Wednesday, September 28, 2005

It's not just Murdoch investing in the Internet ...

While News Corporation boss Rupert Murdoch has been prominently investing in internet media firms, he's certainly not the only one. Other big media corporations, including Viacom and Time Warner, are also pursuing aggresive interent acquisition strategies. The Benton Comm Policy listserv notes a Wall Street Journal piece (Story here but requires registration) that highlights how all these corporations "are spending billions in a spate of acquisitions and aggressive Internet initiatives, and are likely to keep on spending." Why are they doing this? In a nutshell, it's the fear of being left behind by new media as audiences migrate to the internet--potentially prompting advertisers to jump ship. The piece goes on:
    Some hope to directly challenge the giant portals like Yahoo Inc. and Google Inc. -- Web sites that serve as gateways to the Internet. Others are transferring some of their most valuable content to online sites, even though that risks alienating their traditional distribution partners. Although it's too soon to say whether the media industry's latest approach will bear fruit, the companies are finding some areas more fertile than others. They have been investing heavily in youth-oriented Web sites, like gaming, and less in areas like prime-time entertainment programming that is still a cash cow for the television networks. They're also mostly avoiding the pay-per-view model, which hasn't yet gained traction online.

How worried should the media corporations be? Quite worried, if a new report from the Center for Media Design at Ball State University is to be believed. The study, reported by the Christian Science Monitor, tracked "the behavior of 394 ordinary Midwesterners for more than 5,000 hours, following them 12 hours a day and recording their use of media every 15 seconds on a hand-held device." It found that people were involved in some kind of media interaction for more than two-thirds of their waking hours. About 30 percent of this time "was spent using media exclusively, while another 39 percent involved using media while also doing another activity, such as watching TV while preparing food or listening to the radio while at work." TV watching remained the most popular media activity, taking up about four hours of every day for about 90 percent of those studied.

But what about the interent? Well, three-quarters of the subjects used a computer--typically for more than two hours per day--and most of that time was spent on the internet. The report notes: "As, over time, the computer becomes a vehicle for more rich media content (often related to TV programming), the line between the two media is likely to blur further, calling into question the TV-centric mindset."

And the lesson for advertisers:
    You'll need a "holistic" view of media. "If you're advertising in one medium, you can complement the message by combining it with another medium" [vice president for Time Warner Global Marketing Jane] Clarke says. "The findings suggest creative ways to combine and package media for advertisers to get their messages to consumers."

    Advertisers might want to look more closely at less-conventional forms, such as computer software and mobile phones, as new advertising media, Bloxham says. Overall, the study concludes, "From an advertising perspective, there is good news and bad - both an array of new media outlets along with the challenge of more outlets competing for attention."

    Defining media broadly, including mobile phones, was definitely the right approach for the study, [director of the Institute for the Future Paul] Saffo says. "A cellphone is no longer just a communication device, it's a media device," he says, one on which people enjoy music, share photographs, and even view video clips, suggesting that the new industry might be called "Cellu-wood."

So the big media corporations are right to be worried. Keep on investing, guys!


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