and MySpace and the other for people looking to contribute to a discussion or community.

“The one group that has made the most hype is the so-called ‘five minutes of fame’ and I’m not necessarily convinced that that will continue to grow,” Davies said.

“In fact you might find people start to get bored with it (but) the less glamorous use of the Internet as a form of creating user generated content is part of society now.”

News channels including the British Broadcasting Corp. and BSkyB have shown user-generated content including footage taken on mobile phones from events such as the 2005 London bombings. Web search leader Google last year agreed to acquire YouTube for $1.65 billion in stock.

Davies also cited “Runner’s World” magazine which has created forums for group discussions as a success story and said broadcasters could use the medium to gain feedback on programmes or create a buzz before they were launched. However the report by Deloitte’s Technology, Media and Telecommunications Industry group said the potential for generating revenue was likely to be limited.

“There’s something about the social user … community that is absolutely not professional and so the community doesn’t want it to be commercialised,” he said about advertising around Web sites dedicated to the content.

“It’s so easy to set up a rival offering and there’s very little loyalty to these sites and you can move to another one fairly easily and if you want to avoid adverts then you will.”

Looking ahead for 2007, Deloitte said another major topic for media companies would be the desire to “crack” China. Deloitte said China was a challenging market for foreign media companies due to government censorship and restrictions on foreign ownership and said the other major factor to deal with would be piracy.

However head of media research Paul Lee said there was huge potential in China with the Olympic Games to be held in Beijing in 2008, a fast-growing middle class who would be looking to buy genuine goods and a strong desire to see Chinese brands become global.

He said companies needed to be patient and form positive relationships with Chinese business partners and government agencies rather than trying to rush for market penetration.

“The Olympics will force the hand of the Chinese to be more open,” he said in an interview.

“(But companies) need to understand the history and have the patience to grow with China. It’s such a massive beast which cannot change overnight but will change over decades. It may be that the investment you’re making now will be reaped by your successors.”

The full Deloitte report on media predictions will be released later in January.


Forecast > Google, Web major figures in 2007 media III January 5, 2007

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Talent pools. Hollywood talent agencies continue to consolidate. Indie-oriented United Talent Agency, home to Johnny Depp and other stars, sells out to little-known Connecticut investment banker Suhail Rizvi, who owns half of International Creative Management.

Head UTA agents Jeremy Zimmer and Jim Berkus smile all the way to the bank, while Rizvi sets his sights on destabilizing monolithic Creative Artists Agency.

Hollywood crunch. As DVD sales decline for the first time ever, studios step up their crackdown on costs, putting the squeeze on talent, shuttering production deals, cutting jobs and finding other ways to rein in spiraling production and marketing budgets.

Some big stars follow Tom Cruise’s lead by setting up joint production ventures with investors, bypassing the traditional studio financing system.

Studios increasingly rely on outside financial partners, although many of them flee after being burned by big-budget flops in 2006. Studios accelerate the next-generation, high-definition DVD format to keep their cash cow alive and take advantage of banner sales of flat-panel TVs.

Strike out. Bracing for a strike, studios and networks stock up on reality TV shows this spring, angering leaders of the Writers Guild of America, West.

Although they are eager to share the spoils of digital content distribution, the writers lie low when their contract expires Nov. 1, choosing instead to align with the Screen Actors Guild, whose contract expires in 2008.

The studios cut deals with both unions to avert twin strikes, but thousands of production employees are out of work for months in 2008 because the studios stockpiled TV shows and movies.

Of sequels and pixels. A flood does not a glut make, at least when it comes to animated feature films. Although 13 are scheduled for release this year, following 16 in 2006, audiences still turn out, especially for DreamWorks Animation’s “Shrek 3,” Pixar Animation Studios’ “Ratatouille” and 20th Century Fox’s “The Simpsons Movie.”

The big summer surprise at the box office? “Fantastic Four: Rise of the Silver Surfer” leaves Spidey, Shrek, Captain Jack and Harry Potter in the dust.

