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Audience Research & Development



by Terry Heaton
hot newsNews organizations, in their battle to protect themselves from what they view as parasitic aggregators, are inserting their need for an archaic "doctrine" in federal court, and it can't end well. A group representing every newspaper company in the U.S. has filed a "friend of the court" brief in a case involving three Wall Street banks and a website that publishes some of their public research.

The banks—Merrill Lynch, Barclays, and Morgan Stanley—won an injunction earlier this year against to prevent them from publishing research that they claimed impacted their business. AmLawDaily described it this way:

The banks claimed Fly's practice of publishing pieces of research reports almost instantly undercut their work by making key nuggets meant for exclusive client use available to a wider audience immediately. Why would clients pay big money those reports—which themselves cost the banks money to produce—if Fly was going to publish the important stuff right away?

The justification used by the banks to obtain the injunction is a journalism tort called the "hot news doctrine" that places some limits on the publication of information, even if that information is already in the public domain in some form. The judge ordered Flyonthewall to withhold publishing research for two hours.

The "hot news" doctrine came in a Supreme Court decision almost 100 years ago involving wire services, and to invoke it in the battle against technology is not only desperate but ridiculous on its face. Google and Twitter filed their own friend-of-the-court brief, in which was posed one profoundly damning question in trying to restrain facts:

"How, for example, would a court pick a time period during which facts about the recent Times Square bombing attempt would be non-reportable by others?"

Facts aren't property, and the real problem for media companies pursuing this is that the courts will have no choice but to eliminate the "hot news doctrine," and where will we be then?

Jeff Jarvis is all over this, and he's right when he says that "all news is hot news."

Hot news is ridiculously obsolete. What's hot today? As Tom Glocer, head of Thomson Reuters, said, his news is most valuable for "milliseconds." Hot news limitations should be repellant to journalists, even desperate ones, because every journalist builds on the facts revealed by others. It should further be repugnant to them as it constitutes a form of court-supervised prior restraint. Hot news restrictions would be suicidal to news organizations — even though they foolishly think it would protect them — because it would restrict everyone's ability to spread the news via links and send journalists audience. Hot news should worry every citizen because the free flow of information is vital to a democracy.

Go read Jeff's commentary; it's spot-on and it's important.

Media companies — especially newspapers — are in deep trouble. There's no doubt about that, and it's hard to blame the industry for "circling the wagon" tactics like this. In the end, however, embracing the disruption, not fighting it, is the path to future viability. As Jarvis points out, the architecture of news and media have "changed utterly" since the 1918 Supreme Court ruling and that once facts are made public, they belong to the public.

We feel strongly that media companies should be in the continuous news business online, and in that world, as Jeff points out, all news is very definitely hot news.

One final thought: when will we realize that our competition for dollars is pureplay Web companies, not content created, advanced or aggregated by others? Advertising itself is in disruption (see my commentary below), not content used to attract audiences for advertising.   <Link>

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by Ken Elmore
Let's face it. When things are usually too good to be true, they usually are. The announcement by Hulu to begin charging for its online content is a prime example.

Hulu is announcing that in a couple of months, shows like "The Office" and "Heroes" will be tucked behind a $10 monthly pay to view firewall. The new service is being billed as Hulu Plus. The "Plus" part comes in the form of special programs, off network shows and movies, some in 720p HD.

Hulu Plus is different that regular Hulu, which by the way will still be available. Hulu Plus will stream on iPhones, iPads, and Xbox and Playstations.

Want to watch an entire season of "Desperate Housewives" in one sitting, no problem - Hulu Plus will deliver it.

Click here for the pitch from Hulu on the new service.

Hulu PlussHulu CEO Jason Kilar unveiled the service on the Hulu blog: "Hulu Plus is not a replacement for Hulu Plus is a new, revolutionary ad-supported subscription product that is incremental and complementary to the existing Hulu service. For almost all of the current broadcast shows on our service, Hulu Plus offers the full season. Every single episode of the current season will be available, not just a handful of trailing episodes."

Kllar added "with Hulu Plus, we believe we've met that goal. For our end users, we're offering them the most convenient way to access their favorite shows, on devices they love, in high definition, at a fair price. For our advertisers, who allow us to keep our Hulu Plus price low with the support of ad revenue, we offer one of the world's most effective advertising platforms, with the ability to speak effectively to users across a variety of devices, anywhere they happen to be. And finally, for our content partners, we offer revenues that compensate them fairly for bearing the cost of producing the shows we love."

