The other dirty little secret is that no one in the “traditional” media industry wanted to face the fact that the switch from analog to digital was destined to upend their business models. Reed Hastings, like Steve Jobs and Jeff Bezos, understood that superior service, smart packaging and details (the red envelope) breed customer loyalty.
In fact, the dirty little secret of the media industry is that content aggregators, not content creators, have long been the overwhelming source of value creation. Well before Netflix was founded in 1997, cable channels that did little more than aggregate old movies, cartoons, or television shows boasted profit margins many times greater than those of the movie studios that had produced the creative content. It is no coincidence that although, say, 90 percent of the public discourse surrounding Comcast’s recent $30 billion acquisition of NBC Universal involved the Conan O’Brien drama or the shifting fortunes of Universal Pictures, in reality, 82 percent of the new company’s profits come in through the cable channels.
Hulu Expands Original Programming With Sci-Fi & Comedy Shows
Following Netflix’s exclusive distribution deal with David Fincher’s forthcoming House of Cards series, Hulu announced Tuesday that it is expanding its own roster of original programming with three new shows from the UK.Over the course of the summer, Hulu will stream three exclusives on Hulu.com and Hulu Plus in the U.S.: Channel 4 and BBC World ..read more..
USA Network's Covert Affairs Launches Alternative Plotline on Twitter
The USA Network show Covert Affairs has launched a new plotline that takes place in Budapest — but don’t look for it on TV. It’s only happening on Twitter.A “Tweetcast” of the plot began Monday, a week after the show’s second season began. The mission in Hungary was developed by the program’s writers and will include videos, audio stre ..read more..
“It is hard to overemphasize the importance of this business shift from the U.S. middle class to the rich at home and the hundreds of millions graduating into the middle class in the emerging markets. Twentieth-century American capitalism was built on what you might call the Henry Ford model — generously compensated workers (Ford paid double the existing rate) created a mass middle class that bought the products of the country’s entrepreneurs. That virtuous circle made the United States the world’s economic behemoth, and created a society and a political discourse defined by a proudly acquisitive middle class — the United States’ much admired and much maligned consumer culture. But today, for the first time since the Industrial Revolution, that link between keeping up with the Joneses and the rising value of the Dow Jones industrial average may be breaking. Unemployment remains stuck above 9 percent, but since March 2009, when stocks hit their post-crisis bottom, the Dow has risen more than 85 percent.”
the end of the age of the American mass consumer means that entire industries need to be rebooted from the ground up - millennials and Gen X, we have our work cut out for us !
The move to consumers from emerging markets is just part of the story. Within the United States, the advertising agencies on Madison Avenue are discovering that the age of the American mass consumer may be drawing to an end. Instead, a new white paper by Ad Age, the industry’s trade journal, argues that growing income inequality means the only buyers who count are those at the top.
“Simply put, as the discrepancy between the rich and poor has become more and more stark, a small plutocracy of wealthy elites drives a larger and larger share of total consumer spending,” the paper concludes, citing research that shows the top 10 percent of U.S. households account for nearly 50 percent of all consumer spending. “It appears that mass affluence may be a thing of the past — and that luxury marketers should reconsider how their products appeal to elite consumers.”
