Wednesday, October 24, 2012

College Basketball and the Universal Truth of Marketing

It's all about marketing.  At least that's what I've come to believe living in the second decade of the 21st Century.  It doesn't matter if it's a sexy brand like Apple, an industrial piping distributor, or a University - everyone needs solid marketing.  Most of us think about marketing in terms of selling a product.  In college basketball, that usually means tickets.  However, this is a great example of how it is actually so much more.  Those of you who know me, have gathered by now that I am a huge University of Arizona sports fan.  This is especially true of U of A basketball.  I regularly check in on the local headlines in Tucson to see what's going on with the team.  A few days ago, I was fascinated by one paragraph in the local AZ Star sports section.  The funny thing about it, is that this paragraph really had nothing to do with with any actual in-game activity.  Rather, it was about how Sean Miller, the head coach of the basketball team, approaches his role as a coach.

When he came to the U of A from Xavier, he brought with him a philosophy of hard work, smart ball handling, gritty defense, and, uh Marketing.  In fact, he has unofficially assumed the role of Chief Marketer along with his many other duties that involve actually coaching the players. The reason he takes marketing so seriously can be explained in terms of talent.

For him, the equation looks something like this: More ticket sales equal more fans equal more impressed recruits equal more big commitments equal more potential success in the future

Let's take a look at his tarket market, these are 18 year old kids, most of whom think of academics as an afterthought.  They choose a school based on the perceived ability to propel them to professional fame and fortune.  Most of them are being courted by programs all over the country (and sometimes internationally).  Recruiters need their message to resonate with the athlete   The spectacle of Arizona's Red and Blue scrimmage, bringing in Arizona Alumni like Steve Kerr, Sean Elliott, Tom Tolbert, Andre Iguodala, etc. in a packed arena, are an attempt to show these kids the kind of success they can have.  Yeah, it sells tickets and pumps up the fans to buy more season ticket packages, but it's really a way to sell the recruit on the program.  Miller has even take to Twitter as a way to connect with the younger generation.  Many tweets, you'll notice, have an angle.  These are carefully planned messages designed to attract positive attention to the program.  

Despite the fact that the Arizona program has been down (which is a relative statement for fans with high expectations at the U of A) for several years, Miller has managed to recruit nation-leading talent to the program - lead, in part, by the Marketing effort.  He's convincing them that it's not just a basketball program, but a family and a way of life.  He's selling them a lifestyle.  Well, I for one hope that Miller's "Gold Standard" (more branding by the coach) continues to bring success to the team.  In today's uber-competitive college sports market, Coach Miller will need to utilize every tool possible, including the marketing, to get on top.  Bear Down coach!

Friday, October 19, 2012

Hollywood's Digital Trends for 2012

Well, Digital Hollywood's Fall visit to Los Angeles has come and gone.  I was fortunate enough to get to sit in on 3 days worth of sessions.  Topics from these sessions ranged from Social Media to Connected Television.  Here's a summary of what I took back from the experience:

Social

The common element, pervasive in every session at Digital Hollywood was Social Media.  The media and entertainment community is fully entrenched in social media.  Whether it's sports programming like the NFL or MLB, reality competitions like X-Factor and The Voice, theatrical productions like Hunger Games, or broadcast programming like Pretty Little liars, social media is having a big impact on the industry.  It is being used to engage audience like voting for a contestant on a game show.  It certainly is being used to promote a show using all the popular platforms like Twitter, Linkedin, Facebook, Pinterest, and Get Glue.  It is also being used from an analytical perspective to help Theatres add showing of movies like the Hunger Games that exploded in social activity in the final weeks leading up to the premier.  Interestingly, it is also being used to manage fans.  Further, social media allows marketers and customer service to augment their resources with free assistance from "super fans" who actually answer questions, thwart negative criticism, and drive attention to creative productions.  They do this for little reward, usually just recognition and their own passion for the project.  This is an amazing outcome of social media.

While there was agreement that social media is playing a huge role, there was a bit of disagreement in the types of social media that had legs.  Some seemed to think that middle-man applications like GetGlue, Foursquare, etc. wouldn't survive in the future.  The technology used in these programs would be mimicked or purchased by the brands or the larger social platforms.

The "second screen", on the other hand, didn't have much disagreement on its importance in the consumption experience.  Every major brand is developing a second screen application.  Whether it's a game, a portal to access additional information on a program, or a mode of interaction with the program, second screen applications are being treated like an extension of content, complete with additional advertising sources.  It is becoming so important, second screen capabilities are being written into production contracts.  This is a big deal.

