Brian Grey Blog

Everybody’s doing it — investing in original web video that is.  John Paul Titlow’s RWW piece highlighting Hulu’s announcement that they’re going to be spending $500MM in “new content initiatives” points out the next potential front for new content models and economics to take center stage.

Now I’m not here to sound the death knell of traditional television — but the ability to inexpensively bring cameras, people and scripts together in a room, studio or out to the field to produce content that is interesting, funny, targeted and timely is indisputable.

I experienced this first hand during my time in LA at Fox Sports Interactive as we scaled an original programming operation relatively far from the Fox lot.  Those were still very much “walk before you run” days, and the evolution has continued as more of the traditional TV folks have leaned in to see what the “digital guys” are up to.  And now at Bleacher Report, video has increasingly become part of our DNA and is an extension of our next gen digital publishing platform.

Video certainly opens up the creative opportunities to a meritocracy of ideas and talent.  The barriers of entry are no longer access to studio infrastructure and big time budgets.  Throw in mobile distribution and the opportunities are endless in terms of the corpus of original video that can be created for consumers across thousands and thousands of topic interests.  And it can all be done for far less than $500MM.

Thanks to the folks at Forbes for posting my op-ed piece last week.  These are certainly interesting days in the (digital) publishing business.  Enjoy the full post here on Forbes.com:

http://www.forbes.com/sites/realspin/2011/12/22/how-publishers-can-ready-themselves-for-digital-medias-evolution/

This may be jumping the gun a bit – typically these annual prediction pieces come out in that slow week between Christmas and New Years – but I figure it’s good to get these out now so you can do more important things that week (like eat a lot of unhealthy food!).

So here goes, three predictions, actually more like “trends”, that will thematically connect the worlds of sports sponsorship with digital media – entertainment.

Pent-up Demand Unleashed in 2012

Let’s face it, 2011 has been a bit of a drag in the sports world.  Two lockouts, no great positive news stories to keep us enthralled (where’s Brett Favre when we really need him?), and enough global debt crisis black clouds to scare off even the most optimistic media buyer.

So just playing the law of averages means that 2012 will be a big year.  Labor peace pervades the NFL, NBA and even MLB.  Marketers can actually now build long-range marketing plans around the properties that they are investing.  In the case of the NFL the TV deals are going to run for the next 10 years – imagine how many ad impressions Tim Tebow might get over that span?

Layer on top of this the fact that 2012 is an Olympics year and that Tiger Woods won a tournament in late 2011 (imagine what happens to golf if he wins a Major next year?), and the macro outlook for sports sponsorship and advertising spend looks very positive in the coming year.

Leaping to Emerging Digital Platforms

On the digital front, marketers will turn their focus to where sports fans are going – and that means mobile and social platforms.  With another big holiday season of new smartphone and tablet purchases, more fans will be accessing sports content and entertainment through these smaller screens so sponsors will be smart to figure out how to embed their brands and messages into those experiences.

From a social media perspective, Facebook and Twitter will continue to explore ways to connect top tier content publishers with brand advertisers.  Part of this will take place on those dominate social platforms directly, but a big part of the experience will come through the smart integration of social elements within the publisher’s digital media experience.

Of course the perfect storm here for marketers will be the opportunity to partner with content publishers and properties around experiences that combine the social and mobile consumer experience.  Expect to see a major shift towards innovation around this theme in 2012.

Sports and Entertainment – Lines Continue to Blur

Ok, we’ve been talking about the confluence of the sports and entertainment worlds for years – how long ago did ESPN Hollywood launch – and sunset?  But we know how much entertainment stars love to hang out at sporting events and be around athletes, and in turn, athletes all want to be entertainment stars (e.g. case in point, Shaq’s latest ad promoting the NBA on Turner).

But 2012 truly feels like the year this sports-meets-entertainment theme really takes off.  Part of it will driven by the two trends above:  labor peace means athletes will have their public stages for a full year without distraction and no group has embraced social media more than the athlete cohort.  We should not overlook other data points that infer an inflection point here — thank you Kardashian sisters for helping to really define “NBA Entertainment” and thank you to the WWE for pushing for your own TV channel.

Why does the acceleration of this sports-meets-entertainment trend matter for sports sponsors?  Well, many advertisers have smartly caught on to the fact that by connecting with this theme they can keep a 24×7 narrative going with fans that doesn’t have to end when the game ends.  For example, it’s great for Visa to be associated with what happens on NFL fields, but it’s even better if they can figure out how to stay in front of fans through an association with athletes and teams when they’re off the field or court – which will increasingly take place in that arena we’ve traditionally considered an “entertainment” setting.  Consider the lines officially blurred in 2012.

