October 26, 2008

"Wassup" guys are back - From beer to Obama

The characters that starred in "Wassup," the hit Budweiser beer ad campaign from 1999 that boosted its sales and also added a new phrase in the global pop-culture lexicon, are back. However, instead of beer, this time their video is promoting Barack Obama's U.S. presidential bid.

The parody video, created by Charles Stone III, who conceived the original Budweiser ads, was posted on YouTube two days back, and is already on its way to become a viral hit.

This is what creators have to say about their new video:
Its been eight long years since the boys said wassup to each other. Even with the effects of a down economy and imminent change in the White House, the boys are still able to come together and stay true to what really matters.
The video is posted below:

The original Budweiser commercial is below:

Budweiser's maker Anheuser-Busch and its ad agency, Omnicom Group's DDB Chicago, may be in a quandary because they cannot do much to stop the new video's distribution. Neither of them own the "Wassup" concept or the slogan. The brewer paid Charles Stone ~$37,000 to license the idea for five years, and signed him up to direct and appear with his buddies in the Budweiser Wassup commercials, which went on to win several awards. That deal expired three years ago.

October 24, 2008

As live sports on the Internet gain momentum, cricket can provide some pointers

2008 will be remembered as a banner year for live sports streaming on the Internet. Future looks promising as both the user demand and the profit potential seem to have crossed critical thresholds.

Since TV networks don't add to their production costs by simulcasting the coverage online, eyeballs picked up online are incremental gravy for their advertisers. Networks are also convinced that online simulcast won't cannibalize the big bucks tied up in TV, figuring you'll watch online only if you can't get to a TV set, or you'll log on as you watch TV.

Sports programmers therefore want to provide an answer to their fans' demand and keep up with the surge in user consumption of TV broadcast online. The Conference Board/TNS research show that about 20% of U.S. Internet households now watch online TV broadcasts — double the 2006 level.

Here are some major live sporting events streamed online this year and associated metrics, where available:

  • Beijing Olympics: The summer Olympics this year will be distinguished by, among other things, the first truly digital games in its history. In the U.S., NBC, the exclusive rights holder, recorded 1.3 billion page views, 53MM unique users, 75.5MM video streams, and approximately 10MM hours of total video consumed online. Metrics from other countries were equally impressive:

In Europe, over 30 EBU broadcasters offered Olympic content on their respective websites, complemented by the EBU aggregated live video portal www.eurovisionsports.tv/olympics, which delivered over 180 million broadband video streams, primarily generated by live event viewing to a unique audience of over 51 million, with a cumulative total of over 22 million hours viewed.

In China, over the 17 days of the Olympic Games, 153 million people watched live broadcast of the Olympic Games online, with 237 million watching video-on-demand footage and an average 20 million page views per day on the mobile phone platform provided by CCTV.com.

In Latin America, rights holder Terra made 13 online channels available to allow subscribers to choose which events to watch with over 300 hours of available action from all competitions. Terra's Olympic site registered 29 million video streams and over 10 million video-on-demand downloads over the period of the Games.

In Australia, since the Games began, over 32 million page views have been seen by over 2.3 million users, with more than 4 million live and on-demand videos streams watched on Yahoo!7 Olympics.

  • March Madness: 4.8MM unique visitors throughout the two-week U.S. college basketball tournament streamed live by CBS.
  • U.S. Open Golf Finals: 5.2MM streams were served by NBC and the USGA, spurred by Tiger Woods’ down-to-the-wire victory in the playoff that got pushed to Monday - most of these viewers were therefore watching online at work.
  • Wimbledon: 1MM live streams and 4MM video-on-demand streams.
  • Pocono 500: 712,000 streams were watched at NASCAR.com.
All the four major professional sports leagues in the U.S. have also jumped on the live online streaming bandwagon.
  • National Basketball Association Western Conference Finals: 3MM live streams were served by TNT.
  • Major League Baseball: 1.0 to 1.5MM viewers watch a live game each day.
  • National Football League: NFL, the biggest and the most popular sports league in the U.S., in partnership with its broadcasting partner NBC Sports, has for the first time started streaming 17 regular-season games live on the Internet in the U.S. this season that started last month.
  • National Hockey League: Earlier this month, NHL launched NHL GameCenter Live, its new online subscription service that stream live NHL games. Available for $159 for the whole season, or in monthly installments of $19.95, the service is targeted at avid fans as well as, per NHL, nearly 50% of fans who live away from their favorite team's local television market and therefore do not have access to some games on the TV. GameCenter Live does have some blackout restrictions, but allows users to view up to four games at once, choose from multiple camera angles, check stats and chat with one another.
I tested the NHL streaming (the season-opening weekend was free), and think their experience is pretty good because it leverages the uniqueness of the Internet medium in terms of its interactivity, social and non-linear nature.

