Parks Associates Blog

Wednesday, June 06, 2007

New Models for Personalized Media Distribution

A couple of articles from today's Wall Street Journal coincided nicely with a keynote at last month's CONNECTIONS conference from Dan Scheinman at Cisco Systems. I was reviewing the audio recording from his keynote this morning and writing a summary for our CONNECTIONS key takeways. Scheinman made four major points that caught my attention during that keynote:
1. Consumer-driven spending for electronics and services was actually helping to increase the rate of growth of overall IT spending - boosting the market from 5% year-over-year to a projected 10% YOY growth;
2. The old model for technology development and distribution - from universities, to big money banks, enterprises, and service providers has been turned on its heel. Consumers and service providers are now leading in many categories of technology development;
3. Hollywood and the major content providers' tight grip on content and its exclusive nature is slipping, as consumers become more empowered; and
4. Content associated with communities was going to characterize the new media distribution models.

When I checked the Journal at lunch, there were a couple of pieces that fit nicely with these main points. First, there was an interview with Radical Media's Robert Friedman, discussing the emerging trend of "branded entertainment" (basically, video content that is highly ad-oriented and aired outside the traditional realm of TV advertising, usually on cable TV or via the Web). Friedman spoke of the need for more (and higher quality) types of ad-oriented programming in light of the fragmentation of the TV audience, but also consumers' willingness to spend time in more immersive ad experiences, if created in a high-quality format.

Then, Carl Folta, Executive Vice President for Viacom Inc. wrote a scathing letter where he rebutted much of what was written in a previous article about the company in a June 2 WSJ article ("Viacom's Split: A Big Why?"). Folta stresses that Viacom has been among one of the most-active media companies in developing a digital strategy. He writes that Viacom has agreements with partners including iTunes, Yahoo, and Joost. In addition, they have 230 Web sites, with more on the way. He notes that the Viacom Digital is the number one entertainment destination on the Internet, and one of the many reasons why revenues attributed to digital entertainment are expected to double to $500 million in 2007.

So, while some might take issue with Dan Scheinman's point that "Why should consumers search for content; it should seek them out" (click on the link to one of our media attendees' reactions to the keynote), the fragmentation he spoke about and the need for media companies to figure out how to best link customers to their content in much more personal ways definitely does resonate. It's one of the reasons why we argue that the intrepid IPTV start-ups around the world should make their move into embracing more highly-targeted and measurable advertising solutions now, rather than wait for their cable competitors to get a leg up on them. It's also why we continue to be very interested in the whole search/user interface category as an emerging opportunity within digital lifestyle markets.

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