So there you have it.  Three trends to wrap your head around if you’re sitting anywhere on the spectrum between sports sponsor and publisher/property.  Happy sports new year to everyone!

The story of how the Pac-12 (boy that’s still hard for me to say as a long time Pac-10 fan) negotiated their recent television media rights deal provides good insight into how traditional partnership models can melt away in changing times.  As the story goes, Comcast was on the verge of locking up the TV rights to Pac-12 events – primarily football and men’s basketball – until long-time competitors Fox and ESPN joined forces on a bid to share the deal which ultimately snatched it back from the jaws of defeat.

Hey, if the TV guys who are used to “winner takes all” negotiations can figure out a way to partner up on deals – imagine what the digital world could look like rolling forward as content producers, distributors and sponsors figure out changing roles and business models on the fly.   Consider what kinds of working relationships we might see given the shifting landscapes.

Content Producers and Distributors

This is the relationship you’d expect to be the most secure.  You know, distributor pays content producer for content, and then monetizes it by bringing in sponsors and/or charging fans directly.

But what happens in a world with rapidly shifting and expanding distribution outlets?  Think of Google/Youtube, Facebook, Twitter, Hulu and the tens of millions of smartphones and tablets consumers carry around all as content consumption devices – or distribution.   Combine this plethora of digital distribution with the ever declining cost of content creation – a camera and a talking head, a blog post, and even a “professionally produced” show all cost a fraction of what they cost to produce yesterday let alone a year ago.

So the content producer and distributor dynamic is changing.  Content creators can go direct to consumer (and hope someone can find them on the Web or via the App Store) or, more likely, they can wade into this expanding sea of distribution that awaits their creations and let their content creations flow through as many distribution outlets as make sense.

And in a lot of cases, content producers will attempt to also become distributors – the University of Texas can make video content available directly to fans through their own website – and likewise, distributors will become content producers – Netflix and Hulu moving in to “originals” production are but two examples here.

Distributors and Sponsors

Here is another traditional working relationship that is under re-construction.  Digital distribution doesn’t mean a walled garden network that owns audience in the way three television networks used to dominate the airwaves.

Distribution still matters for sponsors, it will just be defined differently and more fluidly.  Channels like Search powered by Google’s ongoing improvements in delivering high quality content to users, and Social powered by Facebook’s and Twitter’s respective focus on turning their audiences more efficiently towards content will be increasingly relevant to sponsors.  And Mobile will no doubt be the consumption platform that dominates the future – the combination of Search and Social on Mobile opens up a whole new distribution playing field for sponsors.

Savvy advertisers will embrace these changes in the context of their traditional distributor partnerships.  It won’t be sufficient to park a sponsorship exclusively on a single distribution outlet to reach a desired audience.   Pepsi, for example, will need to reach NFL fans where those fans can be aggregated and engaged across several distribution outlets.  Sponsors who can efficiently map their brand messages across a diverse set of distribution opportunities will find that their ROIs respond accordingly.

Content Producers and Sponsors

Of the three unique relationships in the content-distribution-sponsorship chain, the dynamic between content producers and sponsors may be the one that we see transition the most as digital media continues to evolve.  New and meaningful distribution outlets give content producers and sponsors more options to partner directly to create powerful experiences.

Some might call this the next wave of “advertorial” or “branded content”.  Whatever term gets coined, the opportunities will continue to expand for brands to define the audiences they want to connect with and then partner with content producers to create experiences that don’t feel forced and fake.

A key aspect here will be sponsors and content producers having a smart perspective on distribution on distribution.  For example, Chevy could come up with the greatest creative concept in concert with a content producer, but running the content solely on Chevy.com and/or a single media website will significantly limit the potential for Chevy to engage all the potential fans who might be impacted by the campaign.

Ultimately, great content concepts, smart distribution and innovative sponsorship groups will all be part of the mix going forward.  Just expect that the ways they have historically worked together will evolve almost as fast and the digital media landscape is moving.

Well, this is a test to see if I can post a blog post via email. Not sure it’s going to work, but knowing the WordPress.org guys I’m betting it will!

Interesting story in today’s NYTimes highlighting the decline in blogging amongst the younger demo as they migrate to Facebook, Twitter and Tumbler — platforms that put a premium on short, visual posts versus deeper thinking and writing. Perhaps this is a sign that portends a sad future where the next generation loses their ability to think critically and express these thoughts through well formed written presentation.