With Hulu Plus, there is no need to purchase episodes from iTunes, you can simply stream it to your device... and not just on wifi, but 3G devices as well. Hulu has figured out a way to make broadcast television even more portable, and at the convenience of the viewer.

Hulu launched in March 2008 with the backing of ABC, Fox and NBC. Earlier this year Hulu projected revenues of $100 million in revenue by summer 2010, more than its income for all of 2009. comScore says monthly video streams reached 903 million in January 2010, over three times the figure for a year earlier, second only to YouTube.

So who are the winners and losers in this new announcement. At $10, consumers might start justifying the need to cut the cable TV cord.

No doubt technology is changing consumers access and use of broadcast media, but there's one thing with the launch of Hulu Plus that will not change, commercials. Hulu Plus will launch will commercial ads. Why should online be any different than on-air. Consumers already pay for acess to these shows on broadcast TV, with commercials, no reason that online should change that model, according to Hulu.   <Link>

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by Terry Heaton
A few weeks ago, the Associated Press updated its writing stylebook to include several new media terms. Those of us who've been in the space for awhile raised eyebrows at such things as "smart phone" instead of the industry norm, smartphone. The AP also removed capitalization when referring to the Web and continued the archaic spelling of email, E-mail. Fortunately, a new stylebook has made the scene, one with a much better and more complete lexicon of new media terms.

Yahoo published its styleguide in digital form this week; the print edition comes out July 6th. They wrote it, because, as senior editoral director Chris Barr noted in a press release, "there hasn't been a comprehensive manual of online editorial best practices to guide writers and editors."

As the volume of Internet content grows and people become increasingly dependent upon clear and concise content, Yahoo! is pleased to be able to share these principles for writing for an online audience that we have amassed over the course of our 15-year history.

Here are just a few examples and why we think this is such a good guide:

  • page view
    Two words. The viewing of a webpage by one visitor. (Advertisers consider how many page views a site receives when deciding where and how to advertise.)

  • Web (n., adj.)
    Note capitalization. Examples: Yahoo! Search helps you find information on the Web. Cut and paste the address into your Web browser.

  • website

  • World Wide Web
    Note capitalization.

  • Internet
    Note capitalization. OK to abbreviate as Net.

  • iPhone
    Note capitalization of this Apple trademark.

  • cell phone (n., adj.)
    Two words, no hyphen. Examples: He left the message on my cell phone. Type in your cell phone number. Note: Cell phone is interchangeable with mobile phone in the U.S.; in the U.K., mobile phone is the more common term. In parts of Asia, handphone is common.

  • clickthrough (n., adj.), click through (v.)
    One word when used as a noun or an adjective. Two words when used as a verb. Examples: The company's online ads consistently earn a high clickthrough rate. Click through to the last page to see your score.

  • email (n., adj., v.)
    One word, no hyphen. Plural: email messages and emails are both acceptable.

So strong is this guide, that we highly recommend it to clients and all media companies as a way to finally make correct language decisions when it comes to writing for and about the Web. It's far more thorough, accurate and helpful than the AP's new additions to its stylebook. Many kudos to the folks at Yahoo! for putting this together.   <Link>

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by Terry Heaton
The Muppets CurmudgeonsI was told a few weeks ago by a dear friend and industry observer that I'm too critical. His comment was that I was in danger of becoming like one of those Muppets curmudgeons that sits in the balcony lobbing relentlessly critical comments about everything below.

This isn't the first time I've heard that I'm too critical, so I've spent a lot of time since then thinking about what he said. Perhaps it's the biting nature of some of my prose, or perhaps it's just that, by nature, I'm more inclined to see what's wrong than what's right. Of course, maybe the truth hurts, or "critical" is in the eye of the beholder. There's also the "calling your baby ugly" syndrome. You could, I suppose, say that I come off as angry, and that probably wouldn't be far off.

Nobody likes to be criticized. I get that and used to run from criticism myself. That was until a friend pointed out that criticism is very often somebody just trying to be helpful. I should welcome and truthfully examine criticism, because I might learn something in the process. I've done that, and it's become a useful practice.