In most of Western Europe, North America, and Asia, the Internet is old. The personal computer led the way, eventually bringing hypertext and multimedia into our offices and now, a huge range of digital appliances that regularly stream more data than they store locally. The growth of data traffic over the next decade will be led by every user relying on more devices for megabyte-dense content. In most of the rest of the world, the Internet is still quite new. The growth of data traffic in Africa, Latin America, and the Middle East will be led by an expansion in the number of users. But these new users won’t follow the same trajectory as their counterparts in the already-industrial world. Deep-rooted cultural differences and the simple fact that most of these users will be encountering the web on mobile media devices means that the Internet’s map will need to be redrawn in more ways than one. Networking giant Cisco has assembled a forecast of the web’s growth over the next five years that showcases some startling numbers: By 2015, there will be nearly 3 billion Internet users. That’s more than 40 percent of the world’s projected population. Annual global IP traffic will reach approximately one zettabyte threshold (966 exabytes) by the end of 2015. As The Atlantic’s Nicholas Jackson notes, a “zettabyte is equal to 1,000,000,000,000,000,000,000 bytes, or the same amount of digital data that was on the entire Internet in 2010.” Some of that will come from data-hungry households: 6 million will generate over a terabyte per month in Internet traffic, up from just a few hundred thousand in 2010. Cisco calls this group, concentrated in the United States, Japan, and Western Europe, “the terabyte club.” Currently, there are roughly as many networked devices as there are people on the planet. By 2015, they’ll outnumber us two to one. We’ll also reach the wireless tipping point: Right now, wired devices account for 63% of the Net’s traffic; by 2015, wireless will be in the majority with 54%. Consumer use will tip even more heavily. IP traffic is growing fastest in Latin America- an estimated 50% growth rate between 2010 and 2015— followed closely by the Middle East and Africa. Central and Eastern Europe aren’t far behind. Despite all of this, the overall Internet growth curve, at least in terms of year-over-year percentages, is actually bending downwards a little. Traffic octupled between 2005 and 2010; it will “only” quadruple between 2010 and 2015.
Lately, everyone in advertising has become a “storyteller” specializing in “engaging content.”
This isn’t true, of course. But I understand why everyone’s making the claim: Digital is the hottest thing in advertising; social media is the hottest thing in digital; to make social media work, you need conversation-starting (and sustaining) ..read more..
"It’s interesting to think of what the definition of a TV is," said Comcast’s Strauss. "My kids think an iPad is a TV. People don’t think of TV anymore, they just think of video. For us, in the broader context of what we’re doing, we’re beginning to migrate everything to Internet video."
I, Cringely » Blog Archive » iCloud’s real purpose: kill Windows
Apple’s announcements yesterday about OS X 10.7 pricing (cheap), upgrading (easy), iOS 5, and iCloud storage, syncing, and media service can all be viewed as increasing ease of use, but from the perspective of Apple CEO Steve Jobs they perform an even more vital function — killing Microsoft.
Here is the money line from Jobs yesterday: “We’re ..read more..
An Amazing Visualization Of The U.S. Labor Market Over The Past 150 Years
In 1850 nearly half of Americans worked on a farm. Today that share is less than two percent.
Technological and economic development have led to a massive decrease in farmers and laborers. At the same time the service sector has surged, with vast increases in office jobs.
The following charts from the UC Berkeley Visualization Labs show every occup ..read more..
Like it or not, where Apple goes, everyone else eventually follows. It happened back in the 1980s when Apple introduced the first home computer with a graphical user interface (GUI). Before that, consumers had to use command lines to interact with their computers. But once Apple introduced the GUI, other computer makers soon followed suit.
Soon users will become used to how much easier their lives become with iCloud. All my stuff is everywhere I want it to be, instantly. I download a song from iTunes, and it’s instantly on all my devices. I put down the book I was reading on my iPad at home, get on the subway, open up my iPhone, and presto, the book is not only on my phone, it opens up to the exact place where I stopped reading on the tablet.
Documents, photos, email, contacts, calendars—users will get used to moving fluidly between all of them on different devices
Picture this: You’re in a vibrant conference room in Midtown Manhattan witnessing something seemingly normal: two executive creative directors reviewing campaign work and debating brand attributes, customer aspirations and engagement. What’s extraordinary is the fact that one of the ECDs is a gifted programmer perfectly capable of writing and compiling computer programs at will.
That’s the future of successfully integrating digital capabilities into an agency. Culture and business models, not titles, are what make agencies digital. So while agencies rooted in traditional media eagerly add positions like “creative technologist” to their ranks, digitally confident agencies are doing the exact opposite. What’s ironic is the scramble to add phantom job distinctions is happening at a time when technology and creative should be tied closer than ever.
What Rotten Tomatoes data tell us about the best, worst, and most bizarre Hollywood trajectories.