Parsons for mayor. Time Warner Chairman Richard D. Parsons, eyeing a bid for mayor of New York, conducts preliminary polling, scoring well on name recognition, fiscal acumen and leadership skills. But Gotham voters tell pollsters that Parsons is “not rich enough” to be mayor. He retires to his Italian wine villa.

Spring training. New York Yankees owner George Steinbrenner trades places with Sumner Redstone. The Yankees justify the move by saying that after six seasons without a World Series victory, they need a take-charge leader who isn’t afraid to stand up to his front office.

Viacom promises Wall Street that Steinbrenner will bring a “human touch” needed to coddle fragile egos in the entertainment business.

Redstone’s daughter Shari is offered a job in Tampa, Fla., running the Yankees’ farm system, with a promise from her father that “if she wants it badly enough,” one day she might be called up to the big leagues.

Forecast > Google, Web major figures in 2007 media II January 5, 2007

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Three strikes for Stringer. Sony Corp. returns to Japanese management when Chief Executive Howard Stringer retires after a series of high-profile embarrassments.

After going to the mat to lead a buyout of Metro-Goldwyn-Mayer, Sony last year was dropped by the legendary studio as its primary film distributor, its prize in the deal, because of a loophole in the $4.9-billion acquisition agreement.

Then, Sony’s second-quarter profit was decimated when almost every major laptop computer maker recalled the company’s lithium ion batteries because of safety concerns.

Sony’s PlayStation 3, designed as a Trojan horse to establish its Blu-ray high-definition DVD format as leader, became so difficult to manufacture that the game box was seriously delayed and then trounced in holiday sales by the niftier Nintendo Wii.

Staggs for president. Walt Disney Chief Executive Robert Iger is in no hurry to name a president, but the board’s incoming chairman makes succession an issue.

Iger bypasses the higher-profile hotshot Anne Sweeney, who oversees the Disney Channel and ABC, in favor of Chief Financial Officer Tom Staggs, who is well liked on Wall Street.

AT&T savors the Dish. After buying BellSouth Corp., AT&T Inc. pursues EchoStar Communications Corp., owner of the Dish Network satellite TV service. The acquisition would give AT&T a national TV brand overnight, relieving the phone giant of pressure to build its own.

But AT&T Chairman Edward E. Whitacre Jr. has a short window of opportunity: Cable mogul John Malone wants Dish too.

For Malone, deja vu. Malone gets the chance to become a major shareholder of AT&T a second time (the first was in the 1990s, when he sold his cable company to the phone giant). He sells DirecTV to AT&T for stock, but only after combining the satellite leader with Dish.

What does he tell regulators who nixed the Dish-DirecTV combo in 2002? That without a deal, neither could withstand new competition from phone behemoths such as AT&T.

Big Media scores again. The Republican-controlled Federal Communications Commission narrowly votes to loosen media ownership restrictions, making media companies happy but angering the new Democratic majority in Congress, which tries to fight back with legislation.

TV station values jump as the rules allow companies with newspapers to own broadcasters in the same city. But the changes are too late for Tribune, which had snapped up newspapers including The Times expecting restrictions to melt away sooner.

Murdoch lands the Journal. News Corp. adds to its stable of newspapers by buying Dow Jones & Co., owner of the Wall Street Journal, to bolster Rupert Murdoch’s nascent business news cable channel, a companion to his Fox News juggernaut.

Some investors are furious that Murdoch would spend $5 billion on an old-line media acquisition when a purchase of CNet Networks Inc. could fill a similar need for a fraction of the price.

A MySpace for kids. Walt Disney Co. launches a social networking site for children, hoping that tykes take to it as teens did to MySpace. But like its ToonTown multi-player game for kids, the initiative gets little traction. Toddlers drawn to Disney characters such as Winnie and Mickey do not spend their days at the keyboard.

