Hulu’s future ownership may be in question, but the video streaming site is apparently doing fairly brisk business on the paid subscription front. During an advertiser event this morning, the site announced that it has managed to double its Hulu Plus accounts in the past year, up to four million. The site’s revenue also hit a record for the first quarter of the year, though Hulu’s not giving out any numbers. As with rivals Netflix and Amazon, the company’s making a big bet on original programming, with a number of exclusive series, including the animated The Awesomes and western Quick Draw.
Source: Hulu Blog
This morning, a Wall Street Journal story by
The Argument Against CEO Marissa Mayer’s Alleged Plot To Go After Google And Facebook (GOOG, YHOO, FB)
Yahoo’s board hired Marissa Mayer to be its CEO because board members want the company to embrace a “products” strategy instead of the “media” strategy that interim CEO Ross Levinsohn would have gone with if he had gotten the full time job.
What kind of software tools?
Google products include Google News, Gmail, Google Maps, and Google Docs. Facebook products include Events, Photos, and News Feed. Yahoo’s top products are email, Yahoo Finance, and Yahoo fantasy sports.
It’s obvious why this strategy is appealing to Yahoo’s board. All you have to do is look at the size of Google, a $200 billlion company, and Facebook, a $65 billion company.
One reason they are so big (other than lots of growth) is because they have wonderful margins typical of the Internet software business, where raw materials and freight are cheap. Also, you can build Gmail once and then move most of the engineers who built it onto something else, leaving only a few behind to maintain and upgrade it.
Margins aren’t as lovely in the media business. If your business is to create content, you have a recurring cost the software business does not have; you have to pay people to create it over and over. If you depend on these people too much, they ask for too much money. Likewise, if your business is in the distribution of content, the people who make it will do their best to figure out, and then cut into your margins. (This is why Hulu and Spotify are longshot bets to take over the world.)
So, focusing on a “products” strategy seems like a smart, no-brainer, right?
Not so fast, says one long-time Yahoo-watcher we recently spoke to.
This person says that the conventional wisdom about the software business’s excellent margins, outlined above, is outdated and that Google is to blame.
He told us:
“12 years ago, engineering and helpful tools were such an incredible change in lifestyle so that if you were good at it, you could make a lot of moeny. Software was a crazy high margin business. But here’s what’s changed: Google and companies worth $100 billion and $200 billion have brought software innovation to a zero margin business. They don’t charge for software. They don’t charge for ad serving. They don’t charge for reporting. Google makes all their money on a monopolistic position in advertising. There are no software businesses anymore. The software business is dead. The people who are making their money there are doing it because Google hasn’t killed them yet.”
Translation: Google can afford to make software tools for consumers free to use because it’s search business makes so much money, so Yahoo would be nuts to go out and try making a Yahoo Docs, Yahoo Maps, or Yahoo mobile operating system.
Hopefully, that’s not Mayer’s plan for Yahoo.
Hopefully, the plan is to bring “product” features to Yahoo’s powerful media brands, Yahoo Sports, Yahoo News, and Yahoo Finance.
Americans are watching longer and longer online videos, according to comScore’s monthly online video stats. The average length of online videos viewed has risen a minute and five seconds since September alone. This is good news for video advertisers, as viewers tend to see more ads when they watch longer shows.
This is primarily the result of Americans watching more longer-form content on the web, like TV shows on Hulu. It is important though because longer videos generally include more advertising. Hulu, for example, is the largest server of online video ads, but only shows about 5 percent as many videos as YouTube.
The number of ads per mid length video—defined as 5 to 20 minutes long—rose 63 percent last year, according to FreeWheel. For videos longer than 20 minutes, the number of ads served more than doubled.
Amazon has had a content development division for some time but today it’s announced plans to expand from just movies to developing (and distributing, via its Instant Video service) original comedy and children’s series. The new focus follows the competition like Netflix and Hulu which have both dived headlong into developing original TV show-style content that mirrors the content consumers seem to gravitate towards on streaming services. According to the press release Amazon Studios is willing to option one “promising project” per month for $10k and pay $55k to a creator if their series is selected for distribution. Submissions of 22-minute pilot scripts for comedies and 11-minute pilot scripts for children’s shows are being accepted, which Amazon will either option within 45 days or the creator can choose between pulling it back and leaving it up for community feedback. There’s more info at the site or in the press release after the break, but just remember: if we see any series picked up about dashingly handsome tech bloggers and the fast-paced lives they lead, we’re coming for our cut.
