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Monetization Dominates Digital Media Conference Discussions

Accenture surveyed executives in the U.S. and Europe to get their take on what it would take for digital advertisers to be effective and successful. The top criteria that emerged were workforce talent, applied business analytics (including the just-announced Google Ad Planner tool), salesforce and channel performance, and investment and business development. Not surprisingly, Google, Microsoft, and Apple consistently placed at the top of respondents’ lists of who they felt were doing digital advertising right.

Wolak closed by saying that more powerful analytical tools and better demographic information is on the way, because younger generations are more open with their data, seeming less concerned with privacy issues than their elders.

Fox Interactive: Give the People What They Don’t Even Know They Want
Ron Berryman, SVP & general manger of Fox Interactive Media’s digital publishing group, gave the opening keynote. Berryman said Fox Interactive properties such as MySpace, Fox Sports, and Photobucket reach 186 million people per month. He also pointed to a recent study that indicated spend 3 hours and 17 minutes online as opposed to just over 2 hours a day a year ago, with TV watching remaining flat year-over-year at around 3 hours and 42 minutes, meaning that TV consumption as a percentage of overall media consumption has decreased.

Berryman focused on the challenges publishers face monetizing their content, focusing mostly on ad-supported approaches. According to Berryman, broadcast video averages 22 spots per hour, with an average CPM of $20, netting 44 cents of revenue per viewer, whereas broadband video averages 5 spots per hour of video, which garner an average CPM of $35, which translates into only 18 cents per viewer. He went on to note that 79% of adult viewers say they’re not willing to pay to watch TV online, and over 70% said that in-stream online video ads were intrusive, and more than 50% said that such ads stopped them from watching the video. But Berryman argued that publishers shouldn’t necessarily base their strategies on what such surveys reveal, quoting Henry Ford’s maxim that if he’d asked people what they wanted, they’d have said "faster horses," not an automobile, and added that Fox Interactive is using a combination of advertising strategies—pre-rolls, mid-rolls, static interstitials (ads that display when the viewer pauses the video), and full-show sponsorships, targeted based upon metadata drawn from the dialog of each particular show. In fact, the overriding message of Berryman’s presentation could be summed up in three words: metadata, metadata, metadata, whether it’s used to more finely target ads or to generate personally tailored search results.

YouTube: Syndication as Platform, Rather Than Content
Philip Inghelbrecht, head of strategic partner development for YouTube/Google, began his keynote by tracing the path of broadcast video distribution from TV-only to availability on the content owner's website only to today, when content is often syndicated on multiple sites. Inghelbrecht drew a distinction between properties like Major League Baseball, which generates a lot of content but syndicates almost none of it, and the NBA, which syndicates a great deal of it, or CBS, which Inghelbrecht joked "puts its video under every rock on the internet." He also added that syndication isn't necessarily the best strategy for every content owner, noting the success of Will Farrell's "The Landlord" video, which he said was the most popular viral video of 2007 but was available only on FunnyorDie.com. "That's the scariest thing to a company like YouTube, that dozens of such small sites will take away viewers," he said. "It would be like a death by a thousand cuts."

So what is YouTube doing? It's syndicating APIs for upload, playback, and community. These APIs, which were released last month, can then be skinned and branded by partners such as Animoto or Slide. Monetization in syndication is promising but also presents challenges, he said, such as potential advertising conflicts, the complex relationships between multiple partners, and measuring success across multiple points of delivery. YouTube's notion of syndication isn't necessarily limited to the web, Inghelbrecht said, adding that YouTube APIs are also targeted at game consoles, camcorders, video editing software, and mobile devices.

Critical Mass for Mobile?
Nic Covey, director of insights for Nielsen Mobile, began the panel "Mobile Entertainment: New Devlopments" by citing Nielsen research that indicated only about 2% of consumers are accessing video on their phone, as opposed to 3% for game and 9% for ringtones. Myk Willis, founder and CEO of Myxer, noted the difficulty of breaking into the mobile ecosystem, which doesn’t have the same openness as the internet, both in terms of the range of devices and the various network and carrier issues. Donna Campbell, director of Ericsson Mobility World, emphasized the importance of a friendly user experience and the need not to surprise consumers with charges for the content they want to access, and suggested that if consumers aren’t satisfied with their first mobile entertainment experience, publishers and device manufacturers risk losing them forever. But even though challenges remain, and those numbers appear low Covey argued that mobile adoption has reached critical mass, and MTV SVP of digital distribution and partner relations Alice Kim asserted that 2009 will finally be the year that mobile content and advertising really takes off, as long as services appeal to both novice and advanced mobile users. Speakers on the investment panel were also bullish on investment in and around the mobile market, though not necessarily specifically mobile video.

Monetizing Digital Music
"Contrary to popular belief, there is a digital future for the music industry, and it is one where artists will be compensated," said moderator Ted Cohen, to open the panel "Digital Evolution of the Music Business." "Music may be delivered for free, it may be underwritten, it may be sponsored by Coca-Cola, but artists will be paid." We’re not there yet, though, said Dave Jaworski of PassAlong Networks, who said that until every major label is willing to sell its music in MP3 format that will play on every device, we’re not in a fully digital music ecosystem. PassAlong offers a service called FreedomMP3 which gives consumers files that play on any device but that are protected from uploading to P2P networks. Just as important, Jaworski said, is "collapsed copyright," where royalties and rights for multiple uses "can be negotiated in a single meeting."

But things are changing. "Labels are finally figuring out that they’re not the stars of the show," said AOL Music VP and editor-in-chief Bill Crandall. "The labels need to realize that people are excited about music, but they’re not going to bring people in on their (the labels’) terms. The labels need to make their stuff far more portable than it is now."

Cohen put forth the importance of making discovery a simple and inspiring process. "We think it’s a all about capturing people in the moment," said Markus Gunn, VP of business development in North America for Mufin and its MusicFinder music search tool. "We all have the experience of driving in a car and hearing a great song and saying ‘I gotta remember this.’ We’ve been working with BMW so that when a song comes on, drivers can push a button to save the information and even buy the track."

Crandall agreed. "We want to buy that song, we just need the access everywhere we hear it."

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