While most of the above initiatives are recent, cricket, one of the most obscure sports for American and most European sports fans, has been using Internet to reach its TV-coverage-starved fans globally for almost ten years now.

I am one of those fans. I first started watching live cricket online back in 1998, and Internet remains my primary source for live cricket even today.

In 1998, cricket was one of the reasons why I opted to participate as a trial customer for @Home's broadband rollout in Connecticut. Remember @Home, the broadband ISP that was hailed as
the "new media network for the 21st century" after its $6.7Bn merger with the portal Excite in 1999. Excite@Home became bankrupt two years later, another example of a failed merger due to mismatch in the management cultures of the two firms and horribly executed integration.

I've been a close, first-hand witness of the improvement in cricket's live online streaming experience over the past ten years.

During the late nineties, even though I was on broadband, live cricket streaming provided a ton of buffering and a start/stop experience. There were no quality branded service providers that carried rights for online cricket in the U.S. I probably was using one of the online "hack-services" to buy cricket packages, because there were no easy alternatives available. Cricket was obviously not shown on the broadcast/cable TV in the U.S., and the only available satellite option from Dish Networks required installing a separate dish that had to point to its satellite providing international programming - if you wanted regular U.S. TV channels, a second dish pointing to a different satellite was needed. I could not
install one, leave-alone two dishes, because my landlord objected to dishes hanging out from balconies. On one occasion when the landlord conceded, sympathetic to my passion for the game, I could not get a clear line-of-sight to Dish Network's international satellite from my balcony.

The Internet helped fill this market gap in 2003, when
Willow TV, a Sunnywale, CA based startup was launched by, you guessed it, a bunch of Indian immigrants. Willow TV provides live streams of cricket matches on a pay-per-view or subscription basis. I've been a regular customer of Willow TV since the company's inception.

Willow TV has gradually acquired the live online streaming rights for small markets (e.g., U.S., Canada, etc.) from international cricket boards, for whom it was all incremental revenue, providing no conflict with their existing TV deals which were limited to big cricket markets. Last year, the site carried over 90% of the cricket matches live. It has over one million registered users, almost 75% of them in North America.

The company has apparently been profitable from the very beginning.
Because the size of its target audience is relatively small in the markets Willow TV operates, the ad-supported free streaming business model is not feasible. The niche and ethnic nature of the audience also limits the type and number of advertisers that may be interested in reaching them specifically. Willow has therefore only operated on a pay-per-view or subscription basis. Packages range from $5 per game up to $200 for a series. Streaming is offered from 400 kbps to 700 kbps levels, and they apparently have plans to increase that to 1MBps next year.

I've seen their technology improve over the past five years, with almost TV-like experience today. I hook up my laptop to my 42" plasma when I'm watching at home. I'm also able to place-shift my package and watch live cricket while I'm on the road - the main reason why I don't buy TV packages from Dish Networks and DirecTV, both of which have now started offering pay-per-view cricket packages.

With the introduction of Twenty20, a shorter version of cricket launched to expand its popularity and adoption (game finishes in 2.5 to 3 hrs), and the mega success of the Indian Premier League, the inaugural domestic Twenty20 competition in India earlier this year, cricket is taking off globally in a major way. Reliance ADA, the largest media company in India, therefore made a swift strategic move in investing $60 to $70MM for a 75% stake in Willow TV. Elsewhere, ESPN paid almost $1Bn for the global rights to the Twenty20 Champions League, the world's richest cricket competition, in a 10-year deal.

