The Ian Bell Weblog

Time Warner is selling off 18 magazines. Chief Ann Moore says Time Inc. plans to focus on its core titles — “the biggest brands in print” — and develop them into “the biggest brands online.” Wow this is huge news here. Has the internet really had this large of an impact? Do you guys think this is a smart move? Definately. Among the small niche magazines moving to online include Popular Science and Field & Stream. An internal memo from Time Inc. Ann Moore says the following:

“As you may have heard, we announced plans earlier today to sell some of our smaller niche brands that we feel no longer fit with our strategy for Time Inc.’s future.While these titles are good performers, Time Inc. is focusing its energy, resources and investment on our largest and most profitable brands, brands that have demonstrated an ability to draw large audiences in print and digital form. Our recent acquisition of Golf.com and greater investment in CNNMoney.com, SI.com, People.com, Time.com, InStyle.com and Time Inc. Interactive are evidence of this focused strategy. Time Inc.’s unparalleled skills in creating, editing and packaging compelling content can translate successfully to all distribution channels. With our category leading brands in news, sports, finance, celebrity, health, fashion and home, we’re well positioned for growth in multiple platforms. “

NBC has already unveiled a YouTube clone while News Corp. is looking to get into the business as well. If these companies are going to host their own videos and allow viewers to distribute them like YouTube does, will the Google and Yahoo!’s of the world still continue to host these videos as well? Suprisingly likely I think. This “viral” type of marketing does cheapen the brand in my opinion, but who cares if that means they will get revenue right? I am not sure I have too much insight into these ventures yet, but if you do, I would love to hear it. Smart move for NBC and News Corp?

Network television is “still the best game in town,” insists CBS boss Les Moonves. “The Googles and Yahoos can’t produce the shows we produce.”

No they cannot produce the shows you can Les, but they can certainly cheapen their value. Who needs TV when you will be able to download the full shows off the net, whether its illegally through Bit Torrent or legally through Google or some other video service. I do not know the broadcast industry enough to figure out the math, but I am willing to bet that its easier to make more money on TV through promotional or advertising campaigns than it is off a video pre-roll or $1.99 download fee. I could be wrong here though.

I used to be able to get Monday Night Football in HD for free using a basic over-the-air HD antenna, but since ESPN took over, the only way for me to get it in HD is to subscribe through my satellite service (DISH) which wants $20+ for the HD box rental and channels. Gimme a break guys!

 Smart move for ESPN though, this past Monday was the single biggest viewership for them with an estimated 12.6 million viewers. “It was the second-largest audience in terms of households in cable history, with 9.1 million homes. ” Now if ESPN was only available over the airwaves in HD I would be happy….where is my FIOS service Verizon!?

One of the biggest mistakes we have ever done was to sign up with advertising networks. When we originally got into this business, we thought that advertising networks would be able to help us by selling our inventory. We were the new kids on the block, operating on a shoe-string budget so we thought we would let the experts take over. I can tell you now that as a result our inventory has been sold for less than it should have on numerous occasions. Thankfully that is all in the past. I will say though, that ad networks will always continue to drive the average CPM rate down across the board, and I am starting to see this now with video advertisements.

My recommendation is to hire your own internal sales team and sell yourself. Videos are expensive to produce, host and operate. So of course it makes sense to charge $25-$50 CPM rates for them. The problem here though is that ad networks specializing in video ads are swooping in offering to sell your “remnant” inventory” without infringing on your sales team. Don’t buy it. Don’t even consider it. And don’t even listen to their pitch. They come in with low CPM rates and eventually media buyers will believe they can get on your site for half the price by going through the ad network instead of dealing with you directly.

Case in Point:

We pitched to Gateway Computers and were turned down because we were told our site was not a good fit for their back-to-school campaign (silly because their PR team sent us a couple laptops to use in our back-to-school videos). The next thing we know, we get a pitch from an ad network that their client “Gateway” would like to advertise on our site. Sneaky eh? Well of course we turned it down, but now I am already wondering if ad networks are claiming they represent our primary inventory when they don’t.

Advertisers want your video inventory, so go get it yourself. Sign up with Double-Click and track the video ads that way. There is no reason to use an ad network for your primary inventory. You will retain control and get their CPMs you deserve.

In the end I predict the CPM rates for video ads will continue to drop as more ad networks enter this space, this is inevitable of course. Those sites out there offering premium video content will still be able to charge want they want though. Do not give in to the ad networks…repeat this three times every night.

We just posted a review of the Audioengine 5 speaker system for your Apple iPod. Speaker systems for your iPod simply do not get any better than this. I have had a chance to listen to these (before they were even broken in) and they sounded amazing. I also love the little touches like the AC input on the back, and the line-in/USB connectors.

A link to the review

A link to a video of the Audioengine 5 speakers in action

I was asked to be on G4 Tech TV’s “Attack of the Show” Loop segment. The topic: “Is Technology Moving Too Fast?” With the recent battery recalls and problems with the Xbox 360, some of the biggest and best new gadgets seem to have some major problems. Are things being rushed to meet consumer demand, and are problems getting worse as technology improves? You can view the videos here: http://www.g4tv.com/attackoftheshow/videos/index.html  under the 8/31/06 date.

Is technology moving too fast? Not really. The problem as I pointed out is that in this industry, you have such a small window of opportunity to get your product out there while the buzz is hot, so your ship dates are always moved up and you are rushing to get your product out. Another issue is that margins are so low, that companies are often using the same parts. So with the case of laptop batteries, if one company like Dell has a problem with their batteries blowing up, so does Apple, Sony, Panasonic etc, because they are using the same battery manufacturer. This is always the case in a super competitive market; corners are always being cut. Look at the examples:

 - Video game consoles: Microsoft reportedly loses about $700 dollars on each Xbox 360 sold. Why? They make the difference up in royalty fees that they charge software developers. They also pushed to introduce the Xbox 360 to market a year ahead of Sony’s PS3 and the Nintendo wii. Corners have to be cut somewhere right?

- MP3 Players: Look at companies like iRiver that are slowly sinking. No one can touch the iPod, so they are trying to come up with new ways to garner the attention. Lets throw in a flash OS, a cool click interface and then cripple the product with only 2GB of storage. Its obvious where the corners were cut here (yes I am referring to the Clix).

- Laptops: Lets get real, just about every laptop is the same. Same chipset, same battery, same screen. Different paint. The margins are almost the same with every manufacturer. Charge $400 more for 100MHz, sound like a deal to you? Not me. HP’s sweet dv200t starts under $800 bones, what a great deal! Think there is a lot of money being made here? Unlikely.

Let me know what you think. I would love to hear it.