I'm always quick to point out that very little of what I write is what I call "all or nothing." It can come off as such, if the reader isn't aware of the thousands of other bits I've written that soften the blows. Is traditional media a sustainable business? I certainly think so, but that doesn't mean that many won't make it in the future. The idea that any market could sustain a dozen mainstream media outlets was born of scarcity, and that won't be sustained for long.

One of the first essays I wrote on this journey was called "Is TV News Giving Away the Future?" I published it in May of 2003 and got a lot of heat for criticism of third-party ad networks running TV station websites. When I look at the "false assumptions" published then, most are still in play today, and there's even a new wrinkle in the concept: Most media company groups now function themselves as third-party ad networks, so a central thesis in my overall philosophy — that third-party ad networks work for the good of the network but not necessarily for the good of the properties on the network — has been ignored completely.

I've been saying that the flexibility for revenue growth is at the property (local) level for so long that I'm actually growing weary of hearing myself say it.

So yes, I guess I'm a little angry. Angry not because "my" concept isn't accepted, but angry because the industry that was my life for so long is walking into a trap, and nobody is heeding the warning. You'd think that my response would be, "well, at least they can't say they weren't warned," but the passion within me won't let it go, so I pound onward.

Perhaps I come off as arrogant. After all, what makes me think that MY view is the only correct view? My response is that at least I have a view. What's yours?

If I'm too critical, then what's the right balance? The opposite of criticism is praise. Am I to offer a few bones of praise as my friends and colleagues continue their trek to the brink? Praise for what? For behavior that fundamentally dismisses reality? "But, Terry, you're asking too much? What do you expect these companies to do, stop every practice that the industry accepts?" What's the alternative, I respond? The boat is sinking. How clear does the picture have to be before we jump to a vessel that's going to stay afloat for awhile?

That vessel is not third-party ad networks. In fact, the new vessel has little to do with even Madison Avenue, which is the real problem in all of this. The advertising industry is in full disruption, but the industry itself doesn't want to acknowledge the truth. Madison Avenue is very happy to keep us right where we are, for that validates its own illusion. The advertising industry needs a healthy self-examination, but to do so would not be pleasant. Meanwhile, the people formerly known as the advertisers are moving elsewhere.

Cocoa Cola, for example, just finished an experiment with Twitter and the World Cup. The ads delivered 86 million impressions with a click-through rate of 6%. That's 5.16 million actual visitors to whatever Coke was selling. The company called the results "phenomenal," because they are. We don't know what Coke spent on this, but I guarantee you it didn't cost what traditional advertising would have cost to deliver such numbers. And here's the thing: Coke didn't need an agency to handle the "buy," nor did it need a third-party ad network to deliver the goods. This was easily handled in house. I mean, come on; it's Twitter!

Twitter is what's known as a pureplay Web company — those clever little (or big) businesses with no brick and mortal entity in the real world, who have the audacity to ignore Madison Avenue. Online advertising money, even at the local level, is shifting to pureplays, as witnessed by this comparison with Borrell research over the last five years:
Market shares 2004 and 2009

Pureplays, having already taken the overwhelming majority of national online ad dollars available, now have their sights set fully on local ad dollars, and, as pictured above, it's working. These companies smile all the way to the bank at our strategy, because while we're diverted "being media companies," they're in our wallets.

Gordon Borrell told me recently that he doesn't think the local pureplay growth is sustainable, because sooner or later, they'll run into the reality that they have no real relationships with the local business community ("local advertising is sold, not bought"). In that sense, he says, they "need" local media companies to work with them. He's probably right, or it may be wishful thinking. Look, these people are smart and well-funded. The lack of relationships today doesn't mean the lack of relationships tomorrow, for even the definition of "local" is changing in our networked world.

What competitive individual can look at the above pie charts and say, "I'm happy with my six percent?"

Our problem is that we think being a media company is enough. It's not, especially when it comes to making money via the Web. And if you think it's bad now, wait until mobile skyrockets. Who will provide the best apps for commerce in the local marketplace? You can bet it won't be media companies. We'll be too busy providing content. We think mobile is just another distribution vehicle, and making content is what we do. We're good at it, too. But is it sustainable as a revenue-generator in a hyperconnected universe? I'm not so sure.

Oh we'll see incremental revenue gains, but they will be paltry compared to what the innovators suck from our markets.

