Forget your antennas; you're local content providers first, advises researchers
Sep 25, 2007 12:04 PM
Digital rights management (DRM) will evolve over time from focusing on conditional access and content protection to include content monetization, says Frank Dickson, MultiMedia Intelligence chief research officer.
A new report from MultiMedia Intelligence forecasts the slice of the advertising revenue pie taken from IPTV, Internet TV and mobile TV will grow from less than 4 percent this year to nearly 20 percent of all media advertising dollars in 2011.
Rick Sizemore and Frank Dickson, authors of “Advertising & Technology Collide: Semiconductor Companies, Technology Providers, Media Companies and Ad Agencies Partner to Move from Disruption to Monetization,” assert that traditional media are under assault from “rapidly changing technology and user behavior.”
IPTV Update spoke with the pair to learn more.
IPTV Update: In your new report, you say the $185 billion dollar TV ad industry is now in the cross-hairs of the technology industry. While technology can cause disruptions to traditional TV advertising models — i.e. DVRs and commercial zapping, VOD, etc. — is this necessarily bad for the television industry, or can the same technology be used to open up new revenue opportunities?
Rick Sizemore: Technology is a double-edged sword. Technology has played a key role in making things better, faster and cheaper. However, technology has also been highly disruptive to the status quo. The digital video recorder drove the trend of nonlinear consumption of TV, empowered consumers and is promising to cripple traditional TV advertising models. The Internet takes the DVR to the next level by not only putting consumers in control of what and how they consume content, but also integrating community, participation and interactivity into the media experience.
While technology is proving disruptive to traditional advertising and media business models, new opportunities abound.
While technology is proving disruptive, new opportunities abound, according to Rick Sizemore, MultiMedia Intelligence chief strategy & development officer.
YouTube and MySpace are drawing unique visitations that dwarf the Internet presence of established media properties. Google has captured the first wave of “Web 1.0” advertising via its successful search engine, and is targeting the “Web 2.0” advertising wave via its acquisition of YouTube and others. New markets for mobile advertising, Internet TV advertising, in-game advertising and networked digital signage are emerging as significant opportunities for television and media companies.
IPTV Update: You identify a strategic choice content owners must make between control versus reach. How so? Hasn’t the history of the Internet and content basically been about losing control whether a content owner wants to or not?
Frank Dickson: Syndicated and viral distribution of content via the Internet, social networks and user-generated sites provides the broadest reach and empowers consumers. Yet, this model strips the control of media distribution from content owners and disrupts existing business models. Tightly controlled and narrow licensing of content for Internet distribution maintains control, but flies in the face of new consumer expectations. Media companies now have to examine both new and existing business models to evaluate what makes sense and what business models have run their course.
The Internet has a history of democratizing content, or, in other words, distributing content freely while ignoring the obligation of compensating the content owners for the rights — an ugly but true rule. However, advertising has proven to be a very effective method for funding “free” content while compensating content owners. As a result, digital rights management (DRM) will evolve over time from focusing on conditional access and content protection to include content monetization.
Advertising without concrete measures is useless. DRM cannot only provide a real time feedback loop via the Internet but also allow for the capture of valuable demographic information. Content monetization is the next stage for DRM; call it DRM 2.0, to use a badly abused naming structure.
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