When M. Night Shyamalan’s The Last Airbender came out in July 2010, critics competed to see who could muster the most scorn. Shyamalan’s seventh film was “dull, boring, poorly acted, limply written, and thoroughly unappealing” (San Francisco Chronicle), and “[s]tiff, fuzzy-looking, cloddish and disastrous in nearly every way” (Detroit News). In the ..read more..
E3: 'Defiance' TV Show, Online Game Unveiled Next Week (Exclusive)
Three years ago, online game publisher Trion Worlds partnered with Syfy to develop the world’s first massively multiplayer online (MMO) game and scripted live action television series. The science fiction MMO action game from this collaboration, Defiance, will make its cross-platform debut at E3 2011 in Los Angeles next week. The open world shooter ..read more..
Harvey Weinstein: VOD, Internet Still Need Time to Mature
The DVD revenue from movies is down and the money to be made from new media is not yet making up the difference, which has increased the importance of the initial release of a film, producer and executive Harvey Weinstein said Saturday at the Produced By Conference. “It’s become much more of a theatrical business because the movie has to work in ..read more..
By Instaprint creates printed photos from Instagram images tied to a specific location.
You can always tell the good parties from the bad ones based on the number of photos taken. These days, though, the only way to look back at last night’s good time is to sit yourself in front of a computer and flip through the digital snapshots your friends upl ..read more..
Editor’s note: It’s January, 2013. Where did the tech boom of 2011 and 2012 lead? These events haven’t happened — but they very well might.Let’s just dub this the month of the Facebook Face-Plant. After every man, woman, child, and Shar-Pei joined the social network, member growth stagnated for the first time in the company’s history. An ..read more..
Now come the months where they — hopefully — pay the bills with explosions, superheroes, $3 3D glasses and $6 popcorn.
What it’s really about, though, is paralyzing fear — fear of anything new lest it fail and cost the studio hundreds of millions, fear of deviating from what made money last year or even 10 years ago, fear that creates a “blockbus ..read more..
“In the next 10 to 20 years, almost all video will become click-and-watch Internet video and consumers will interact with it on a wider range of devices and it will able be on demand,” he predicted. “You will not tune into a certain channel this is broadcasting — and that is the radical change. It will be an on-demand world.”
“Today on the iPad, you install various apps and in two years Samsung televisions will be like that. You can already see bits of that future,” he added. In five years Hastings believes that all televisions sold globally will have a built-in Wi-Fi connection and the television will also be an Internet access device. In this brave new world, Hastings says Netflix is one of the subscription sources for television shows and movies.
But just as more and more American consumers are joining the streaming-video party, and using more bandwidth because of that, their internet service providers – many of which, by no coincidence, also run large cable TV operations — are getting set to cap the fun.
With companies like Netflix and Hulu threatening their subscription-cable business, companies including AT&T, Comcast and Charter no longer want to aid the competition by offering consumers all-you-can-eat broaband.
The message: Think twice before you cut that cord, America.
This month, AT&T joined competing ISPs Comcast and Charter in putting a limit on the amount of data its customers can use each month. After its customers pipe 150 gigabytes of data through their modems — 250 gigabytes for subscribers to its UVerse cable service — AT&T will start charging them for each extra byte.
Comcast is a little more harsh. Instead of charging a fee for exceeding limits, the company — which now owns NBC Universal, in addition to its own cable system — kicks off from its network customers who go over the 250 gigabyte limit more than twice in six months.
The real point of the caps, analysts say, is to prevent people from ditching expensive cable service the way many have gotten rid of their wired telephone lines.
"Given the way in which internet service providers across the country have tried to structure their data caps, they’ve done so in a way that threatens not just Netflix, but all types of independent online video distribution," Joel Kelsey, a political adviser to Free Press, a national nonprofit that works exclusively with media and technology policy, told TheWrap.
60% of Generation Y Leaning Toward Cutting the Cord
A survey released today aims to show cable providers how they can keep losing their influential viewers from cutting the cable. Ideas and Solutions, a Los Angeles-based consultant group for media and technology companies, says that 60% of people between the ages of 18 and 29 were either leaning towards or seriously considering giving up paid televis ..read more..