Recently in Emerging Markets Category

Advertising on internet soars as world follows British lead-Business-Money-Broadband-TimesOnline  Annotated

— Google unveils its first big assault on television today through a deal to supply adverts to EchoStar, the US satellite network. The internet giant will run auctions for advertising spots on channels such as Discovery, CNN and MTV, which are carried by EchoStar to 13 million US households.

United Press International - NewsTrack - Entertainment - 'Spider-Man 3' opens in China before U.S.  Annotated

"America has never been less influential, and nobody needs to understand that more than Americans."
-from Frontline World, "News War"

According to Greg Barker, the U.S. State Department has 30,000 employees, of that only twenty are fluent in Arabic and another 150 conversant. Television is as much entertainment as it is a weapon, and television networks complete for market share as much as they compete for political influence.

Assuming the trend toward long tail marketing comes about, effecting the growth of a plethora of content niches and fluid distribution, tell me, how will this effect the social dimension and disruptive factional power of art and ideas?

Lest we forget, creative content has a social impact as well as an economic value. I have always argued on this site, that media and entertainment sectors are undervalued assets in the American consciousness (both in terms of the economy and in terms of their social benefit in a global war of ideas).

"The latent causes of faction are thus sown in the nature of man; and we see them everywhere brought into different degrees of activity, according to the different circumstances of civil society. A zeal for different opinions concerning religion, concerning government, and many other points, as well of speculation as of practice; an attachment to different leaders ambitiously contending for pre-eminence and power; or to persons of other descriptions whose fortunes have been interesting to the human passions, have, in turn, divided mankind into parties, inflamed them with mutual animosity, and rendered them much more disposed to vex and oppress each other than to co-operate for their common good. So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government." -Publius, Federalist No. 10, Federalist Papers

Cable television is undergoing worldwide expansion, especially in the Arab world. 

I have previously spoken on The Second Sight about "cultural crossover content", in other words, the growing market for, say Bollywood movies, in western countries including the United states - first from immigrant and first generation Indian Americans - followed by the trend towards becoming part of mainstream culture.   See NYT's article on the  red carpet, New York opening for the recent Bollywood release, Guru. American children take globalization for granted.  Japanese anime is as much a part of their pop culture as it is to children in Japan.

I firmly believe this trend towards "cultural crossover content" will increase as the game generation ages and media firms continue to exploit emerging foreign markets.  I have highlighted some of this under the catagory (of the same name) here at The Second Sight.

More specific to this entry's title, I was recently informed of a wonderful Arab media and entertainment link sahafa.com .  More on that market later.

Forgive me readers, for I have sinned. It's been over a month since my last blog entry. For penance, I promise to watch FoxFaith's new Christian thriller, Thr3e. As Jeff Shannon of the Seattle PI writes, "If 'Thr3e' is any indication of what we can expect from the emerging trend of studio-funded faith-based movies, we may find ourselves wishing "The Passion of the Christ" had been a box-office bomb." Have faith Jeff!

But the real penance would not be complete if I did not take a lesson from Fox's Murdoch on "market retention". What, pray tell, do I mean? As Joanne Ostrow put it, the same cynical Hollywood "where plastic surgery is considered a sacrament" has now found that Christianity sells.

As some of you may know, I split time between Charleston, South Carolina and New York City. Yesterday, I received a direct mail post card from the FoxFaith company itself. Obviously, I wasn't in New York. I raise the point only to re-emphasize (see here and here.) the brilliance of Fox News Corp., who discovered "long tail" marketing years before the term was ever coined by Chris Anderson. Rupert Murdoch, " Me love you long tail."

Where other media firms (Pixar and Disney excluded) have relinquished their brand to stars, Fox has not only retained its brand, it continues to exploit it for it's own gain. You may have a political bone to pick with Fox News, but only because you are aware of their branding. This company understands market retention. This idea is actually quite foreign for many media firms in an age of disposability. Most corporate strategies emphasize market "capture" but not "retention." Fox News Corp. understands both.

