Recently in Traditional Distribution Category
Old media turns combative against new media | Technology | Internet | Reuters Annotated
"At a panel discussion on the second day of the 56th annual National Cable & Telecommunications Association conference, top executives said talk of the demise of traditional media in the digital age was overblown."
"You'll see more acquisitions," Chernin said. "This is a world where the big get bigger. You'll see increased consolidation."
Rupert Murdoch has said that sports are the battering rams of pay television.
The expansion of distribution methods for television has placed scarcity in broadcasting away from distribution and onto content production. This gives copyright owners leverage because success as a broadcaster depends upon securing ongoing access to the the rights of distinctive and attractive programming. So, the bargaining power of television rights owners has increased. The growth in pay television has lead to bidding wars for attractive content from sustainable producers and inflated the cost of programming rights. Sports is the perfect example and trends show that sports franchises have moved from mainstream channels to pay channels over the last few years in increasing numbers. With direct payment, costs for outbidding terrestrial rivals are simply passed on to the viewer. Advertiser-supported broadcasters cannot do this. So the growth of subscription funding is inevitably shifting not only audiences but also economic power away from advertising-funded channels to pay-television operators.
Even costs for game production are projected to rise as demand for third party intellectual property from proven sports franchises becomes more desirable to game companies looking to mitigate escalating risks from fewer profitable titles.
AdAge reports on the brisk Ads sales of NFL games:
Advertising Age - MediaWorks - Broadcast, Cable Execs Applaud Brisk Ads Sales for NFL Games
Excerpts:
ESPN is virtually sold out of its "Monday Night Football" inventory, although it's worth pointing out that cable operators that carry the sports channel get about 30% of the total ad inventory available. Fox has sold between 85% and 90% of its Sunday football inventory. NBC, the new player in town, is 85% sold, and CBS is 80% to 85%. Overall, cost-per-thousand-viewer increases compared to last year outpaced this year's broadcast upfront pricing increases at around 5% to 8%.
Reality television is a result evolving market forces. Certainly, the rising cost of production and the demand for content with the worldwide proliferation of cable is one obvious driver. Reality television especially of the type that is integrated with the Internet or with direct viewer response is also part of the evolving trend towards interactive media with the younger demographic. Interactivity is also part of the gaming generation's fascination with role-playing. Sims in the world of traditional television content is found in the form of reality television. According to John C. Beck and Mitchell Wade, in their study of the gaming generation's attitudes towards business, entertainment software has trained this generation to expect a heightened relationship based on immediate rewards or consequences with media and the world at large. I believe this ethos towards role-playing and interactivity is seen in the form of reality-based shows like "American Idol" and the "Apprentice".
With advertising in turmoil on broadcast TV, reality shows - like American Idol or even Tommy Hilfiger's less successful "The Cut" - take product placement well beyond a can of Coke enjoyed by our favorite television show's character. "Idol was simply a marketing tool for me to sell records," says Simon Cowell on "Larry King Live." "The show was one thing but it was actually my record label, which was the most important thing. So, my background is I run a record label, and I still run a record label and that's really my passion.
The real winner of "American Idol" is Cingular Wireless. Cingular has an exclusive deal with the show's producers that let customers text their votes instead of trying to call in on busy lines. In Season Four last year, 41.5-million text votes were sent in; Cingular charges between $19.99 per month for a text package with 2,500 messages included and 10 cents per message on a pay-as-you-go plan, meaning the company raked in as much as $4.15-million in text messaging fees from American Idol votes alone last year. When the Apprentice was at its peak, Ad Age writes, Yahoo's product placement was a solid success, "After the ice cream challenge during the second season, viewers were told to go search Yahoo, and “Within three hours of the end of the show, the term ‘Apprentice Ice Cream’ was the third-most-searched term on Yahoo that day. By 5 o’clock the next afternoon, the ice cream was sold out,” says Yahoo VP Jim Moloshok. And the results kept coming. After the Levis challenge, “[f]our days after that episode ran, viewers were still searching Yahoo avidly for ‘Apprentice Jeans’ to get a copy of the catalog. And "Apprentice Jeans" was still ranked No. 1 among Yahoo Web searches,” AdAge reports. Using secret tracking devices, Yahoo discovered that “The core demographic for the ice cream was 21 to 34 years old. For the jeans, it was 35 to 44.” Yahoo VP Moloshok says, “If you can complete the loop, product placements like Mark Burnett is doing are one of the most effective ways to get people engaged with a product.”
Now CNN like MTV Flux are taking "reality" one-step further implementing an infrastructure for user-based content.
Advertising Age - MediaWorks - Dell to Sponsor CNN's 'Citizen Journalism'
NEW YORK (AdAge.com) -- At a time when much of the digital media world's focus is on how to monetize user-generated content, CNN has signed Dell as a major sponsor of its foray into citizen journalism -- iReports and the CNN Exchange program.
Guardian Unlimited Business | | MTV hooks up with Google
MTV is to supply segments of its programmes to the thousands of websites and blogs affiliated with search giant Google.