Mobile

Mobile is huge.  There are twice as many mobile devices out there as there are desktop computers.  The disparity between the two will only grow in the future.  As mobile becomes ever more popular, resources are being committed to provide the ability to deliver to these devices.  There are some challenges.  Advertisement delivery to mobile hasn't yet been figured out.  There is actually a bit market instability as demand for mobile advertising seems to exceed the supply.  Arbitrage is taking place in this arena.  This is likely to smooth out over time, but there was an overall tone of opportunity in this department.

Personalization

The personalization of the web has some unintended consequences.  Named "The Filter Bubble" as well as the "Echo Chamber", the ability to personalize and filter our media experience is reducing our exposure to messages outside of our preferences.  This creates a bubble like effect that could actually make us more ignorant.

That being said, complete personalization is not there yet.  For example, the Netflix/Hulu account for a family television is not able to distinguish the family member holding the remote.  Mom may get Bobby's preferences, and Bobby may get Dad's preferences, which makes things less convenient.  We could see this change in a hurry as most predict that the tablet and smart phone will replace the remote.  This, of course, would allow the recognition of the device to kick in.

With all this personalization, people are now being inconvenienced by logins, and submitting password information to multiple sites.  With API's, things like Facebook Connect allows us to login with Facebook, and remove connections through Facebook if we lose trust in another application.

Finally, the mobile movement has caused the web to simplify.  People are no longer enamored by graphics, animations, and complexity.  They are actually annoyed by them.  People want a simple interface that makes it easy to perform specific tasks.  They still want it catered to them, however.

Storage

Storage is another trend.  The new HD and 3D formats take up space.  Media companies are searching for ways to make storing data more efficient.  For example, Disney currently has around 14 petabytes of data in storage on the lot.  They have the capital to handle it.  Smaller media companies don't have the resources available to manage the bandwidth and storage needs of their productions.  This is why the cloud model is becoming more and more attractive.  Companies like Amazon, Mozy, Dropbox, etc. are able to lease their masses of storage servers as a services, which makes things a lot less complicated for the brands.

Security still remains an important factor here, but the technology around the transportation and storage of data is quickly improving.  There was a bit of disagreement in whether or not the set top box was a necessary security component to delivering content.  Obviously the cable guys were in favor of the box.  However, there was an equally compelling argument that software is able to do the same thing as the box, and not clutter up the entertainment stand in the process.

Physical storage was another topic.  The UltraViolet brand produced by the Digital Entertainment Content Ecosystem (DECE) seems to have a lot of promise for those wanting to reduce the space taken by the DVD collection.  A rights management system at the core, UltraViolet gives hope that one day all of our DVD collection can be stored in the cloud, and remain there, safe from damage, theft, or loss for the rest of our lives.  Currently, companies like Walmart (Vudu) allow people to bring in their physical DVDs and convert them to an UltraViolet title stored in the cloud.  This is just another example of the general consensus that hard drives and disk space will be a non issue in the future.

Production and Distribution

Overall, technology has evolved to the point where almost all devices are able to store, stream, and play video.  Quality short form and long form content is valuable to all types of brands.  The main challenge seems to be in distribution.  On that note, distributing content is becoming easier and easier with today's technology.  The term used for this was the "democratization of distribution".  Services like paya.com allow producers to set rules for licensing and commerce.  This means that you don't just have to go through the big guys like Apple (iTunes) to sell your content.   On the same token, production costs are going down.  Equipment and tools are affordable and accessible now more than ever.  This seems to indicate that platforms like Youtube, Vimeo, etc. have an opportunity to capitalize on the growth of lower (and even higher) budget productions if they can perfect the distribution of them.

Metadata

Metadata was a big topic of discussion in multiple sessions.  Metadata sets the stage for the discovery and search-ability of content.  However, companies are challenged with Metadata entry.  Automated methods like content recognition (ACR), and closed captioning are a step in the right direction.  However, significant manual effort is needed to input metadata into content.  This becomes more daunting on full length features when frame by frame metadata is required.  Crowd sourced metadata was one potential solution, but this method runs the risk of reduced control over entry quality.

Competitive Differentiators

It was interesting to see the differences in opinions regarding core competencies.  There was really no agreement on what companies should be focusing on.  Netflix, for example, does their own encoding.  They also focus on their own user interface and search methodology as their core competencies.  This was rather surprising as I would have thought that the storage/delivery aspect would have been the differentiator.  Encoding.com provides transcoding services for media companies to outsource.  Their growth suggests that more and more companies are outsourcing this component as an activity that is not part of the core competency.  There was also some disagreement about the user interface (UI). There is a movement by cable companies to ditch the tvguide service and build their own listing and search platform.  Others argued that this could be simplified by simply going with a Google Search type of model that is used by GoogleTV, or a queue model used by Hulu.  Perhaps the answer is somewhere in between?

