Multi-Platform Comes to Ad Sales. At Last.

Summary:  The Tribune Company just launched Tribune 365 (www.trb365.com) that claims to provide integrated marketing campaigns—that is, ads across multiple platforms available within the Tribune media—newspapers (e.g., The Chicago Tribune and The Los Angeles Times), other print outlets and television stations.  In fact—and probably more important—it represents integrated ad sales:  one team to sell ad inventory across all of their platforms (and, with hope, others, as well).  We think this is a brilliant step—and long, long overdue.

The Details.

It is pretty straightforward—and both astonishing and understandable (OK, OK, so it’s a contradiction:  Call it a paradox)—that a major, and heavily indebted, media company has finally figured out one of their biggest assets:  multiple platforms.  The Tribune Company’s initiative is called Tribune 365 (www.trb365.com).

Selling ads across these platforms to an advertiser in what the ad industry calls “integrated ad campaigns” becomes a lot more attractive.  More to the point, they overcame one of the biggest obstacles, which is the silo-like ad sales structures of newspaper ad teams selling their ads, TV station ad sales teams selling their inventory, and so on.  Media reports point to a recent campaign for Target, with ads in newspapers, on Tribune TV stations and Tribune websites.

So What?

“Integrated ad campaigns” are not that new but what is new is that they are now available where they count:  where the inventory resides.  This makes it likely that we will see them with more frequency.  Moreover, think about it for a bit:  What the Tribune is doing is a classic case of the model that like very much, which is “audience integration.”  That’s what diversified media companies do best.  They bring audiences to advertisers.  The more diversified they are then the more audiences they can aggregate.

Aggregation recognizes that audiences get their content from multiple sources.  While there may be some overlap (someone who reads “The Trib” and watches a Tribune TV station), there are many people who use one medium and not another.  If those media happen to be owned by one media company, why not place ads across all of them?  That’s audience aggregation.

It’s not always so simple.  We have often seen civil war break out in media companies among the ad sales teams.  The sales team responsible for TV ad sales rebels when the website sales team for the TV station calls on the same clients for their inventory.  It can get ugly.

And it is understandable, because you are dealing with the livelihood of salespeople.  Someone who has cultivated the ad agency (or internal ad buyer) of a large advertiser for years relies upon the sales commission to pay the mortgage .  Why should he or she let a competitor—even someone in the same corporate family—put the saleperson in financial jeopardy?

And (we hope) that’s what the Tribune Company has figured out.  We hope that the integrated sales team means that commissions are not limited to one medium because that is the only way that you can (and should) change the ad sales culture.  After all, ad revenues amount to the lifeblood of most media companies.  And selling ad inventory makes that lifeblood pump.  And earning those commissions is what enables the sale of that inventory.

Twitter on TV

Summary:        Now we have a new form of convergence:  social networking and (cable) TV.  Not a bad move.  Verizon announced two new “products” in its “social TV” initiative.  One is a set of widgets that enable viewers to connect with other viewers through various social networks—while watching TV.  The second enables viewers to watch user-generated content from certain websites.  One more step in convergence.  Of course, it is a bit like the Zeno’s Paradox of digital convergence.  You could also say:  It’s about time.

Through its FIOS TV service Verizon is taking a few bold steps towards digital convergence.  First, Verizon will create an application store with widgets developed together with some notable social networks—Twitter, Facebook, Veoh and a few others.  So, a FIOS subscriber can follow tweets they select from a list—including the programming they are watching.  They can log into Facebook (but not yet Twitter) to update their profile as to what they are watching at that moment.  An SDK will be launched soon.

The second new product permits a subset of subscribers to start searching and viewing UGC from certain video sites, including Veoh and Blip.TV.

So What?

Well, it is another step closer to digital convergence.  Using TV programs to tweet is an obvious stimulus to that convergence, when you consider how often TV shows are the subject of tweets.  Tweeting about these programs is of course nothing new and these widgets do not (yet) enable tweeting through the TV.  What it does permit is to enable a viewer to see whose twitting what and when.

So that’s why it’s like Zeno’s Paradox.  Remember:  Walk halfway across the room, the half the remaining distance, then half the remaining distance—and so forth.  This is a little like that:  closer, closer, closer, but not quite there.

