Is Web Video on the Crux of Seriously Challenging Cable?

When you’re at home and thinking about watching your favorite TV shows and movies, is your TV remote the only device you grab? For an increasing number of people, computers, internet set-top boxes, and even video game consoles are becoming major players in bringing video entertainment into our lives. Is cable receding into the distance?  Well, not yet, but a raft of news over the last month shows signs that we are at a turning point for “web TV.”

September began with the announcement of an upgraded AppleTV box, which was followed by announcements from other makers of web-based set-top boxes: GoogleTV, Roku and boxee. For an upfront cost between $59 (Roku) and $199 (boxee), US consumers will now have a range of options to hook-up these devices to a flat screen TV and watch content directly from the web. These devices, along with direct, computer-to-TV connections, offer viewers a wider set of cheap, and even free, ways to watch video a la carte and on demand.

The Rise of Netflix through Streaming

Last week brought the demise of a “traditional” video entertainment company when Blockbuster filed for bankruptcy. In stark contrast to Blockbuster’s fall is the rise of its primary competitor, Netflix, whose growth has largely been driven by product and service innovation.  Netflix burst onto the scene by introducing the delivery of rental DVDs via the postal service. More crucial to the discussion here, it also made an early decision to develop the technology, and pay for the licensing rights, to add streaming web video to its business model.  One crucial element to the potential success of the Web TV set-top boxes is the fact that Netflix’s service is offered on each one of them.

In fact, Netflix’s streaming video decision drove the industry forward, with cable providers (e.g. Comcast Fancast) and media companies (e.g. Hulu (owned by News Corp., NBC & Disney) and HBO Go) providing similar “on demand” streaming offerings through the web now as well, using both advertising and subscription models.

If investors are any indication of where the future of video distribution is going, they have put their hat in the ring with Netflix and its model. Netflix stock is now trading at levels 7-8 times higher than it was at the start of 2008, one full year into its “Watch Instantly” service.  Compare this with the major, publicly-traded US cable companies—Time Warner, Comcast, and Cablevision—which have all been treading water (or worse) since the beginning of 2008.

Implications for the Future

A lot remains to be played out in the deals and decisions made by content providers and service providers (new and “traditional”)—not to mention the impacts that may come out of the net neutrality debate. But it is no surprise that US consumers are pleased with finally having variable, a la carte pricing options and the ability to customize the content on their TVs.

As more and more people relax on their couch for “42-inch Web TV,” future opportunities for advertisers looking to build their brand around video content will grow. How will the online world of analytics, diversity, and flexibility leverage itself to offer additional consumer segmentation, targeting, and ad placement alternatives? As web video services grow, how will they provide increasingly innovative interactive ad opportunities? What can companies inside and outside the media category do to utilize the potential of these services to curate content and create more branded content opportunities?

The testing ground for this future is already open.  Hulu has introduced an “Is this ad relevant to you?” check box into the pre-roll and in-show ads on their network.  Start-ups like Tremor Media, Innovid, and ZunaVision, are developing new interactive video ad capabilities for advertisers and content providers. Major brands like Axe, Charmin, and Dominos have already experimented with interactive ads for Dish Network and TiVo, and such offerings could be even more innovative when implemented through web TV.

What do you think the biggest impacts of this growing internet TV trend will be?

The [Woman] Is Your Customer

It’s long been a truism that marketers (and business in general) have overlooked the importance of women, both as individual customers, and as key influencers of family purchase decisions. That importance is continuing to grow, due to a number of social and economic trends.

This was the subject of discussion at NBC Universal’s “Power of the Purse” event I had the chance to attend yesterday, thanks to an invite from Maryam Banikarim, a member of our Brand Leaders Forum. The lineup included a panel of speakers from brands, marketing, academia, and media, as well as Speaker of the House Nancy Pelosi.

NBCU’s Lauren Zalaznick pointed out that the US gender gap in wages is the smallest ever during this recession (or “mancession,” due to its greater impact on male employment), and women will soon outnumber men in the workforce. Ten million more women than men voted in the 2008 elections (70 million vs 60 million). And, according to Zalaznick, 96% of women customers surveyed say that: if I like your product, I will “tell everyone.”

Mark Addicks, CMO of General Mills (and lone male panelist) represented a consumer-goods company that has long focused on women as its prime customers. Recognizing the growing voice of customers in digital networks, and the fragmentation of their media experiences, Addicks proclaimed, “We no longer do ‘marketing’… our job now is engagement.”

Kim Brink, from Cadillac, represented an industry that has long underestimated the importance of women in its purchase decisions. She said the auto industry is just now beginning to realize it needs to not only “market to” women, but to incorporate their perspectives from the beginning of the marketing process, in customer insight gathering and new product innovation.

Echoing the shift in consumer values discussed by John Gerzema at BRITE this year, Brink also raised an important challenge for marketing a luxury brand like Cadillac to women. During the current recession, she said, 60% of women feel guilty buying a luxury product in this economy (vs 40% of men). Allaying that guilt needs to be a major focus of some marketers.

The other major focus discussed was connecting with women (and all customers) in a digital age where media are ubiquitous and there is no longer a predictable sequence of brand message + brand message + brand message = customer purchase. MediaVest’s Donna Speciale, said that marketers increasingly need to be “hyperlocal,” finding the right message at the right place and moment. Tina Brown, founder of the Daily Beast, argued that curation and editors have never been more important in media than current environment (as my friend Steve Rosenbaum argues in his forthcoming book).

On the subject of female leaders, the panelists decried the continuing paltry representation of women at the highest level of corporations (comparing it to the “boys club” that the U.S. Congress was when Pelosi first arrived). But Barnard College President Debora Spar offered a note of encouragement in looking at the education of today’s young women. The impact of Title IX (on college sports) is still being observed, but recent research shows that sports participation in younger girls has a strong impact on their future leadership skills, and that adult women in leadership positions today are much more likely than others to have participated in sports in high school. Great tip for parents.

