AT&T announced this morning together with Starbucks (but not T-Mobile) that they will offer a combination of free and paid Wi-Fi. It comes just a few days after Earthlink announced that they want to sell their Municipal Wi-Fi business.
First, the AT&T/Starbucks announcement is exciting for a lot of reasons. One of the inhibitors to growing subscriptions (besides demand for access outside of the office - but this is growing) has been footprint. Free trials help convert users into paying subscribers. It provides reach/coverage at a time when the market is still maturing - makes economic sense for both parties.
Hollywood writers, if I were you, I'd take the deal. The LA Times has some details on the contract the studios and networks offered to the Writers Guild of America yesterday. The contract would pay a fixed rate of $1,200 per year for one-hour shows streamed over the Internet during the first two years of the new contract. Then 2% residuals kick in. Some shows produced for the Internet would count. The story doesn't say whether DVD rights were re-negotiated, but that probably means they weren't.
Why take the deal? Two reasons:
There's not much money in Internet video yet. It's more valuable for promotion for the next two years. Jupiter estimates it'll be worth less than $2 billion cumulatively, taking in a good portion of video advertising ($1.3B for 2007-2008), some chunk of display advertising, and consumer spending on online video ($400M for 2007-2008).
And this is true:
"The reason for this strike was to make sure we had coverage of the Internet, that it didn't become a guild-free zone, and I think we accomplished that," said Warren Leight, executive producer of "Law & Order: Criminal Intent.
I was on a U.S. carrier's web site today looking up some information on 3G phones. All of a sudden a "chat" box opened up. I thought what fun. I'm searching for this information and now someone is here to help me. The problem was ... they seemed to have NO IDEA what I was talking about.
Our conversation (with the wireless service provider name deleted for privacy)
Thank you for your patience! [Carrier] sales representative will be with you shortly.
You are now chatting with Mary M, [carrier] sales representative.
julie: hi mary
julie: i have a quick question for you
julie: what do you call your 3G network
Mary M: Welcome to [Carrier] online Sales support. I am reading your question and will be right with you.
julie: how do I know if I have a phone or plan connected to your fast network
Mary Beth Kemp and I published a piece today that takes a hard look at the future of advertising agencies. It's what used to be called, in Forrester parlance, a "Big Idea," i.e. concepts not necessarily in practice today, but best practices looking 5 to 10 years out and beyond. (The first Big Idea I wrote was called Reinventing the Marketing Organization.)
Traditional direct marketing has faced a range of hurdles over the last several years from Do Not Call lists, budgets shifting to online, spam complaints, etc. Where’s the latest challenge coming from? It appears to be the green movement. Advocacy groups and consumers are shining the light on the practices of direct mailers and catalogers – and their impact on the environment. Some states are proposing Do Not Mail lists, organizations like the DMA, CatalogChoice, and GreenDimes allow consumers to register to cut back on the catalogs they receive, while the whole subject of Greenness gets brighter.
Whenever the economy takes a down turn, marketers will inevitably ask the question, "How would a recession impact my budget?" This worry is especially true for more experimental forms of marketing, such as certain forms of interactive marketing and social media.
At Forrester in recent weeks, we on the Interactive Marketing team have asked this question too -- of our analysts and a handful of interactive marketers. The results of this analysis -- and our tips for how interactive marketers can protect their budgets and survive (even thrive) in a downturn -- are in a new piece "Strategies For Interactive Marketing In A Recession."
According to documents posted at Time Warner, AOL's ad business looked like this:
Total ad revenues for 2007 - $2.2B, up 18%.
Domestic ad revenues minus revenues shared back to Ad.com partners (ex-TAC) - $1.4B, up 12%.
Total Q4 ad revenues - $620M, up 10%
Q4 ex-TAC revenues - $375M,up 4% year to year and 14% sequentially
It looks like AOL underperformed the US online ad market in 2007 -- Jupiter has 2007 growth across all formats, types, and categories at 21% to $19.97B. It also looks like AOL has at least tuned up -- if not fixed -- its Q3 problems. But that's not a particularly inspiring Q4. I'm typing this up because MSM doesn't seem to be doing so as they write up the earnings call.
A gang of Jups spent some quality time with a gang of MTV Music/Logo execs today. MTV has a perhaps surprisingly solid online story to tell, and one that is rather counterintuitive, coming from a Big (Old?) Media Brand.
It's using its Flux distributed social media platform to build a lot of relatively low-cost mini-sites supporting shows and themes. The uber-brand MTV doesn't even play much of a role herding cats, which is right on-trend. MTV is totally onto the notion of a loosely-connected network in the modern, deconstructed Website world. They call it federated media.
It's also returning a bit to its music roots, something I wouldn't have expected, and aiming to supplant Yahoo Music and MySpace. It's aggressively doing Internet video syndication (watch for a forthcoming JupiterResearch report). It's digitizing, chapterizing, and metadata-ing its archives, with the idea of spreading clips far and wide, on and off sites it controls. (It costs an "insignificant" couple hundred grand to do that to Jackass content with partner Dickhouse Productions. Wow, only big media would call that insignificant.)
Twitter is a next-generation chat room with social network features, individuals can quickly publish from a computer or cell phone, and their network can quickly see, share and respond. It's really pushes content quickly and sometimes, news breaks there before it does elsewhere.
I asked the participants to to 'reply' to a twitter account I created (called "superbowlads") and to say the name of the commercial, and give a rating of up to 5 stars, and to include some qualitative feedback.
Connecting some dots between the juxtaposition of three stories in the Journal today. MySpace is playing "catch-up" to Facebook by building out services that support widgets. Yet Fox Interactive Media, the bulk of which is Myspace and IGN, had $233 million in 2Q revenues, up 87%, while Facebook tallied $150 million for all of 2007. Meanwhile, Fox "generated $250 million in gross revenues" from Super Bowl Sunday.
Would you rather have a mass-reach, advertiser-friendly entertainment vehicle, or a communications-focused social network? Not that either is a bad thing. Nor is having a fixable general-purpose portal.