If you believe in Darwinism, maybe this is a natural evolution whereby writing actually declines as a genetic capability — replaced by the ability to communicate in short, rapid-fire bursts heavy on photos and video creations. I promise to not be a luddite here and be open to this future. Heck, I live with two kids who are clearly wired for this new world.

Apparently the rumors are flying around that Facebook is next in line to roll out their own branded mobile phone.  Per usual, Techcrunch is out front with the info that Facebook is working on the software (not the hardware, nobody takes that on these days) to power a mobile device that would give iPhone and all those Android wannabes a run for their money.

Now we’ve heard this story before.  Big brand thinks they can go direct to consumer, bypass the mobile Carriers (e.g. Verizon et al) and become the gatekeeper to all revenues that flow in from said consumers.  Well, turns out it’s a little harder than that — just ask ESPN, Google or even the well funded upstarts Amp’d Mobile and Boost Mobile.  So why in the world would Facebook even have a chance to pull it off?

Couple reasons…or say 500 million reasons to start.

Talk about an amazing low cost promotional platform to upsell from, Facebook just has to get every marketer’s favorite “1%” conversion and all of a sudden they’re in the game.  Then there’s the not so small fact that a whole generation of digital users have shunned traditional email accounts for the Facebook inbox.  If this batch of Internet users is fine with the FB stream, wall and inbox as their communication threads, then a Facebook mobile phone will feel like an obvious extension.

And then of course there’s the insatiable appetite that marketers have to get social and be on the Facebook platform.  Imagine how Facebook can leverage this influence to pump out all kinds of co-marketing, cross-marketing deals with big brands to push the FB phone while at the same time seeding the FB Mobile Ad Network.  AdMob and Quattro what?

Ok, so the Facebook phone seems like it’s got a real shot, even if it’s not officially on the Facebook “to do” list.  Now how long until we get the specifications for the Twitter mobile phone?

My wife and I have started and stopped — and started and stopped again and again — our subscription to Netflix over the last seven or eight years probably more than any family on the planet.  It’s nothing against the Netflix crew, they have built a fabulous business and created real convenience.

Our issue is more the fact that we can’t decide whether having a Netflix DVD envelope sit on our kitching counter for a month means we’re actually doing worse than just schlepping down to the local Blockbuster (at least while it’s a Blockbuster and doesn’t get converted in to one of those Taco Bell/KFC hybrids)?  But our consumer behavior problems aside, the current fork in the road that confronts Netflix is further proof that disrupting in the content business is hard — or at least really expensive.

Silicon Alley Insider’s Edward Jay Epstein does a nice job comparing the upstart Netflix to the incumbent comparable HBO.  As Netflix eyes a migration to the Internet for the next phase in delivering it’s service, it has to contemplate licensing content, essentially a whole new operating expense that isn’t an issue given that it’s original business model is covered by the “first sale doctrine”.  On the other hand, as the biggest PPV player in the business, HBO benefits from the fact that it has for years invested in producing its own content (think the Sopranos) and has almost 10x the operating free cash flow of Netflix to go and license additional first run content that can be used to retain viewers.

The story here reminds me of why we moved in to the realm of creating original content during my time at Yahoo! and why we ramped up a team to do the same even more extensively when I was at Fox.  Aggregators get squeezed sitting between the content creators and the audience.  Sure it’s hard to come up with creative ideas and make hits, but there’s a whole lot more potential upside in it when you do that than trying to make a business around buying up the rights after the fact.

This is a risky post I know — mainly because I’m drafting it at 3:23 am PST.  But also because I haven’t done all of my homework around Google’s new Buzz product, so I’m probably missing the boat on all the great features it possesses that I am missing out on in my first half hour or so playing around with the product.

Cut me some slack.  I decided to dive right in like some old hack user to see how intuitive and down right easy it could be for me to finally have my social network and content all embedded in my all-time favorite Web application:  e-mail.

I know it’s early days here, but the experience I’m looking for (in case anyone at Google is listening or reading) is essentially the following:

• give me the fully functional “follower” options — let me follow anyone in my gmail contacts list, not just the people Buzz seems to be serving up (which appear to be coming from my Twitter account)…the early execution feels limiting (again, this may just be due to the slow roll out plan Google has implemented with Buzz)

• let me have more than a handful of “connected” sites, especially on the blogging front where the WordPress omission is painfully obvious when both blogspot and blogger show up

• in fact, while we’re at it, can’t I just get my Google Reader feeds in Gmail, do “shares” that show up in Buzz and as posts on my blog and that are also published in my Twitter account which then auto updates my Facebook status?

I don’t think I’m being unreasonable here.  I mean if Google wants me to park myself inside Gmail for the rest of my adult Web life, the least they can do is make it an enjoyable trailer park while I’m there, right?  Pass me the can of Slim Jim’s will ya!