News Corp. sculpting bold plan for growth
Excerpts:
News Corp. in the past 12 months has been forging media's future by buying and riding the likes of social networking leader MySpace.com and video gamer IGN to meteoric heights while also enjoying record performance levels at its core broadcast and cable television, film and print operations, even as they struggle to reinvent their business models.
CinemaTech: From AlwaysOn: `How Far Will Consumer-Generated Media Go?'
New York Times writer, Scott Kirsner, stopped in at the AlwaysOn conference at Stanford and posted a report about the panel 'How Far Will Consumer-Generated Media Go". The panel featured YouTube co-founder Chad Hurley, the CEO of MP3 Tunes, and execs from Yahoo and Sony Pictures Digital Entertainment.
While I do believe distribution becomes more fluid with the continued evolution of digital technology along all points of the media supply chain, I do not believe that digital technology will democratize film making. Multinational corporations and conglomerates have the scope and capital to market and distinguish their product from the glut of global competitors (whether that competition is created by Chinese manufacturing or American independent filmmakers). Certainly the segmentation or "narrow-casting" currently developing with the expansion of world-wide cable and the internet creates spaces for creative expression produced, say, less expensively with digital technology; however, outside of those exceptions eventually marketed to broader audiences, digital technology will not disturb media firms' control over the organs of distribution. The question ALWAYS remains: Who reaps the benefits of copyright? Is it the content creator or the media firm that owns the intellectual property that the content creator sold to the distributor for a profit?
Indeed, media firms may be held captive at choking points along the supply chain - a consequence of handing their brands over to stars or whomever - but media firms are more apt to forge strategic partnerships or acquire internet portals like Amazon et cetera, then wither away and die. In an economic environment starved for content, the power does shift to the content creator or more specifically, whoever owns the copyright, but corporations are the ones most likely to benefit from this paradigm; because they can exploit their natural economies of scale. The myth of democratizing filmmaking is techno-utopianism. The creative economy needs a mixture of small, medium, and large size creative industry firms.
Excerpts from CinemaTech:
Every Oscar for Best Picture since the first Academy Awards in 1928 has honored a motion picture recorded on film from the Eastman Kodak Company. Since the dawn of the motion picture industry, Kodak has served as a driving force in filmmaking science and technology, providing negative, print, and sound film, digital intermediate post-production work, and digital cinema products and services. In a November 2005 Lehman Brothers Equity Research Report, analysts Sabbagha and Talbott, estimated that Eastman Kodak earnings from entertainment film revenues were $1 billon annually, forty percent from their origination stock and sixty percent from their print stock. I wanted to learn more about how Kodak intended to protect is legacy brand in the midst of the emerging digital motion picture marketplace. Last month, I spoke with Bob Gibbons, Director of Marketing and Communications at Kodak Digital Cinema.
Alexa O'Brien
How has Kodak been preparing for the digital marketplace in regards to motion picture film?
Bob Gibbons
Let me just give you my view of digital cinema, because I have been involved with it since the beginning at Kodak. Around 1980, probably around the time of Disney's TRON, postproduction started going digital. The problem with computers in 1980 was that you needed a lot of power. You needed silicone graphics. Even if you had big computers, the quality of the postproduction, the special effects and so forth, was far less than film quality. So we said, why don't we come out with some sophisticated scanners and recorders to help maintain the quality of the product? So, we came out with a brand called Cineon. We also opened up a laboratory so we could improve those products and that was Cinesite, an effects company. As it turns out, other people started to come out with products. Pretty soon, there was a lot of good quality capability out there. Prices came down and there were more competitors in the marketplace.
Then we said, maybe we don't need to be in the product side of things. Maybe we ought to be in the service side of things, and continue to do effects. So we have two digital service companies: one in Hollywood called, LaserPacific, and one in London called, Cinesite that has done effects for Harry Potter and Narnia.
MPAA U.S.Theatrical Market: 2005 Statistics[PDF]
Excerpts and Highlights:
In 2005, total domestic box office remained near $9 billion, a barrier broken in 2002 for the first time. Global box office remained steady at over $23 billion, just shy of the all time high in 2004 of $25 billion and 46% higher than the 2000 mark of $16 billion. U.S. theater admissions decreased 8.7% in 2005 to 1.4 billion.The number of movies released remains on a growth trajectory, with total releases topping another all time high of 563 versus 528 in 2004, growth of 7%.
New releases by the major motion picture studios (MPAA members) grossed an average of $37 million in 2005, an increase of 7% over the past five years.
A major component of the annual box office was the performance of blockbusters, which remained comparable to prior years in total box office. A new all time high was set in 2005, with eight movies grossing over $200 million, three more than in 2004, and five more than 2000, a great milestone for the industry.
The average cost to make and market a film in 2005 remained under $100 million and dipped slightly to $96.2 million. Marketing costs were up 5.2% and production costs went down 4% from the previous year. MPAA member companies spent more on network television and Internet advertising and less on newspapers and local television.