But the move is just the first and we can expect more.  The application store will propel developers to pay attention to crossing the chasm between the TV, the PC and the mobile phone.  Think about it:  Twitter is (largely) phone-based and Facebook is (largely) PC-based-platform.  This appeals to the developers.  FIOS competitors will figure out their own way to merge social networks with TV programming.

OK, now the gears are churning.  Think of characters using Twitter in the programs—and they are matched by Twitters available to FIOS users.  And so forth.

Stay tuned.

The Debate on Data: The Ad Industry Chimes In.

Summary:  With congressional and administrative attention now on the online advertising industry, the industry is responding with “principles” to continue self-regulation.  Whatever the outcome of the debate now underway, TOUs and EULAs will change.  To the business side of digital companies, these are boilerplate:  To the lawyers, they should be seen as what they are–binding agreements with end users and that have serious consequences if they are too one-sided.  You can read the entire report atwww.iab.net/behavioral-advertisingprinciples.

The online advertising industry has responded to the February 2009 FTC Staff Report on the topic (which is called “behavioral advertising”).  That industry created a report on “principles” for managing these data.  These principles represent an attempt to maintain the self-regulation structure now in effect–something that has not made regulators happy (rightly or wrongly).

You can read the report at the URL above.  Here is our take on the principles:

• Ad Industry Mobilization–the mere fact that disparate industry associations have gotten together is good news, because these people have great experience and expertise to apply to a topic that is really pretty nuanced.

• No More Fine Print–well, everyone can dream.  It is not so much that the industry will eliminate dense legalese in TOUs, but that the language is supposed to be drafted to be transparent–providing genuine guidance that end users can understand.

• Actual Innovation–The report includes one innovation:  an “approval” toolbar on browsers.

• De-identification of data–this is the one we like the most.  Finally, the ad industry is beginning to recognize that the data can be extremely valuable in their aggregate form, without recourse to knowing about the actual individuals.  Pay attention to this one.

• Sensitivity–This principles recognizes that not all data are created equal and some are more sensitive than others.  Think of medical records.

• Material Changes–gone will be the days of unilateral retroactive changes to TOUs.  Actually, this is just a recognition that the Federal Trade Commission (FTC) will win on this point and that courts are moving in that direction, as well (See blog on Blockbuster case).

So What?

From a legal perspective, this will add more pressure on companies to change their TOUs, but from a strategic perspective, it is one more piece of the evidence of the growing appreciation–not of the data themselves but of their complexity and vast value.  In other words, it is no longer an either/or debate:  either the industry gets to collect everything or nothing.

Therefore, think about what kinds of data your company wants about use (and not necessarily about each end user).

(See some TOUs, etc., we have drafted: www.npbn.com and www.photospin.com for some examples.)

“TV in Context” Targets TV Ads

Summary:  Taking a page from websites, networks and cable channels have introduced “TV in Context,” with ads that are “contextual” in the sense that they are tailored to a particular moment or scene in a given show.

Cable channels and networks have expanded their program, “TV in Context,” of placing ads in TV shows and movies that play off a particular scene in a scripted series of a movie.  For example, just after a crash scene in the Bourne Supremacy, an ad for the in-car service OnStar said “Are you counting on your cellphone to be your lifeline in a car crash?”  (See the New York Times article http://www.nytimes.com/2009/05/20/business/media/20adco.html?fta=y.

What is surprising is that it has taken networks (and cable channels) so long to get here.  For decades, advertisers have made sure that their ads are not placed in the wrong place—e.g., an ad for a Chevrolet just after a fatal car accident occurs in a TV series in which a GM car is involved.  And this is innovation?

TV Ad Innovations—Embracing Multiple Platforms?

Summary:  CW will launch an ad campaign that encourages viewers to communicate with each other through social networking—texting, Twitter, Facebook and the like.  Now, at least someone recognizes the value of multiple platforms.

