Week of April 28, 2008

Large Internet Broadcasters Need To Pony Up

Friday, May 2, 2008

In a decision yesterday on Internet license fees, the US District Court of New York shocked Internet broadcasters by assessing much larger fees than companies like AOL and Yahoo! had expected. Total fees for the past three years could reach as much as $100 million. Large Internet broadcasters had hoped for less than $1 million each and now face multiples of that.

The real question moving forward is just how much of a financial hit can online music providers take before they question the whole concept of making money via audio content. With royalties and now licenses presenting much higher hurdles than previously expected, there is a real possibility that music on the Internet will see itself significantly curtailed unless side deals can be negotiated.

Adobe Flash The Future Video Standard?

Thursday, May 1, 2008

Adobe Flash is already the de facto video standard on the Internet, and Adobe today made an aggressive move to extend that influence across other distribution points, including mobile and even television. The essence of their announcement is that Flash will now be an open platform, with developers free to create their own Flash players, licensing fees removed for mobile players, publishing open programming interfaces for other devices, and developing a platform for pushing content to devices outside of the device itself.

To give a sense of the importance Adobe is putting on its strategy of making Flash even more ubiquitous than it is, by removing mobile licensing fees Adobe is giving away a chunk of business that earned them over $50 million last year. There are a lot of places Flash can develop and mobile is a key one. With licensing fees removed and barriers of development removed, the true Internet Flash-enabled experience should grow significantly on cell phones.

Google Adwords for TV out of beta

Wednesday, April 30, 2008

While the radio industry has focused much of its attention on Google's radio initiatives, Google has labored on in other traditional media, including print and television. Google has announced that its television program is now out of beta and fully operational.

It is interesting how the various media are handling Google's initiatives. While radio companies have embraced Google's sales of remnant inventory, every major cable operator has declined to participate in Google's Adwords for Television program. In fact, the only major operator taking part is the Dish Network.

Interestingly small competitor Spotrunner already has access to all the major cable companies and is offering much cheaper production costs than Google. Additionally, the major cable companies are creating their own ad network similar to Googles currently called Project Canoe.

Clash of Cultures in Search Advertising

Tuesday, April 29, 2008

According to Advertising Age, an interesting culture clash is brewing in the online advertising world. Large consumer brands are more interested in ever in using search advertising in addition to, or instead of, more traditional advertising methods. However, the medium isn't the only thing new to big players like Proctor & Gamble. Google, unlike traditional agencies and media outlets, doesn't give volume discounts.

In fact, the search model encourages the opposite. The more marketers that bid on a single keyword, the higher the price goes. Speculation is that once the meteoric rise in the growth of search advertising slows, Google and the others may be more interested in looking at locking in the big budgets and giving volume discounts, but don't look for it to happen anytime soon.

AT&T Hits Starbucks

Monday, April 28, 2008

The first Starbucks with new wireless Internet partner AT&T has gone live in San Antonio. The biggest difference is one that we think is a compelling trend moving forward for retail establishments: Free wi-fi. Of course, Starbucks is doing it right--tying access to a Starbucks card. Note that the access is free, and only requires the user to register their free Starbucks card.

Starbucks will thus be able to measure the usage of various consumers with their wi-fi in-store. In the long run this knowledge leads to better targeted offers and partnerships. The exchange, free service for some personal information, is fast becoming the basic transactional cost on the Internet.