TANSTAFL

Will video iPods eclipse the success of their audio siblings? Will consumers pay for content they can get over the air for free? Will the distribution of digital video content revolutionize a tevision industry that has changed little since The Texaco Star Theater? IMHO, the answer to all those questions is Yes, but it might take us back to those days too...openly sponsored programs, fifteen minute shows/newscasts and more.

How ironic is it that the stodgy old 60 Minutes is out of the gate early with a program sponsored by a single advertiser. It even promoted the fact of fewer commercials and more content as it thanked its sponsor. Certianly not the first to do it, Ford sponsored the season premiere of 24 a few years ago and movies and specials have been presented "without interruption" on broadcast TV thanks to a presenting sponsor. But the fact remains, someone paid for it.

As consumers, we will have to accept the TANSTAFL theory (there ain't no such thing as a free lunch). Someone will always have to pay for what has been considered free content.

But the beauty of delivering that free content on line is that it can be more effective for the publisher and user. If, in exchange for free content, users are willing to register and list their preferences, marketing messages can be delivered to a more targeted audience. The advertiser gets a more effective, efficient and targeted delivery and the user gets a message they are more likely to be interested in.

As cable (basic v. premium) and now radio (terrestrial v. satellite) have demonstrated, consumers are willing to pay for commercial free content.

I'm sure there will be a balance. "Commercial" forms will change, from :30s to :10s or maybe :60s depending on which work best. On line, those commercials will be more interactive and involving.

But consumers and publishers need to remember that advertising has been the lifeblood of free TV, radio and even online content. Without it, someone else will have to pay the bill.

How Desperate are you

... to watch Desperate Housewives? Would you be Lost without Lost?

I guess we'll find out pretty soon. Will the video i-pod have the same impact as the original i-pod? In my opinion, not the same impact, but evenutally an even bigger impact, with ripples spreading farther than a simple 2 inch TV screen.

The original i-pod did not invent music downloads. But it capitalized on a shift in music consumption and made it easy and legal. The compact disc may start to fade away, but digital music is on the rise. In the process, it will continue to impact the radio and music industry.

Listening to a 4 minute song while you drive or work out is one thing. Watching a 60 minute television show on a 2 inch screen is entirely another. But the technology is there, and that will always draw some interest. So maybe it starts with downloading music videos instead of television shows...not a big stretch from the audio version. Then it becomes 10-15 minute video segments created specifically for video i-pod downloads. Or maybe next it is daytime dramas so fans can keep track of the events in Pine Valley as they take the train to work, or wait in the doctor's office, or eat their lunch at McDonalds.

Bottom line, five years ago, few expected people to store thousands of music files on a stylish device that can fit in their pocket. Or that legal on-line music downloads would impact CD sales. Or that an i-pod shuffle would inspire a radio format trying to keep the medium relevant.

So a Lost download today may seem like no big deal, a curiosity, a novelty for techies and early adapters. But five years from now...don't say we didn't see it coming!

I read the Al Ries “Darwin’s Theories applied to Marketing” article on AdAge.com ( http://www.adage.com/news.cms?newsId=46338) and was floored! The answer is so simple it has been right in front of us the whole time!

In short, Mr. Ries looks at Darwin’s theories of evolution and divergence. Evolution, of course, is the gradual course of change to adapt to changes in environment. Divergence, on the other hand, is a splitting from that course to forge a new direction.

Up until I read the article, I thought of the two theories as basically the same – the process of change to ensure survival. But they are completely different… in nature and in the jungle we call marketing.

We read everyday of the new technologies, innovations and media habits that have begun (and continue) to force change. We in the media believe that if we simply continue to “evolve” we will continue to survive. But as dinosaurs and dodo birds have demonstrated, evolving does not ensure survival.

Continuing down the same “evolutionary path”, busy patting ourselves on the back for the “changes” we’ve made, without looking forward (as well to the left and the right) can lead to danger, and perhaps, to extinction. Too many media companies suddenly get to the end of the road and ask “now what?”

Of course we need to evolve, but we must also diverge, and in my opinion, in a bold way. Let’s embrace these new technologies. We should not simply open an evolutionary door and try to fit them into what we’ve always done. We need to analyze the strengths and benefits of these new media and expand what we do to benefit from them. That is divergence! And if we don’t do it, someone else will – they probably already are!

Digital or dinos?

You can't say it any more succinctly "consumers are becoming more and more in control". The digital world means they will continue to control how and when they consume their media.

Of course this requires and major shift in thinking and process. Digital media open up a two way steet where consumers can communicate their preferences back to the marketer.

I believe the privacy issue will lead to a more permission marketing based approach. Consumers (especially early adaptors) will always want information on new products and services that can make their lives better. If we reach out to them with information that is requested by them and relevant to them, we will be much more effective and efficient.

Going digital creates a two way conversation, it will allow our customers to respond to us. If we listen and give them what they want we'll all be moving forward.
Bring it on!

New Music

I was always an LP guy. Every time I liked a song I went out and bought the record (on vinyl). I did own my share of 45s and even a bunch of "cassingles". But I just had to have that one song!

I'd have to drive to the mall, look through the bins for the album I wanted and hope they carried it in stock (no matter how obscure) or didn't sell out (no matter how popular). After I paid I'd have to drive home, not able to listen to my new purchase grumbling to myself "when will they make something I can listen to my records in the car on?"!

And then, because I didn't like every song on the album, I'd make a mixed tape of just my favorite songs. It got expensive and those old LPs were (and still are, I can't throw them out) hard to store.

Today I read that digital music sales revenues have tripled in the first half of 2005 compared to the same period in 2004. While it is only 6% of total record industry sales, it still represents (in my best Dr. Evil voice) 790 million dollars!

So now I can listen to Internet radio, hear a song I like, click on a link to download it, get suggestions on other songs I might like and burn it to a CD or my portable music device. All without leaving my computer!

Nahhh...our business isn't changing!