As live sports streaming on the Internet becomes mainstream, cricket, with over ten years of experience, can definitely provide lessons on successful business models, targeting niche fans and satisfying their needs in a manner that is complimentary to TV broadcast, which will remain the primary revenue generator in sports for the foreseeable future.

October 17, 2008

Internet radio is the sole bright spot in the declining radio industry

Radio industry in the U.S. has been in a decline phase for some time now. Listeners, specially younger ones under 35 yrs. of age, have less reasons to tune in amidst a plethora of choices. The broadcast radio has pushed them away with one bad decision after another that has led to diminishing quality in programming, songs, and commercials.

Any recovery in the radio business will need to understand the potential of digital media, adjust programming for today's consumer, and deliver to advertisers something that is unique and very different from what they've received in the past.

Digital media has been the only silver lining for the radio industry. Internet radio has seen impressive growth in both audience and advertising over the past five years. Ability to target and track ads online vs. terrestrial radio is the obvious reason for increased advertiser interest. While at AOL, I was involved in launching one of the largest radio service on the Internet with a base of ~14M monthly listeners through a partnership between AOL Radio and XM Satellite Radio. AOL recently ended that XM relationship and replaced it with a broader deal with CBS Radio. The AOL/CBS deal also brought together synergies for both party's advertising inventory and streaming ad sales partners. TargetSpot, a CBS-backed startup that sells targeted local advertising for online-radio stations, and Ronning Lipset Radio, AOL's partner for over four years that sells national advertising, gained access to the combined AOL/CBS inventory.

According to yesterday's Wall Street Journal, TargetSpot has acquired Ronning Lipset Radio. The deal makes sense because the two companies bring complimentary capabilities to the table (local plus national advertising). Additionally, increased scale will help TargetSpot to better capitalize on the fast growing mobile advertising market. Its audio advertising solutions will be highly relevant & effective for streaming radio services for mobile devices, whose popularity will only increase with the full rollout of the 3G network, increase in the number of streaming mobile devices and their adoption.

I've included some numbers on the radio industry's advertising figures from the WSJ article.
U.S. advertising revenue in general will probably shrink 0.8% this year, says Wachovia analyst John Janedis. The radio industry seems on track for an even worse performance. Local spot radio advertising revenue, the medium's bread-and- butter, has declined every month this year compared with a year earlier, with August's decline reaching 11%, according to the Radio Advertising Bureau.

Last week, CBS Corp., one of the nation's largest radio-station owners, revised its full-year business outlook because of declining advertising.

But online radio advertising -- much of it the audio ads listeners hear when they tune into a station on the Internet -- is rising at a double-digit pace. Last year, radio sold $21.3 billion in advertising, including about $1.7 billion in the "off air" category that is chiefly online advertising.

The detailed full-year industry revenue comparison for 2007 vs. 2006 from the Radio Advertising Bureau can be found here.

October 14, 2008

Republicans' desperate tactics will be counter-productive

Two leading national polls this week show Barack Obama, the Democratic U.S. presidential candidate, widening his lead over the Republican candidate John McCain. Obama is ahead by 14% (53% to 39%) in a New York Times/CBS News poll, and by 9% (50% to 41%) in a Los Angeles Times/Bloomberg poll.

The McCain campaign, in a desperate effort to halt the slide, has unfortunately adopted tactics to instill fear/hate amongst voters for Obama, as opposed to convincing them why they should prefer McCain. Below is a picture from a McCain-Palin rally in Virgina this week. Their supporters are holding signs to suggest an equivalence between Obama and the Islamic terrorists responsible for the brutal 9/11 attacks in the U.S. This is extremely deplorable.

Source: Chip Somodevilla/AFP/Getty

I doubt such fear tactics, which unfortunately became mainstream during the current Bush administration, are going to work. A message of hope and optimism, especially during the current economic gloom and doom, is what voters need. If the McCain campaign continues down this path, and does not instead focus on selling how their candidate is better than Barack Obama on critical policy issues, we may see the Democratic lead widening even further.