The Economics of Online Entertainment

make_money_on_computerI’ve been thinking a lot about the economics of online entertainment lately, in part based on a June 15, 2009 LA Times article entitled ‘Hollywood hits the stop button on high-profile Web video efforts.” Despite many failed attempts at monetizing online entertainment content, ranging from DEN, Icebox and in the late 90s to Stage 9 Digital and 60Frames in recent months, I’m not convinced there isn’t a profitable model for making the studio model of the future a reality.

Whatever the successful combination, it is certain to be as complex and dynamic as the changing media landscape itself. It will include both traditional and yet untested advertising and sponsorship models, but it won’t be fully reliant on them either. It will include brave new brand extensions and cross-platform integration and ways to interact with audiences that result in them eagerly spending their hard earned money on e-commerce and subscriptions and engaging with sponsors.

It will also include strategies with no intent of directly driving revenue, but still being accountable to some other practical revenue stream — offline purchases, participation in events, engagement in online communities, etc. Or for large media carriers to support membership/subscription-based services and any myriad of other business objectives.

Making quality online entertainment content is hard, but building an audience for it from scratch is even harder. This reality has been part of what makes it difficult to monetize the emerging category of web video content with any scale. The model that works will include an innovative way for content producers to attract and retain large new audiences in a way that presents clear value for each of the key stakeholders: content creators, distributors  and consumers.

Many more layers of this oninion to be peeled in the weeks ahead I’m sure.

Speaking of identifying good online entertainment content, as a fan of Weeds, I was interested to learn from Tubefilter about University of Andy, a series of short videos in which Andy Botwin (played by Justin Kirk) lectures on various life skills that are not likely to be offered at the local community college, but are guaranteed to make you laugh.


Economic Value of the Ad-Supported Internet

new-iab-logoI’m impressed by how the Interactive Advertising Bureau has stepped up to answer the call for industry self regulation and the creative ways it is demonstrating to Congress and the FTC the importance of online advertising to the U.S. economy. In a a report out today entitled “Economic Value of the Advertising-Supported Internet Ecosystem,” the IAB suggests online advertising is responsible for employing 3.1 million Americans and generating $300 billion, or 2.1 percent of the U.S. GDP.

Coinciding with the release of the report, this week the IAB is hosting a series of meetings and a press conference in Washington, D.C. dubbed the “IAB Long Tail Alliance Fly-In.” The event is intended to put real faces to the individuals and small businesses that benefit from online advertising and comprise a portion of the revenue and jobs cited in the Economic Value report. Some of those faces are represented in this video called “I Am the Long Tail.”

The report and this week’s activities in D.C. are a testament to Randy Rothenberg’s leadership and have created a strong foundation for demonstrating that our industry takes seriously the call for self-regulation. But the rubber will meet the road when the IAB and other trade groups with whom it has partnered publish more formal recommendations about how to allay consumer and regulator concerns surrounding behavioral targeting and consumer privacy protection.


Inspired by Max Gladwell

myspaceavatarWhen Max Gladwell posted his third “10Ways to Change the World Through Social Media” I was only able to send a Tweet about it, since my blog wasn’t up yet. As I rev up my own social media channel, it’s a pleasure to be able to call attention to this post and the unique position Max Gladwell has taken at the nexus of social media and green living. As a perpetual student of online guerrilla marketing, equally impressive to me was the idea of a coordinated, simultaneous multi-blog post and its relationship to the changing media landscape.


Rubicon Project

Inman logged into the VCM Pub UI!I just sent a tweet about my lunch today at The Rubicon Project, but was limited to so few characters that it’s worth a bit longer mention of how impressed I was by the culture, the team and the market they are creating  by finding new ways to create efficiencies in the online advertising industry.

I met Nicole Jordan during ad:tech SF and almost instantly expressed concerns over the potentially competitive nature of Rubicon with ad networks based on an announcement they made at the show regarding automating buying with their new Rubicon onDemand service. After the show, she graciously invited me to the office to get a better understanding of the company, where it sits in the online advertising ecosystem and why competing with ad networks is not in their plans.

Coverage of the announcement by Forbes incorrectly stated Rubicon was opening up its inventory to advertisers. While the story has since been corrected, it was too late. An Adotas article exacerbated the issue and touched off a minor PR crisis for Rubicon and my new pal Nicole.

As she explained to me today, the silver lining was their ability to use the spotlight to clarify more succinctly what they are about. A nice recovery to be sure, but no kind of PR strategy.

I was delighted to meet the team and learn more about their value proposition and will look forward to following Rubicon’s progress in the months ahead.


Yerba Buena Fundraiser

As I tinker with my new blog, I have received the sum total of two comments (both of which I tagged as SPAM), leaving me to wonder if a tree falls in the forest whether it makes a sound? Eventually, I trust someone will read my blog. I know I can at least count on my mom and my social media coach KurtyD.  Until WOTW is ready for prime time, this post is an example of something going on in my life that I would be compelled to share with thousands of followers if I had them.
When my son entered kindergarten, I dove headfirst into the Yerba Buena Elementary School Parent Faculty Association by volunteering to chair its publicity committee. Although the job mainly consists of supplying the local paper with photos of the kids doing interesting things and calendar of events listings for book fairs and the annual Halloween carnival, the 40th Anniversary Festival and Fundraiser next weekend is much more important.
As public education has suffered severe funding cutbacks, I have learned firsthand the increasing pressure being put on parents to pick up the shortfall. In addition to being asked for a $300 booster payment at the beginning of the year, there are countless fundraisers throughout the year and teachers routinely ask for donations for specific items. The pains of public education can be felt everywhere — and we live in a good district! I can’t imagine what issues parents in the poorest parts of Los Angeles and elsewhere must be dealing with.
What I do know, is that Yerba Buena must make up a huge budget shortfall each year to pay for music, sports, computer and education programs. And next weekend we’re hosting an auction fundraiser in conjunction with the school’s 40th anniversary celebration. It’s going to be a great evening full of music, fun and games like Jell-O relay and Hotwheels races, hula hoop competitions and dancing to music from the past four decades. After a live auction we’ll be watching classic cartoons like The Jetsons, Flintstones and Scooby-Doo under the stars. Should be fun!
While all of the festivities are geared for YB families and alumni, a wider swath of our community can help by participating in the online auction, which is now open. Come one come all to our family festival next weekend, but more importantly, please bid on some of these items and pass this information along to anyone you know who would care, especially residents of the Conejo Valley.