Streaming Media West 2005 Wrap-Up Part 1

The Business of Online Music & Movies
Moderator: Eric Schumacher-Rasmussen, editor, StreamingMedia.com; Panelists: David George, vice president of sales and alliances, Maven Networks; Jon Gelsey, Digital Home, Intel Capital; Ian Schafer, president and founder, Deep Focus; Margaret Wilhelm, senior director of consumer relationship marketing, Universal Music Group

The panel seemed to have more to do with how ad agencies had incorporated online advertising and marketing as simply one of the more exciting and trackable areas on which to spend money. Ian Schafer’s demo of an interactive Black Eyed Peas Flash page showed off all the gadgets that you'd expect: ability to see audio and video; click through to a sweepstakes; and ability to directly go purchase the audio content. The key part of the demo was that they actually provided complete streams of two of the songs and their video. These weren’t 30-second samples; the full songs were there. Rather, it was a sampling of the album, plus an opportunity for the consumer to interact with the "brand" (in this case, the artist or band).

As is normal in these sessions with established players, no one would talk even generally about costs, ad rates, or the like. But the session was educational in terms of how much online campaigns have been incorporated seamlessly into standard marketing. Some people were at the session to find out about the business of paid content online (i.e. Desperate Housewives on iTunes, AOL's downloadable content, etc.) but this panel, put together months ago, focused on what's been working online for years: streaming media as an ad, and coming out of the marketing budget.

So for those change-addicts who were looking for "disruptive, paradigm-shifting" monetization strategies, there wasn't much here. However, a couple of key points still caught my attention:
1) Full content is being given away (albeit in a streaming, not downloadable, form), and brand promoters are comfortable with that. They've gotten over the false assumption that "people hearing the song for free" = "they'll never pay."
2) Trailers and ancillary content to shows and musicians is sustainable content in itself. Entertainment Tonight proves that light, harmless gossip combined with interviews and clips can be monetized, and this content is "safe" enough to put out without DRM.
3) Streaming media online is gorgeously trackable—how long streaming ads are viewed, how many clicks, whether they sign up for a sweepstakes and convert into a mailing list. And these conversions into opt-in lists are turning online marketing into a more traditional sort of mailing-list business.
4) Thus, demographically profiled ads are coming soon. Because of two-way IP networks, we will soon see an ad just for you relating to goods or services, based on who you are and where you've surfed before. Microtargetting of ads is coming; privacy concerns will be overcome.
5) In one panelist’s opinion, all audiences are fragmented. You simply need to find the content they watch/consume in any medium, and put your message there.
6) When selling ads, you have to work with Nielsen-like ratings; in essence, you have to sell new Internet ad inventory, and try to back-fit it into models that are known. Otherwise, it's hard to sell it to the customer who is trying to put a message out. The takeaway is that new-media advertisers need to fit their "new medium" of eyeballs into a traditional pricing scheme.
—Damien Stolarz