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No iTunes Movies For Asia

Excerpts:

"Fears of fueling the rampant movie piracy business in places like China and Hong Kong likely prevents Apple from offering movie downloads in most of Asia."

"Licensing agreements also have caused problems for Apple, as recording labels in Japan have shunned iTunes in favor of other outlets. A weak presence in the rapidly expanding Asian Internet market keeps Apple from profiting from that userbase."

"'We cannot comment on the specifics but it is true that iTunes is not available in Asia,' Tony Li, Apple's marketing director for Asia, said Wednesday. 'That goes for music and movies.'"

"Without iTunes in Asia, there is little motivation for consumers there to purchase an iPod. China's Internet userbase has been estimated at over 100 million people. It's hard to believe there aren't enough of those users willing to try iTunes and buy an iPod to make it profitable for Apple."

Apple rules out iPod movies for Asia - Yahoo! News

Excerpts:

"The California company launched the latest addition to its hugely successful Music Store online download service in the United States this week, offering scores of movies old and new owned by the Disney corporation."

"In the Asia-Pacific region, iTunes is available only in Australia and Japan, the world's second largest consumer of music after the United States. Even in Japan, some labels have refused to allow their songs onto the service."

"The new movie download service will allow US users to buy current movies for 12.99 dollars in the first week of release and 14.99 dollars after through the iTunes programme. Archived movies will sell for 9.99 dollars."

"So far only movies from Disney -- including films from Pixar, Touchstone, and Miramax studios -- are available but other companies are in negotiation to provide content."

"Through iTunes, Apple has about 70 percent of the music download market."

Bollywood dreams grow bigger : HindustanTimes.com

For several months, I have mentioned the growing swell of interest in cultural cross over content between the U.S. and Bollywood.  Saibal Chatterjee gives us the run down of the latest deals and production slates for co-productions between the two largest movie markets:

Excerpts:

For years, the Bollywood production sector has been laying claims to imaginary global conquests.

[A] couple of Mumbai film production houses seek to expand their universe by going in for tie-ups with important Hollywood players.

News From broadcastbuyer.tv - MediaSys Becomes Quantel Partner For GCC Gulf States

Excerpt:

“We’ve been actively looking for high-end post products to complete our portfolio and with the anticipated growth in DI and the Post market in the GCC, Quantel’s products are a perfect fit,” said Bejoy George, MediaSys Managing Director.

MySpace cowboys - September 4, 2006

Most likely fresh from reading Joe Studwell's China Dream, an anonymous Hollywood executive was quoted by LA Times writer Bruce Wallace in December 2005, saying, "People have been waiting for China to open up since Marco Polo."  " It is wrong...to assume that just because the Communist Party is slowly relaxing its grip over its markets that China will someday become an open media market. 'People forget...It's not just a Communist Party thing. It's a Chinese cultural thing.'"  China will never buy from you.  They'll copy your IP and sell it to their own markets. 

In the same article Wallace goes on to say:

Rupert Murdoch, who in early 2004 gave a speech proclaiming that "the potential for China to become a new global center for media and entertainment is slowly becoming more real." By last September, one month after Beijing's decision to re-tighten regulatory controls on foreign media, Murdoch was publicly lamenting that News Corp.'s China business had hit a "brick wall." When it came to foreign media, he complained, China's political leadership was "quite paranoid about what gets through."

All this reminds me of what Simon Cowell remarked to Larry King in March this year when asked about the prohibition of "American Idol" like shows in China.  Says Cowell:
 

"Well, because it's a democracy, isn't it? You know, I mean, it's the public voting. So you can understand why they're getting slightly nervous about it. Because it wasn't our show in China, it was the laughing cow, so-and-so, so-and-so competition. And the public got to vote. And suddenly there were demos, and it was democracy. And I think the government went, we don't want this. So then they put out a stupid comment like that. You know? It's that we must control the public. Crazy.