Forecast > Google, Web major figures in 2007 media I January 5, 2007

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The Los Angeles Times makes its 2007 predictions concerning media, both old and new. “There may be one constant in the media sector in 2007: its obsession with Google Inc. and the Web,” the Times writes.

Putting more on the line online > In ’07, old media will go to greater lengths to assuage Web envy, our reporters predict. Suits and strategies will shift.

There may be one constant in the media sector in 2007: its obsession with Google Inc. and the Web.

Internet envy had old media working overtime in 2006. Viacom Inc. Chairman Sumner Redstone became so overwrought after losing the MySpace social networking site to News Corp. that he served up his well-regarded lieutenant of 20 years, Tom Freston, as a scapegoat. Freston was sacked.

The scramble to keep up with the new medium, along with the threat of a Hollywood writers strike, the possible retirement of a handful of industry bosses and some high-profile mergers, will make for an exciting, if unpredictable, 2007 in the media, entertainment and technology businesses. That uncertainty won’t stop us from making our annual predictions, based on interviews with analysts, investors and executives, along with some educated guesswork.

The Eye meets the brain. Talks among the major TV networks about building a video-sharing service to rival Google’s YouTube break down when CBS Inc. splits from the pack and signs a three-year partnership with Google. The search giant gains access to the broadcaster’s vast video library and some of its radio advertising inventory. CBS gets close to $1 billion in revenue guarantees, propelling its stock in the short run.

Can you hear Jobs now? Apple Computer Inc. unveils an iPod cellphone that is anything but the bride of “FrankenPhone,” the name given its first attempt to put the iTunes music service on Motorola’s clunky Rokr phone.

Apple tries something radical for the U.S. cellular market, selling the phone without a service plan and promoting it as a sexy fashion accessory. ITunes gets a bump as youths and adults listen to even more music on the go.

But will Apple co-founder and Chief Executive Steve Jobs deflect an options backdating probe and be around to take the bow?

Zucker saddles a peacock. NBC Universal Chairman Bob Wright retires early this year, handing the reins to Jeff Zucker, his second in command. But objects in Zucker’s rearview mirror may be closer than they appear.

Although steadfast in his support of Zucker, Jeffrey Immelt, chairman of NBC Universal parent General Electric Co., conducted a stealth headhunting expedition for Wright’s replacement last year. It was inconclusive, but Immelt clearly has a Plan B.

In December, he dispatched veteran GE executive Michael Pilot to be NBC Universal’s head of advertising sales, telling Wall Street that his pick was the “single best guy” at GE to fill the slot. “Mike now is in NBC to make it work,” he said.

The Chandlers’ comeback. Tribune Co. is bought by the Los Angeles newspaper dynasty that is its largest shareholder, which is intent on avoiding a huge tax bill had the company, owner of the Los Angeles Times, the Chicago Cubs, KTLA-TV Channel 5 and many other properties, been sold off piecemeal.

It’s hardly the result anticipated when, in mid-2006, the family began agitating for management to spin off its broadcasting arm to lift the wilting stock price.

Yahoo goes hitching. With its stock drooping, the Internet portal decides that it can’t keep pace with Google without nuptials. Potential partners are plentiful: Time Warner Inc.’s AOL , Microsoft Corp.’s MSN, EBay Inc. and a handful of older media giants eager to bet on Internet content.

Yahoo Chief Executive Terry Semel retires after seeing the merger through. He’s succeeded by his No. 2, Sue Decker, unless the partner is EBay, whose CEO, Meg Whitman, would get the job.

Google steps up marketing, but keeps the soft-sell January 5, 2007

Posted by grhomeboy in Google, Marketing.
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As Google evolves from a search engine into a full-fledged portal, the Web giant is stepping up its promotion of its growing array of content and services. But don’t expect banner ads or TV spots, Google says it plans to stay with the famously uncluttered style of its home page.

Google Steps Up Self Promotion > Google Inc. may finally have learned how to promote itself without compromising its principles. Like its own legions of advertisers, it is marketing its products on Google.com.