Among the more interesting approaches to respond to advertisers’ demands on networks, CW will launch an ad campaign that acknowledges and embraces the viewers’ use of other platforms.  Called “TV to talk about,” the tagline will change with each ad to things like “TV to text about,” “blog about,” “chat about” and “tweet about.”  The New York Times published an interesting article on this point at:

http://www.nytimes.com/2009/05/21/business/media/21adco.html?emc=eta1

CW is probably better positioned than other networks because its programming attracts younger audiences who already interact across digital programs.  What was interesting (according to the NYT article) was that CW had to send researchers to the homes of viewers to find out that viewers do this.  Now that’s funny.  What are they reading?

So here’s an idea:  Let viewers opt in to a scroller that shows the most popular Tweets (or other feeds of comments of other viewers) during the show.  Of course, the scroller will be sponsored by an advertiser. . . .

Blockbuster Blows its EULA–and You Should Care.

Summary:  You might not have read it here first but you have read it here often:  Courts are taking on—and deciding against—what they consider to be unfair terms in EULAs or TOUs.  In this case, it was the federal district court for Northern Texas, finding that the arbitration clause was illusory.  It is important to note that this case, in our opinion, does not stand alone but adds more case law attacking the terms of these online agreements.  These cases are—and in particular this case is—consistent with one of the principal points central to the new FTC staff guidelines.  The message:  Complicated TOUs put the client at greater risk.

Introduction

In Harris v. Blockbuster, the court for the Northern District of Texas held that the arbitration provision of the online agreement for the use of Blockbuster was illusory.  Dicta suggest even broader implications for the decision, but that alone was enough to cause some concern (we do not yet know if there will be an appeal, though it is probable).

As far as the court was concerned the main problem with Blockbuster’s online agreement was sort of a double-whammy.  The agreement stated that Blockbuster could change the provisions at any time—which would, of course, mean that changes with retroactive effect would, in the opinion of Blockbuster, be enforceable.  In this case, some disputes arose and Blockbuster then added an arbitration provision, which was to apply retroactively and thus eliminate much of the risk (from a trial).

So What?

So, online agreements (what we call EULAs and TOUs) with retroactive changes inserting (or affecting) arbitration provisions will run afoul of this opinion—of course, in that district.  Moreover, the opinion carries some weight with other claims about online agreements.  Many online agreements—perhaps a majority, perhaps many more—have such provisions enabling the publisher (in this case Blockbuster) the right to make retroactive changes to the terms.  Suddenly, then (if you believe in Chicken Little), these provisions are at risk.

Ammunition & Guidance. Really, though, the opinion builds on a string of previous opinions that, taken together, provide both substantial ammunition for plaintiffs’ assaults on these agreements and, if you think about it, guidance on what to include—and exclude—from online agreements.

It is not necessarily a bad thing.  The FTC staff report gives pretty clear guidance on what can be done:  If a party wants a right to changes, then they should not be retroactive and the user must have some kind of right to agree (or not) to those changes going forward.

This is not some rogue court.  The cases cited include some in the Fifth Circuit and some in Texas itself.  With some serious contortions and impressive legal reasoning, one could distinguish this case from the facts and holdings of those precedents.  But it is not so simple.

In just the last several years, quite a few courts have taken on the online agreements.  They include courts in the Ninth Circuit and in Pennsylvania.  The reasoning can be distinguished but not here.  They all come to a smell test:  Does this really smell like a contract?

These cases fall within an even longer line of opinions regarding the nature of agreements between corporations and consumers.  As the FTC staff report pointed out (with copious footnotes), “fine print” cases have a long history.  And it is a history where the “victor” has swung from the consumer to corporations and back.  Now, with the new administration, with the FTC’s stiffer attitude about consumer rights (rightly or wrongly), and with these cases, we can expect history’s pendulum to swing the other way.

Conclusion

Write “Gooder.” These agreements do not have to be so dense and they do not have to have such onerous terms.  The right of retroactive modification was a term just waiting to be shot down.  Too often, lawyers just copy and paste a TOU from another site.  Or, perhaps they have to justify their legal fees on a topic that is perceived by clients as unimportant boilerplate.  Whatever the reason, this case should be a shot across the bow that attorneys put their clients at greater risk with such legal intricacies as we now see in EULAs.

Perhaps we’ll get some online agreements that are actually well-drafted;  that do not read like fine print;  and that provide better terms.  But then, we believe in the Easter Bunny, too.