I am not a China believer, yet.  AP reports on Chinese TV stations rampant piracy.

Chinese filmmakers accuse TV stations of film piracy

Excerpts:

BEIJING — Chinese moviemakers are accusing Chinese TV stations of becoming part of the nation's thriving movie piracy industry.The Chinese Movie Copyright Association says TV stations here air up to 1,500 pirated Chinese movies a year, costing studios up to $9.4 million in lost revenues, the official Xinhua News Agency reported Sunday.

Indiantelevision.com's interview with UTV Founder & CEO Ronnie Screwvala

Excerpts:

UTV founder-promoter Ronnie Screwvala has shown again and again that he is a smart dealmaker. He got a string of private equity funds and News Corp. to invest in his TV content company which had successfully expanded into a diversified media model

But nothing can get him more excited than the latest deal he cut out with Walt Disney. The buyout of Hungama TV ($30.5 million) and a 14.9 per cent stake in UTV ($14 million) has given him the potential to build a war chest of Rs 5 billion. "In media, that offers lots of opportunities," he says.

On Screwvala's expansion plate is not just movies and animation but also new media content including gaming. The fun, as he says, is playing in a bigger field.

In an interview with Indiantelevision.com's Sibabrata Das, Screwvala talks of the business model he has carved out for UTV's second phase of growth and the script his company plans to write with Walt Disney.

East West Magazine - India Ink

Digital trail on silver screen

Excerpts:

Hrithik Roshan’s latest flick, Krish seems to have opened a new digital window for Bollywood. As it mopped up Rs 70 crore in the first week of release – considered the biggest opening in the history of Indian cinema – it is leaving a trail behind.

Analysts predict a big part of tinsel town’s growth, expected to touch Rs 15,000 crore by 2010, will come from digital cinema and multiplex boom in the country.

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'

News Corp. sculpting bold plan for growth

Do you watch a film 'coz a 'prosumer' said so?- The Times of India

Business Standard - Disney in India

There are roughly 130 million television households in Western Europe.  In the United there are roughly 99 million.  However, Western Europe is not a unified market, while the U.S. is.   U.S. broadcasters can benefit from the economies of scale and therefore the  U.S.  dominates cultural copyright exports to Europe with its sizable trade surplus.

Will the growing segmentation and narrowcasting of television and the Internet erode this dominance?   How will the  intermix of television and the internet contribute to this?  I ask myself these questions.

I believe U.S. media and entertainment are undervalued assets in the American economy.  It trendy to say that American films are of poor quality and that our media is valueless.  Certainly, the media may deserve criticism for becoming in some respects the "un-ratified fourth branch" of American government.  However, outside the context of THAT discussion, U.S. media and entertainment industries are the only U.S. sectors that boast a surplus balance of trade with nearly every nation in the world.  That deserves some attention, consideration, and respect.

Creative copyright industries will always engender debate as to their cultural and social effect.  Since these industries are at the core of the emerging global creative economy we can expect these discussions to become more heated as time goes on: whether the topic be American movies, Disneyland, or cloning.  The point I want to make is this:  These debates about cultural effect  can also overpower our discussions about these sectors' legitimate economic benefit.  Many countries may also use these debates as smoke screens to cover up their protectionist policies. 

Media heir wants 'Airbus of the web' - Financial Times - MSNBC.com

Excerpts:

Christoph Mohn, the heir to the Bertelsmann media empire, has called for Europe to create an Airbus of the internet, to compete with US giants such as Google and Ebay.

MOTION PICTURE ASSOCIATION HOSTS LANDMARK FILMMAKING WORKSHOP IN CHINA [PDF]

Excerpt:

"Beginning, Sunday, March 19, the Motion Picture Association (MPA) will host an intensive filmmaking workshop aimed at helping encourage and refine the sills of 40 Chinese producers and screenwriters...'Our goal in organizing these workshops in Beijing is to work with SARFT to help the local film industry work toward realizing the potential of a successful, legitimate film market that to date, has largely remained untapped."