Amazon Studios expands into TV series, looks to load up on content for streaming origin! ally app eared on Engadget on Wed, 02 May 2012 12:29:00 EDT. Please see our terms for use of feeds.
Funny or Die is going commercial by, well, creating commercials.
The Adam McKay and Will Ferrell brainchild, which had a humble start in 2007 (featuring videos of drunken landlord babies) and then exploded into a celebrity-laden viral video machine, is launching a division called Gifted Youth that is entirely dedicated to making real advertisements.
While some products have been integrated into videos—like Emma Stone’s “ad” for iPhone murder apps—it wasn’t done to sell anything. So far, brands have served as excuses to make funny videos. Now they’re going to be the main event.
Chris Bruss, the vp/branded entertainment at Funny or Die who will helm Gifted Youth, told the New York Times that the division will give agencies and marketers the coveted opportunity to work with writers, directors, and maybe even actors who have worked with Funny or Die.
Advertising agencies are constantly trying to create the next big viral video. While once in a blue moon a client will sign off on Old Spice guy, let’s face it, moons are rarely blue and agencies are far more likely to make Mary J. Blige sing about fried chicken in a Burger King ad that is destined to get pulled.
Funny or Die, on the other hand, epically wins at viral content. For example, Will Ferrell’s local Super Bowl ads for Milwaukee beer—spawned from a deal that Pabst made with Funny or Die in 2010—got more Twitter mentions than $3.5 million national Super Bowl spots for Cadillac, Century 21, CareerBuilder, Lexus, and Hulu.
But everyone shouldn’t start dancing in the street just yet. While Funny or Die is good at creating funny content, it’s a whole other ball game when you have a client that’s going to have to approve content every step of the way. Who’s really going to be able to tell Will Ferrell, for example, what he can and can’t say? We’re also anticipating that agencies, who just love working/competing with new creatives on the block, will be butting heads with Gifted Youth.
The new ad shop had a soft launch during TNT’s slam dunk contest during the NBA All-Star weekend by airing a Kia commercial starring Blake Griffin and actor Jeff Goldblum. Gifted Youth also just released spots for New Era baseball caps in which comedians Nick Offerman and Craig Robinson fight over their respective love for the Chicago Cubs and Chicago White Socks. (This is a continuation of last year’s ads in which John Krasinski and Alec Baldwin feud about the Red Socks and the Yankees).
It’s been two years since Next Issue Media was first announced but the subscription-swapping, all-you-can-read digital news-stand is set to launch tomorrow.
Next Issue Media is a digitial subscription service proposed by five of the world’s largest publishers (Conde Nast, Time Inc, Hearst, Meredith, News Corp). Users would receive as many digital magazines as they wish for a flat monthly rate of $10-15, depending on if you want delivery of weeklies like The New Yorker. And just like Hulu, the user will be able to freely pick and choose which content to consume.
The digital magazines will still read like physical magazines—top to bottom, left to right, including ads—which is kind of odd but likely a necessary intermediary step for publishers to make that cognitive leap to accepting digital publishing. At launch, 35 titles will be available for perusal including, Motor Trend, Popular Mechanics, and Time. More titles are expected to debut in the coming weeks.
“You download the Next Issue Media reader once, and all the magazines will be presented there in single format,” Morgan Guenther, CEO of Next Issue Media said. “We think we’ll have a compelling proposition.”
However if the Big Five is counting on this production immediately taking off, well, that’s not likely. NIM requires an app to run—an app only available on Android tablets running Honeycomb. That nobody thought to port this to—much less not build it specifically for—the iPad and its spiffy new Retina display is an inauspicious way to kick off a publishing platform.[allthingsd, Adweek - Image: The AP]
Next Issue Media launches on Android, $15 a month for access ! to 32 ma gazines originally appeared on Engadget on Wed, 04 Apr 2012 06:11:00 EDT. Please see our terms for use of feeds.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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