Changing Business Models

This is one topic that seems to have a bit more clarity now than even a year ago.  The business model employed by MSOs of providing a multitude of channels for one recurring price is being tested.  Youtube has sunk a lot of money into its "Channels", urging celebrities and producers to create quality content for free (ad supported of course).  New applications like HBO Go have planted the idea that purchasing a one-off channel will, indeed, be an attractive option for brands.  Of course, this will have to run its course as it was also noted that most networks hold long term contracts that will run throughout the rest of this decade.  Regardless, the technology and demand seem to be at a point where we can pay for our own lineup of channels a la carte.

"The web may be the savior of the broadcaster"

The other business model that is changing is that of the producers and talent.  Big studios, broadcasters, and agencies are no longer the gatekeepers of value.  The web has changed everything.  Social media and the low barriers to entry have allowed Youtube and social media stars to flourish on their own.  Talent and shows are now able to negotiate deals with agents and studios based on established popularity from the web.  Of course, the linear broadcast and box office are still the money makers, but that model is also evolving.  Dollars are slowly shifting from linear to digital.  The community seemed surprised at the pace that it is changing.  Most thought it would have evolved faster.  Nonetheless, web based programming is commanding more and more dollars and attention.

The Envied

There were a few brands that were mentioned over and over again.  Here they are, in no particular order:

  • Google - With their new channels, capabilities in search and mobile, endless supply of capital, and the desire to bring quality content to Youtube, Google was the envy of Digital Hollywood.
  • HBO - Aside from great content, the idea and technology behind the HBO Go app were raved about at Digital Hollywood.  There was a general consensus that premium, pay for subscription brands like HBO and Showtime are in a better position to do this than ad supported brands.  However, the community is in love with the technology and promise that the app brings to the industry.

Friday, October 5, 2012

Social (Media) Capital and Why It's Important to You

Today's world of social media is rewarding those people that build huge followings online.  Fans, followers, connections, and friends are like a form of currency in social media.  Just like money, having more tends to buy you more.  Those of you who had MySpace accounts in its heyday probably know of Tila Tequila.  She was one of the first personalities that was able to grow relevance in the entertainment industry primarily through social media.  In 2006 she was the most popular figure in all of social media.  She built a profile to over a million and-a-half friends, with a huge gap to the number 2 profile.  Now, if you take an objective step back and think about that, you know she didn't acquire that out of celebrity status alone.  If that were the case then the cast of Friends, Brad Pitt, and every other A, B, and C-lister would have been at that level long before Tila Tequila.  She worked MySpace for all it was worth, and rode that popularity to other gigs in music, television and fashion.  She had either brilliant foresight or great advice from someone in her social network.  Regardless, she has profited, greatly, from those connections within social media.

The term for what Tila Tequila built is called "Social Capital".  Social Capital refers to the collective value of all social networks.  The term has been around for a lot longer than the Internet.  It originally referred to more human social networks like yacht clubs, fraternities, teacher's circles, and high school alumni.  It's based on the principle of reciprocity, that people within a given circle will help each other out.  Now term has been transformed for social media.  You can call it "Social Media Capital" if you like.  It's the totality of all your connections on social media.  This includes Twitter followers, Facebook Fans, Google Plus connections, and yes, even MySpace friends.  Those platforms listed are the most popular, but new ones are springing up seemingly all the time.  Social Capital can be built on any network.  The more popular the network, the more important your connections on that network become.

So the logical follow up question would be "what can I do with social capital?"  Well, there are a few examples out there today.  To think of the value of large social media followings, think of advertising.  Advertisers pay for attention. Whether it's a Billboard on a busy freeway, a popular radio station, or a sporting event like the Super Bowl with millions of people watching. The more "eyeballs" your particular medium has, the more advertisers are willing to pay to be on it.  Brian Solis has coined a term "The Egosystem" and refers to one's influence as the value driver in social media.  The more people your are able to influence, the greater your earning capacity.  Social Media networks are great because you have greater influence over your connections than any billboard or commercial will ever have.  Brands are now paying social media celebrities for tweets.  According to a Huffington post article, Kim Kardashian earns around $10,000 per tweet and Charlie Sheen earns up to $50,000 for a tweet to his audience.  There are even new platforms that are developing payment systems that are based on follower counts (we'll see if those stay around given the new Twitter changes).  I've even heard stories of bloggers using their audience as leverage when negotiating with retailers.  Some people will react based on fear that one will broadcast a negative message about their business to a large audience.  This is, kind-of, the opposite effect, but still an example of influence and social capital.

There are sure to be more innovative ways to use social capital.  I can envision, in the not too distant future, a scenario where follower counts will be common job interview questions.  If you have other examples, I would also love to hear them in the comment section.  The main point is that this stuff matters.  So get out there, build your profiles, connect with people, and make the most of the opportunity.  Your future self will be glad that your current self did.  Good luck!  
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