Still Destroying Major Markets; Internet Turns 30

The Internet was more or less officially born Jan 1st 1983. Back then I was just out of college selling advertising for a major London magazine using a rotary dial phone and paper index cards. It feels like a million years ago. Back then we enjoyed creative content through, commercial soaked radio stations, dead tree products like newspapers, network TV, vinyl records or tapes and VHS all of which we paid through the nose for through commercials or fairly large stacks of dollar bills. The networks could deliver vast prime time audiences, record companies, newspapers and movie makers were rich and powerful media giants and if you wanted to find something you had to go look it up at the library. A year or so later as a wet behind the ears sales guy if I wanted to send a sales letter I dictated it to a secretary and send it by snail mail.

As we start 2013 we are looking at a radically different landscape. Mobile will probably surpass desktops in terms of users and search, music has devolved to a medieval state where the only way for minstrels to make money is to play live for a line audience and movies are headed that way too. Newspapers are barely worth the paper they are printed on, the yellow book industry is almost gone, content piracy continues to impact multiple markets and as always the web mediates these processes. In spite of the fact that Google removed over 50 million URLs from their results last year (mostly in response to appeals from RIAA) it’s results continue to be chock full of pirated content and the sites promoting “sharing” through torrenting continue to feature ads served by the major search engines and ad networks.

An interesting side effect of this slow rolling revolution is the impact of the web on advertising as a whole. For example; I recently purchased roughly 75 episodes of Big Bang Theory on iTunes to watch on long flights. Each episode costs about $1 and buying them saved me watching or zapping through roughly 15 hours of ads. I have seen believable data which puts my value as an ad viewer at about 5c per 30 second commercial. That mean that by spending $75 to own the content the network lost about $18 of advertising, a pretty good deal for the network even factoring in fees to iTunes etc. This equation of trading dollars for interruption through platforms like iTunes, Netflix and Amazon Prime will likely continue to drive the advertising world half insane in 2013. Add to that that the pervasive but confounding social media it’s clear that the Internet will continue to confuse advertisers who traditionally move at a glacial pace.

At the same time the web has obliterated music, yellow books and newspapers it has given birth to massive new markets, freed us from the sway of media giants who often don’t have our best interests at heart, facilitated real social and political change and as a bonus allows us to live pretty much commercial free if we choose to. It has put the information of a large chunk of humanity at our finger tips and allows us to be much more connected with family and friends if we choose to be. I experienced this myself just last week in London. By some oversight I didn’t have the UK added to my data roam program, so I found myself in London unable to call, search, navigate or email for as long as it took me to resolve with Verizon….about 6 hours. Those were 6 of the most uncomfortable and confounding hours I have experienced recently. After 30 years the Internet married to mobility has truly addicted many of us to the point where being without it is just about unthinkable. Hi, I’m Tim and I’m and Internataholic….Hi Tim!  Here’s to the next 30 years

The Great Media Game

It’s not the first time I can recall that Google has run an ad on the blank front page of Google.com but it’s certainly the first I can recall in a long time. The ad is (naturally) pushing their new 7″ tablet the Nexus 7. The new device has great reviews and at $199 it’s aimed squarely at the Kindle. Aside from the overall weirdness of having a huge ad on the front page the Nexus is an interesting departure for Google and another facet of what I believe is a much bigger media game.

For years we poor media consumers have had to put up with roughly 20 minutes in the hour of commercials…often poorly produced and repetitious. As a rough number I have seen the case made that for every hour of TV you watch advertisers are paying about 30 cents for access to your time. Then Satellite radio emerged with ad free music but horrible ads on their speech channels. Then came Pandora and a range of competitors offering essentially ad free or nearly ad free listening. Now we have Hulu, Hulu plus, Amazon Prime, iTunes and a range of video on demand offered by cable companies. The ad free content offered in many cases tends to be a little less current than prime time but if you don’t mind seeing earlier episodes or last quarter’s movies you can get a ton of pretty good content for about $20 a month, pretty much entirely ad free. Interestingly you can get almost everything you might want to watch except tonight’s new episodes live entirely without your cable provider. My youngest son recently took occupancy of his new off campus apartment and he’s proud to live a cable TV free lifestyle, no doubt he is an early adopter but it’s an option which wasn’t even available until quite recently.

So if you can live without tonight’s episode of Dancing With The Stars you can trade commercials for $20 and also get access to lots of content which wouldn’t be normally available. Catalyzing this dramatic shift in behavior are several key drivers including immersive high speed internet/wifi, mobile devices like the iPad or Nexus 7  and technology which seamlessly transfers content to the large flat screen which is a feature of pretty much every household in the US. It took about seven years for the flat screen to go from expensive luxury to commonplace. It’s taken less than two years for the tablet to make the same transition. The explosion of content sources (HuLu, iTunes etc) and the wireless integration technologies (Apple TV, Roku, Slingbox, Boxee etc) have all happened in just the last nine months. The adoption curves are shortening in real time.

We aren’t (yet) at the point where we can access all the content we want commercial free on any device in the house or outside for a total cost of about $100 per month…but I believe that’s visible from here.