Smart Meters Go Wireless

Summary:  T-Mobile USA has hooked up with Echelon, a provider of smart meters, to make those meters wireless (for the US market).  Smart meters are a key to upgrading the power grid and the wireless feature will simplify connection to the utility companies.

Echelon and T-Mobile recently announced that Echelon will embed a wireless SIM into its smart meters.  T-Mobile’s value-add is also that the chips will be more durable than current deployments.

The wireless connection will improve the link into the utilities, providing them with real-time information on power usage, as well as problems with their networks.

So What?

This is a “shovel-ready” project to upgrade the grid that also seems to have a knock-on, or multiplier effect, not to mention improving efficiency of the power network.  Apparently, the embedding has already begun.  Echelon has already delivered some 100,000 of its smart meters in the US (to Duke Energy) and more than 1.6m around the world—though without the wireless connection.

The Knock-on Effect

The knock-on effect suggests that companies can provide data management applications for the utilities.  The obvious starting point is the incoming data on power usage and network reliability.  However, data miners could work with the utilities to monetize those data—with obvious and very careful attention to privacy matters.

Finally, imagine an app on your smartphone and/or your laptop, telling you your immediate usage.  One the data are available on a wireless basis, then they can be delivered to any number of platforms (taking into account that the data are initially broadcast in cellular radio format).

EVENT: Panel on “Valuing Media Assets in a Down Market” at Digital Hollywood May 4th.

On May 4^th I will be participating on the panel “Media Asset Valuation in a Down Market” as part of the Media, Money & Technology Symposium of the DigitalHollywood 09 conference, May 4^th through May 7^th in Santa Monica.  http://www.digitalhollywood.com

I will be discussing some of the due diligence minefields, especially in licensing agreements that serve as the basis for ownership claims (and therefore value) on media assets.  Ping me for more information.

Ping me .  For the fun of it, try Twitter:  globalcapjcr

AP Launches its Online Battle to Control What It Owns.

Summary:  In what may be a variation on the model of the RIAA campaign against illegal music downloaders, AP has launched an assault on the “free” use of news on the Internet–not just their feeds but, apparently headline links.  A part of this assault is a suit in US district court in New York against All Headline News Corp., a news aggregator.  That court just denied a motion to dismiss the suit, applying the principle of “hot news” to online news for the first time.  One point for AP.  That decision and the legal theories underpinning the “assault” are connected.  Add another point for AP.  (Please note that a copy of this entry can also be found at digitaldumonde.wordpress.com and globalgeneralcounsel.wordpress.com)

AP recently announced that it is fed up with the misuse of its news feeds-an understandable lament given that its customers (newspapers) own AP.  You may be hearing echoes of the famous movie, Network, and they are more than echoes.  At the annual AP board meeting, the chairman, Dean Singleton said “We are mad as hell and are not going to take it anymore.”

We take no position on whether this is a good or bad thing.  Many, many talking heads (“typing hands” for a new name for bloggers?) are decrying what they see as a frontal assault on the doctrine of “fair use.”  We do not see it that way.  We do see it as an opportunity to clarify not only the application of that doctrine online but also a way to discuss, and eventually clarify, the appropriate business models for online news and information.

A Few Details

They plan on policing the misuse of copyrighted material.  How is a matter of speculation.  AP has signed up with Attributor, a company with technology that can track use of digital information (stories and photos) that have a digital “fingerprint.”  Armed with that information, AP could demand some portion of ad revenues from sites using the offending materials in a manner beyond the limits of the “fair use” doctrine.  (You heard it here first, by the way.  We wrote several weeks ago that demands by newspapers for such revenue are not unreasonable as a move to increase revenues for online newspapers.)

Fair Use May Change.

We get it.  We might not support the approach (and we might also support it) but fair use has been strained to, if not beyond, the limits of credulity to justify online use of information created by others, for which the copyrights are also owned by those others.  In these situations-where a legal doctrine lags too far behind market development-the doctrine becomes the focus of legal assaults and the consequences are a changed doctrine.  Regrettably, the public debate on this matter has begun to take on ideological “hate” language that relies more on ad hominem attacks than reasoned analysis and argument (in the “rhetoric” sense of that word).

