New Media Bulletin: July 2007

The News

On July 5, CBS and RealNetworks announced that fans of Big Brother 8 will be able to monitor the Big Brother houseguests online 24 hours a day through a live feed from within the house. This Webcast coverage begins immediately after the first program of the season. RealNetworks provides the stream as a part of its subscription service.

Behind the news

This collaboration is an example of the network television business plan for new media. CBS provides the content and RealNetworks provides the eyeballs. Both receive a portion of the revenue generated. For CBS the benefits are two-fold. Content is monetized and viewer interest in the content is strengthened. There is also a social network aspect of the distribution of content as viewers have the opportunity to discuss the show online. Because the Web audience is fragmented networks must partner with companies that have built niche audiences who are interested in specific network offerings.

The News

On July 12, the Disney Internet Group (DIG) announced the launch of wap.Disney.com.cn, a wireless application protocol Web site in China. Chinese mobile phone users will be able to download games, videos, cartoon wallpapers, ringtones and pictures from the Web site or maintain email accounts there. Users of the site will also be able to book rooms at Disney hotels in China. To support this business Disney is ramping up its content production in China with the 300 DIG group employees increasing local content production specifically for this Web site.

Behind the news

Internet strategies are inherently global. The Web does not respect national boundaries. Global distribution of content is, of course, not new. Overseas theatrical revenues often exceed the domestic box office and DVD sales abroad, while not as strong as in the US, are a lucrative addition to company revenues. Disney's new media business plan includes an international component as represented by this initiative. Where appropriate- Europe, China, Japan- Disney links its Internet content distribution with the promotion of its theme parks and resort properties. While Hollywood companies are all experimenting with local content production, the real benefits are distributing existing content through new channels. The cost of producing that content has already been incurred so any new revenues flow almost entirely to profits.

The News

On July 11, Disney and Microsoft announced a deal to make 35 Disney movies available to the 7 million Microsoft Xbox Live users in a high definition format. Subscribers will be able to download the movies for viewing on a television set. Disney joins two dozen other content providers in offering downloadable content to Xbox game devices. The deal also will allow subscribers to rent films on demand released under the four Disney banners as they become available for digital downloads.

Behind the news

Disney's new media business has two major parts, downloads to rent or own and ad-supported streaming of television programs. Disney was an early partner with Apple to sell digital downloads, but is now branching out through this deal with Microsoft. The Xbox is an alternative to the Apple TV. While it is not cheaper than Apple TV, Xbox has a much larger installed base. Disney's partnership with Microsoft thus gives it greater market access and may boost its movie download business. When paired with a high definition television set, the Xbox offers one of the best and most flexible ways of watching movies at home. Disney's new media business plan for downloads includes partnering with all aggregators such as Apple and Microsoft to gain the widest distribution of its content through all available channels. This is the essence of the new media business plans of all Hollywood conglomerates.

The News

On July 11, Sony announced the launch of a new version of its PSP portable game device. The new version of the PSP is 33% lighter and 19% slimmer than the original PSP, which was introduced in 2004. The new version also has a video-out port so movies can be viewed on a television.

Behind the news

The new design will make the PSP more attractive as a video viewing device. Portable devices may be the fourth screen (after the television, the PC and the cell phone). The PSP's 4.3-inch screen is bigger than the iPhone and it is cheaper. As more movies are released in UMD format for playing on the PSP, it may become a major channel for movie distribution. Hollywood companies have made distribution to mobile devices a part of their new media business plans.

The News

On July 12, Viacom announced a new Internet Video Initiative in the U K. Viacom's BET unit is partnering with Brightcove to launch a video Web site, BETonBlast.co.uk, for the British audiences featuring entertainment, music and celebrity programming. BET's shows will be distributed as ad-supported streams on the Brightcove network. Viacom Brand Solutions, another unit of the parent company, will be responsible for selling the ads for the new site. By partnering with Brightcove, Viacom taps into the network's viral promotion feature that enables viewers to embed BET Internet video content on websites, blogs and social networks in the UK.

Behind the news

This initiative illustrates two aspects of Viacom's new media business plan. First, Viacom is open to mutually beneficial partnerships with content aggregators like Brightcove. Viacom can take advantage of Brightcove's marketing expenditure, which has created an audience, while retaining ownership of content and moreover, selling the ads that support the service. Viacom's new media strategy is also flexible. The company can rely on its own sites in the US market, but partner with other companies in global markets. It is worth noting that Viacom is relying on existing content for this business, not locally produced content. This world-product strategy is the preferred model for international distribution.

The News

On July 10, Nielsen/Net Ratings announced it will no longer report Web site rankings based on page views, which is the total number of Web pages people have loaded from a given site. The company is substituting two new measures – total sessions and total time spent. This change is intended to keep pace with Web technology that allows people to interact with sites for long periods without loading new pages.

Behind the news

This change in Web site rankings reflects the growing importance of rich content on sites. The media conglomerate Web Sites offer hours of video, blogs, and extras to engage users. Ranking sites by time spent may be beneficial for network web sites where viewers can watch missed TV episodes. The media companies may be able to charge higher premiums to advertisers because of the engagement of users on their sites.