BY DAVID ROGERS

Photo: Nancy Pelosi and Jeff Zucker, by me.

This post originally posted by David on the DavidRogers.biz blog at: http://www.davidrogers.biz

Encounters in the Global Experience Economy: Matsuhisa Athens

The two blonde hostesses are Greek and well practiced in “Irasshaimase!” I am having a seat at the sushi counter. The sushi chef is Japanese by way of California.

I order an espresso martini. The chef recommends the local sea bass and also the local sea urchin—from Crete, from a special supplier which he personally selected, all natural, without any preservatives, and thus better than the one from Japan. I am asking for both the bass and the urchin as sushi, and also order an eel-and-cucumber roll.

The sushi chef tells me that his daughter just graduated from UC Berkeley. She now lives in LA. He came to Greece two years ago. Not a great time for working at a trendy Japanese restaurant right now. But he says most of the customers are locals, and business is better this year than last.

I am reading excerpts from a new book in German, “Deutschboden.” The section I am reading is about a “Super Kleinstadt,” Oberhavel in Brandenburg, where life still seems local. Where people at the Stammtisch talk about third league soccer and eat Schnitzel and Currywurst.

My main dish tonight is one of those signature “Nobu” dishes: Chilean sea bass with jalapeno sauce. We all know, from the web, that Mr. Matsuhisa grew up in South America where he learned to mix cuisines … I am wondering if this is the endangered species fish for which he got bad press online.

The waitress forgot my water order and when it finally arrives, it is the sushi-chef who comes around the counter to pour me the water. A Japanese way of apologizing, I recognize. He introduces his sous-chef. “Where is he from?”, I ask. “From a special place,” he answers, “Blue Island, Quingdao.” Thus, we converse on Quingdao beer, and Löwenbräu, and Super Dryyyyyyyy.

I am wondering how to finish the meal tonight. Earlier we had talked about how the Japanese drink a lot of coffee. I decide that blueberry and chocolate mochi ice cream may turn out to be a great complement to the espresso martini.

When I exit the restaurant and walk past the bungalows of the resort back to my room, looking up to the trees and the starry night, I feel as if I am in Bali.

BY SCHMITT

This post originally posted by SCHMITT on the MeetSCHMITT blog at: http://meetschmitt.typepad.com

3D Printing: Coming to a Niche Product Near You

One of the most exciting digital technologies that is starting to reinvent established business practices is 3D printing.

A wave of new companies like Freedom of Creation and Bespoke Prosthetics are applying this technology to the custom manufacturing of everything from jewelry, to architectural models, to designer body parts. Firms like HP and Google are investing in hardware and software, respectively.

3D printing’s breakthroughs in pricing and digitization mean that designs which used to take months are now brought to life in hours, and at a fraction of the cost.

Newly affordable machines are poised to invent a whole new class of custom manufacturing, where a niche product need not even be made until the customer has ordered it.

As customer networks seek ever more customized content, services, and even physical products, technologies like 3D printing will impact a broad range of industries.

One of the company’s I feature in my book is Brooklyn’s Makerbot Industries, which is bringing 3D printing to a desktop near you, with models starting at just $1,000.

I was lucky to have Makerbot’s founder, Bre Pettis, speak at the BRITE conference this year. In the video below, you can see Bre talk about putting “the factory on your desktop,” including:

• the most replicated human being in the world
• why open source innovation spurs iterative design
• how “the Makerbot prints love”

If video does not appear, click here to watch it on BRITEconference.com

And if you are near NYC next week…

You can check out the Makerbot, and a lot of other amazing technology and crazy inventive spirit at the Maker Faire, Sept 25-26 at the New York Hall of Science.

BY DAVID ROGERS

This post originally posted by David on the DavidRogers.biz blog at: http://www.davidrogers.biz

Photo of jewelry from Freedom of Creation

Pop Tarts’ Online Fan Base Comes to Life

Welcome back for fall. I hope all readers else got some time off to recharge, as I did.

As summer came to its inevitable close, I was interviewed by Reuters TV about the new Pop Tarts World Store that just opened near Times Square in New York. Customer flocked to the opening of this store for an immersive brand experience, complete with Pop Tarts store design and merchandise, a “Varietizer” to create customized boxes, and singular treats like Pop Tarts sushi (hold the wasabi, please).

With the retail sector still suffering through a sluggish economy, what would lead a company like Kellog’s to launch a flagship store for a brand like Pop Tarts?

Kellog’s actually got the idea for its store from its Facebook page, where a network of over two million customers have “liked” the brand, and wall updates generate dozens to hundreds of responses each.

Pop Tarts’ customers are creating their own online content too, including numerous amateur videos and songs dedicated to the sugary treat. In fact, both the brand’s Facebook page, and its YouTube channel (nearly 2 million views) focus almost exclusively on content created by their customer network – rather than recycling advertisements, pumping out corporate communications, or striving to manufacture a “viral” video by their marketing department.

While there has been much discussion of how brands and organizations can best cultivate “online communities,” the truth is that the most active and energizing communities (whether music fans, political supporters, or business partners) tend to be groups that interact with each other both online and in person.

So it behooves a brand like Pop Tarts, with such a large and passionate following online, to generate opportunities for them to meet and engage with the brand offline too – whether at special events, or retail spaces.

Even in a recession, marketers need to be willing to invest in their brands, especially those with loyal followers that make for a valuable long-term relationship.

Click here to watch the video on Reuters.com

BY DAVID ROGERS

This post originally posted by David on the DavidRogers.biz blog at: http://www.davidrogers.biz