The First Salvo:  All Headline News.

AP is going after All Headline News, a news aggregator.  They have been accused of stripping attribution (including copyright notice) from AP articles and re-publishing them without any changes whatsoever.  Again, we take no position on what they are doing.  AHS filed a motion to dismiss, which was denied by the district court in an interesting opinion.

Why?  Because the court anchored its action to the “hot news” doctrine from 1918 (an opinion from a case that arose from the start of the business of the real-life model of our favorite film character, Citizen Kane).  There, news that is so “hot” (like breaking news) becomes the quasi-property of the people creating the news stories in the first place.  Whatever your opinions on the doctrine, this is the first time that “hot news” has been applied to the online news world.

So What?

We discern a certain theoretical strategy behind AP’s approach, something that seems to have escaped notice with all the screaming against AP now underway.  In a sense, hot news can become something of an argument against a “fair use” defense.  That is not quite it-but we will leave that sentence in, anyway.  Rather, finding the applicability of the doctrine, the court gave AP the basis for arguing “misappropriation.”  That can become the basis of a legal theory that differs from mere infringement.  In a simple manner, it can be explained that the word is the civil law equivalent of “theft” in the criminal context.  Putting aside discussions of legal theories, strategies and tactics, the opening into this legal argument carries with it the potential of using “freighted” language to use in the PR battles that AP faces and will continue to face.

Information Wants to Be Free??

That rallying cry has energized much of the discourse that coincides with the explosive growth of all things digital.  Whether something as diffuse as “information” can be called something singular in that context is one thing;  whether it can “want” anything is another.  But that’s not our point.

There might be a tectonic shift underway (OK, warning: Now we’re getting really speculative).  Most obviously, the collapse of the newspaper industry alarmed people (OK, primarily the pundits and shareholders and employees but you get the point) enough for alternatives to “free” to be openly discussed as new (or recycled) business models.  At an even more abstract level, the conservative interpretation of the “free” market is now in retreat (rightly or wrongly is not our point), and so also might other ideological positions that tend toward a libertarian bent.

We don’t know.  But we do know that AP has a fight ahead of it–and it is a good fight.  The outcome might not be what AP wants-or what anybody wants-but it will be a changed world because of it.

Hey Chicken Little!! Newspapers Should Look to Europe for Some Survival Clues

Summary:  European newspapers are figuring out how to survive–even using an old concept.

We have posted quite a few blogs on newspapers (see others at digitaldumonde.wordpress.com where a different version of this entry is posted).  No, Chicken Little, the sky is not falling in the newspaper world, though it does look a bit cloudy.  Look around you.  Try Europe, for starters.

Premium Services, Not Premium News Access.

One approach is to provide premium services.  In Norway, you can pay a hefty price ($90) to join a weight-loss club that is part of a newspaper website.  Your profile on the site can be updated but only for another fee.

Now, paying to upgrade your profile may be a bit much (unless the weigh-loss membership has not been successful) because of the nearly ubiquitous networking sites, but the point is to offer other services for a fee.

US papers tried this approach but in a different manner:  They charged a premium for access to certain news.  (One site, about which we have written, www.globalpost.com, charges a premium for additional news AND access to the editorial meeting, of a sort, and access to the journalists themselves).  Think about other services.

The Old Horse of Repurposing Content

Axel Springer, a large player in the publishing space, revived an old concept, which makes perfect sense:  Write once, distribute many times.  Write the article and post it on multiple sites.  This is the old concept of “repurposing” content for different platforms and different audiences.

Data as a New Source of Revenue

Newspapers make money not be delivering news but by delivering audiences to advertisers.  Few things are better than granular data about audience interests.  The more platforms on which your news is available, the more granular those data.  Advertisers like that.  They will pay for that.

Perhaps losing weight through a club run by a newspapers does not sit well with your idea of reading weighty editorial pronouncements.  But something else might.  Newspapers thinking this way create what their advertisers want:  connections with their potential audiences.

And some of them may lose weight, too.

Oh, and if you want to think about the ramifications for licenses then go to globalgeneralcounsel.wordpress.com.