The Mountain View, Calif., company shook up the advertising world, and made a very good living, by selling subtle text advertisements designed to give advertisers leads without irritating consumers. In a similar vein, it has shunned flashy marketing for its own products and services. Unlike rivals such as Yahoo Inc. and IAC/InteractiveCorp.’s Ask.com unit, Google doesn’t use banner ads or buy expensive television spots that might boost brand awareness and site traffic. And it maintains a famously austere homepage, displaying a simple set of links to search services, including those for the Web, images, video, news and maps. There are a few others available, if you click on “more.”

The minimalist marketing strategy has provoked periodic whistles of disapproval from investors and industry watchers concerned that many of Google’s newer products, Finance, Real Estate, Answers, have been floundering because people don’t know about them. They worry that feeble self-promotion could keep Google from maintaining its torrid growth rate and make its big investments in cool new products a waste of time and money.

Yet, slowly but surely, Google has been finding its own true-to-character techniques for pitching its expanding array of wares. Recently, it appears to be using its own immensely popular search site to invite users to try another product, typically in a way that is couched more as a helpful hint than a salesman’s pitch.

“They’re starting to promote all these other products” that were created or acquired during the last couple of years, says LeeAnn Prescott, an analyst at Hitwise.

The slow change underscores the tension between Google’s simpler past as a search engine, epitomized by the clean homepage that won over millions of users, and its more complicated, portal-like future. The crisp look can’t be shed without peril, but a menu of services requires a little clutter. “Nobody’s going to find these new tools unless they do something to promote them,” Ms. Prescott says.

Recently, the company has run sizable promotions for its browser-toolbar download in a box at the top right corner of its homepage. It has also recently encouraged homepage visitors to download the latest version of the nonprofit Mozilla Foundation’s Firefox Web browser, a growing rival to Microsoft Corp.’s Internet Explorer browser that uses Google as its default search engine.

Google has long promoted the toolbar, and other products, on its homepage. But the recent plugs have been closer in style to banner ads, being at the top and employing graphics, than the low-key one-liners under the search box that Google has used before. Heralding the new year, for instance, Google last Friday was running a plug that said, “Get disorganized in 2007. Use Google Desktop to find your files.”

Both the toolbar and the relationship with Firefox aid Google’s search-query market share because they make using Google more convenient, no visit to Google.com is necessary, and can cement user loyalty. More pitches of this sort can be expected, but Google may be unwilling to use the power of its sleek homepage much more aggressively.

“We are committed to the clean, uncluttered user interface of the Google homepage. From time to time we promote products on the Google homepage in order to help people continue to find and access information that’s important to them,” a Google spokeswoman said. She declined to say how effective these product plugs are, but said Google constantly makes “adjustments” to Google.com pages to help users find information and to test new designs and user interfaces.

But it appears that even small changes can have a big impact. According to research from Hitwise, traffic to Google’s Blog Search service more than doubled over a two-week period in October after Google put a simple link to the service on its Google News homepage. About 60% of its blog search traffic has come directly from Google News since then, compared with 1% before the change, Hitwise says.

“What they’re doing is very subtle,” Ms. Prescott says. And it’s “effective, clearly, but it’s almost like they do it kind of late,” pointing out that Google Blog Search was sitting around for a long time before the company began to push it.

Hitwise has tracked how Google’s past in-house promotions have led to surges in use of its services. It noted a jump last winter for Book Search, to the fifth-most-used Google service from the ninth, after Google ran a simple message at the bottom of some search-results pages reading: “Try your search again on Google Book Search.” Google has been more liberal lately in its use of the search-results pages as a marketing tool, and in a number of different ways. Indeed, Google’s own search-results pages could be the company’s best marketing tool.

“The most effective way to promote a product is just showing it to [users] when it’s relevant to what they’re looking for,” said Google Vice President Marissa Mayer in April.

“In terms of driving traffic … that technique actually yields the most users,” compared with links on the homepage or other types of marketing, she said, adding that it is “the best way for us to build up a meaningful awareness of the product.”