Advertising Supported Media

The strapline for this blog was originally "The Purpose Of All Media Is Deliverance To Advertisers." These words of wisdom were originally passed onto me by an old mentor. However, this was back in the late 90s just prior to the launch of digital television.

The media landscape has changed so much since then that I am not convinced that this phrase rings true anymore.

One of the reasons for this is that what we now classify as media is a lot broader than ten years ago. For example, a stock ticker plugin for Firefox is media in that it is a distributor and carrier of information. However, a number of these do not serve any commercial purpose. Cloud based services now reposition software as media. It is unlikely that decent enterprise packages will base their business model on advertising.

However, the main motivation for this post has been in what the perceived role of advertising is in the future of television and music industries.

Over the last few weeks the traditional advertising supported role of television has been brought into question due to the downturn in the advertising industry. Besides the economic climate, this is due to the proliferation of choice and segmentation of audiences. This started with the emergence of digital television but more recently has been affected by the growing proportion of advertising spend being used online. As I mentioned in a previous post, Google now generates more money than ITV.

It is only now that we are really starting to see the slashing of budgets for programming on commercial broadcasters. Notably, ITV and Channel 4 are really feeling the pinch. Last week Michael Grade announced the slashing of high budget productions and laid off around 600 members of staff.

In really simple terms, the smaller an audience is the less the programme will be able to generate from advertisers. As television has always been referred to as "the blunt instrument," it is nigh on impossible for advertisers to know who they have been reaching. The only way commercial television will be able to compete with the likes of Google is with mass adoption of internet protocol television, with Phorm-like technology for ultra customised targetting.

Another ramification which this has for the future of television is that production companies may well have to look for new sources of funding to produce and commision content.

However, on the flipside we have the music industry. The emergence of the free version of Spotify has resulted in the growing assumption that the future of the music industry could well rely on advertising supported music services. This is interesting for a couple of reasons. Firstly, that services like Spotify are increasingly making music being thought of as media. In turn, the collapse of one business model within the entertainment industry is being held up as a potential solution for another.

Whilst I believe that one way of monetising the consumption habits of music fans is to subject them to advertising, I am not convinced that this is sustainable. In a recession it is a great way to grow your customer base. However, somewhat paradoxically advertising is one of the first industries that is hit in a recession.

It is widely known that premium subscribers of internet services are a lot more profitable than free customers. It is fine to build your customer base first and monetise later. However, the importance of monetisation is imperative as the traditional IPO exit route is not one that is a viable option in the current climate for entrepneurial startups. Twitter and Facebook are perhaps the best and most often quoted examples of web businesses facing this dilemma.

The upshot of all of the above is that what we now classify as media offers a lot broader scope than the days of yore, and that the way forward is to rely less on advertising. This is likely to be economically viable but it is not yet clear how scaleable this will be.

The Pirate Bay On Trial

On 16 February The Pirate Bay is being taken to court against infringing numerous copyrights. I appreciate that these details are quite sketchy but this is all the information which I could glean from TorrentFreak.

The trial is shaping up to be the biggest case of intellectual copyright being infringed in the entertainment industry since the closure of Napster.

Regardless of whether you believe the mass distribution of information is a case of evolution in culture, or a blatant infringement and exploitation of intellectual property, it is clear that the creative and media industries need to be more resourceful and entrepreneurial in creating new business models. And that's without even mentioning the state of the global economy.



I decided to warm up for the big trial by watching Steal This Film 2, the second part of a part documentary series on BitTorrents.

Ofcom: If the media regulator can't protect its own data what hope is there for the rest of us?

Currently Ofcom is sending waves throughout the blogosphere and national media at large due to the this week's much anticipated Digital Britain report.

Rather than chip in with my own opinion on the green paper I'm here to shed light on Ofcom's incompetence at handling their own data.

After applying for a role at Ofcom late last year, I received an email this morning informing me that I had been rejected. However, the email included the addresses of the hundreds of other applicants who had also been unsuccessful.

Considering Ofcom is a media regulator, this situation is ludicrous. In turn, I take exception to my email being passed on unsolicited to hundreds of other individuals. This creates mass opportunieis for data harvesting.

The phrase "couldn't organize a piss up in a brewery" comes to mind.

Market Research 2.0: Soundout

In the current economic climate, it is inevitable that as budgets get squeezed any sort of investment within the creative industries must increasingly become science-like. As
Peter Drucker once said, "what gets measured gets managed."

Soundout is a new web application developed by Slicethepie which enables labels, publishers, artists and broadcasters to anonymously subject users to their music and receive demographic profiling and consumer insight stats on their recordings.

I think this is a great idea, and an affordable solution for artists big and small. However, one caveat is that market research can sometimes be too clinical and miss out on freak accidents of success and chance.

A well-known example of this is Kenna. In Blink, Malcolm Gladwell illustrated how a number of very influential tastemakers tipped the artist for huge commercial success. Initially this did not materialize due to poor feedback from radio airplay research reports. However, artist and tastemaker alike have been vindicated now that Kenna has been nominated for Best Urban Performance in the 2009 Grammy's.


As a music fan I wouldn't be too happy knowing that if everything I listened to had gone through rigorous market research prior to being released. It's somehow fine if this is done organically by Hype Machine but the anonymous aspect of Soundout isn't open enough for me. Music discovery should be about chance and randomness.

Ubetoo - Revenue share platform for unsigned artists.

I'm not sure I can keep up with all these great Swedish music startups. First Spotify, then Soundcloud (technically based in Berlin but populated with lots of Swedish expats), and now Ubetoo.

Ubetoo is a platform which allows unsigned artists to upload music and audio and receive up to 90% of ad revenue from commercials run alongside the content. Whilst YouTube does have a scheme similar to this, it is only open to a smattering of loyal and attention worthy content producers.


This also gets over the criticism of social networking sites exploiting artists for attention but not sharing their enormous ad revenue. At the EconMusic Digital Music Conference back in September, Billy Bragg singled out MySpace and Bebo as two of the most guilty parties.

In order to qualify for the 90% ad revenue share, content producers have to sign up to Stagepool, which is an audition and casting service based in Stockholm and Cologne. Last month the artist with the highest pay out was The Vetter Factory with 158, 23 euros. Not too shabby.


The site also includes a number of widgets to embed channels and content on other social networking sites. However, I'm not too sure these sites would be too happy at Ubetoo piggybacking them to derive significant significant ad revenue.

Open Education

There was a great supplement in The Guardian yesterday, entitled Digital Student.

One article which particularly stood out was on Apple's Itunes U service, allowing for universities to upload lectures for free for users to download. This is something the likes of Stanford and Harvard have been down with for a while now but it was only a couple of months ago that Oxford and Cambridge got on the case too.

Services like Itunes U allow a unique marketing opportunity for globally recognized institutions to build brand equity by spreading their content to every corner of the globe.

Personally, I am a huge fan The Open University's OpenLearn facility. Over the last couple of months I've enrolled in a few maths modules to bring my numeracy skills up to scratch. The platform provides a plethora of subjects and modules for users to sign up to, totally free. It's fascinating to look at the other members enrolled in each module and see how their membership is made up from people mostly outside of the UK. I've also dipped my toe into an Introduction To Computer Science course at Harvard, which can be accessed here.

The future of education is clicks and mortar.

In the current financial climate it is logical to assume that tech investments will be made in startups that have some kind of social benefit. Channel 4's stake in School Of Everything is just one example of this.

Habitat - The First Virtual World?

Great link forwarded to me from Ben Atkins. It seems futurism was alive and well in 1986.



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