TechCrunch’s comparison of Blippy to Facebook’s (now defunct) Beacon targeting platform raises the obvious question:  is Blippy a good idea or not?  Apparently, as the TC post contends, some retailers don’t think letting their consumers share their purchase details online makes for good business.

May those retailers and/or product brands wither away.

Blippy is a great idea.  What right-minded retailer or product brand wouldn’t want to see not only in realtime what SKUs consumers are buying, but also what the friends and followers of those consumers are saying and asking about those purchases.  Talk about an amazing customer feedback petri dish.

And beyond the CRM and data goldmine, the social commerce opportunity appears to be a trend to watch.  Just look through the depth of comments that a typical purchase posting generates on Blippy and imagine how this digital word-of-mouth phenomenon multiplies not just the brand power for retailers and the products they sell, but also the sell through of additional units at no incremental customer acquisition marketing expense.

But let’s face it, these are the basic core user and business dynamics that VCs care about.  I’m also interested in some very specific personal level use cases that Blippy can enable.  You know, the types of information that are really important to people, such as:

Wife Purchase Tracker — when I enter the family credit card I’m now able to get a realtime update on what my wife is purchasing.  What a better way for me to then ping back to the retailers that she buys from to say:  “Oh, hi, it turns out we accidently made a purchase from you guys.  Turns out we don’t really want to buy those knee high suede boots after all.  Please cancel our order.  Thanks.”  What a helpful family budget management tool you are Blippy!

Dating Profile Tracker — what a better way for the single daters out there to really get to know their friends and acquaintances?  Imagine a young lady meets a new guy — let’s call him Rick — on Match.com.  His profile is stunning:  good education, good job, does charity work — he’s perfect.  Or is he?  With a simple Blippy integration on Match.com, she then peruses Rick’s purchases on Blippy.  Oops, bad idea.  Seems that Rick has a penchant for frequenting the local liquor store where, thanks to Blippy, we see that he’s a fan of Wild Turkey and chewing tobacco.  Time for the lady to move on from Rick.

Vegas Tracker — now this one could be a real problem for the Las Vegas Chamber of Commerce who has rebuilt the image of Sin City on the “What Happens in Vegas, Stays in Vegas”.  Thanks to Blippy, what gets purchased in Vegas can be viewed on Blippy.  Man, talk about putting a real damper on party weekends for the jet set.  Do spouses really want that level of over-the-shoulder viewing of how many times their significant other stopped by the Cesars sportsbook?  Then again, Blippy’s terms of service doesn’t require you to link EVERY one of your credit cards to your Blippy account now does it?

I read with great pain the recent Wall Street Journal article touting the growth prospects of a major U.S. corporation that are being driven through exports of its products to India.  More on that in a moment, but first I need to set the stage with a comment about the Import side of the U.S. export-import equation with India.

Now I don’t profess to be any kind of expert in the area of H1-B Visas, but I have previously managed employees who were working here in the U.S. on such visas.  And I subscribe to the general theory that labor markets should be open so that an efficient flow of resources can exist to help foster new businesses that are based on technologies that require specialized skills from such workers.

That’s a fancy way of saying that if (as is oftentimes the case) there are highly educated and proficient people in India (e.g. say software or Web engineers for example) then I would suggest it’s a good long term growth policy of the U.S. to support a robust H1-B Visa program whereby these accomplished workers help build new companies and jobs for multiple workers beyond the “imported” folks.

Clearly in a time of rising U.S. unemployment this point of view isn’t widely held.  With places like Detroit experiencing an unemployment rate north of 50% you’re not going to see the Obama administration vault the H1-B issue to the top of their “to do” list.  It’s actually a small victory that Obama’s peeps are taking meetings with officials from India as reported by the Wall Street Journal’s LiveMint reported back in the spring.

Okay, but here’s where the Indian government should be crying for some kind of quid pro quo.  Just this week the very same WSJ reported how focused the U.S. company YUM brands is these days to expand its various franchises like KFC and Taco Bell in to India to fuel its long-term growth.  Mmmmmm!…Naan bread tacos and curry-fried chicken wings.  I’m booking my next trip to Bangalore now!

I’m just saying, if the Indian people are willing to let YUM Brands drop all over their country food full of high fructose corn syrup and hydrogenated soybean oil, shouldn’t the U.S. be a bit more giving when it comes to letting highly educated Indian engineers hang out here helping tech start ups grow and prosper.

Hopefully I can find an “expert” to help me properly spice up my Taco Bell Super Gordito with a little basmati rice before their Visa expires?