There I go being critical again.

The problem, I think, is that my views are based on behavioral observations. They have to be, because everybody "thinks" they're doing the right thing. I'm critical at the most strategic of levels, and not only is that the provenance of the media companies themselves, tactics flowing from a corrupt strategy — no matter how well they're executed — are a net liability. These are the very people I must convince, and that's problematic when I'm "being critical." Who wants to listen to somebody pound away at how awful your thinking has been? I get that, but again I ask, "What's the alternative?"

Tactically, there are some amazing things being done by media companies these days. I know, because I'm a consumer of those products and services. Go anywhere in the U.S. and you'll find best practices abounding. My difficulty in writing about them is that, at the end of the day, I find myself saying, "So what?" Tactics aren't the problem; strategy is the problem, and shifting strategy requires a degree of courage not found in most board rooms. There I go again.

So on behalf of myself, let me apologize for being too critical. I don't do it to insult anyone; I'm genuinely concerned about the future of a dying industry and passionately so. I don't think there's time for massaging egos along the way, and I'm sure that's evident in what I write. Still, that's the way of business, and I should be more accommodating. I'll try.

However, to those that I come off as sounding critical, let me ask you this: if you can acknowledge even a grain of truth in what I say, will you please act on it?    <Link>


"What do stations propelling their ratings have in common?" The head of a group of TV stations recently asked me that question.

Although markets and challenges are different, one of the things they have in common is clear goals. In going through my files, I pulled the example below of clear goals that I helped one station develop based on the research.


Our experience shows, the best approach is to:

  • Focus on what's most important to driving your ratings based on what you know about your viewers.

  • Keep the list to half a dozen calls to make it practical.

  • Contrast the old and new way.

  • Outline the "success path" to achieve the goals because they won't happen on their own.

  • Identify the obstacles, which usually include "Don't have enough time." Provide practical solutions.

Here's the example of the goals, which I recommend you review and adapt based on your action plan.

New Way
Old Way
1. Fact Finder Report, showing how the station goes the extra step to nail down the facts. When it comes to a major story, there are almost always facts you need to nail down. You won't nail down everything, so tell viewers what you've confirmed and what you're still working on.Just covering the news, failing to differentiate how the station goes the extra step because accuracy matters.
2. Each anchor provides perspective because of their knowledge of the market, or goes the extra step to check out a story by phone, or demonstrates an attitude of viewer advocacy. Whichever appropriate. Ken and Teresa provide you with unique opportunities because of their knowledge of the market and their contacts.Anchors merely read aloud well.
3. Promos sell a competitive advantage — like your signature franchise. This is the strongest competitive advantage because it speaks to how you go the extra steps to nail down facts in an important story because accuracy matters. Promoting the news of the day all the stations cover — a losing approach. You can't promote "sameness."Expecting viewers to dump their favorite station to watch the same stuff
4. Content includes at least one viewer hot button as described in the research: Stories on neighborhood crime trends including break-ins, car thefts, robberies, keeping families safe from crime, alerts on latest illnesses, keeping students safe from bullies, holding officials accountable, revealing local scams, revealing waste of tax dollars, checking facts where facts are in dispute or not known, investigating school systems based on viewer concerns ranging from student-teacher ratios to the classroom time with students.Just reacting to the news of the day.
5. Weathercasts are forecast-focused, beginning with a headline for the forecast, and providing detailed day part forecast information as part of "the weather story." Meteorologist shows his expertise and showcases competitive edge of technology.Starting by telling viewers what the weather was, which they already know: "We enjoyed sunny skies today." Format is the same no matter "the weather story."

You'll notice the reference to "Watch any of our newscasts, and you'll see..." That's because consistency is so important. You can't tell viewers "You watched the wrong newscast!"

Please contact me with any questions. I'm happy to help customize goals for your newscasts, starting with your first draft.   <Link>

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by Ken Elmore
A breakthrough today in the world of external storage. Seagate, maker of hard drives and storage solutions, has kicked it up a notch and introduced the world's first 3 terabyte (TB) desktop drive.

With digital content now in the mainstream, audio, video and images are looking for new and more convenient places to call home and I dont mean in thumb drive here or DVD there. This is serious storage.

A 3 TB hard drive can store 120 full length HD movies, 1,500 video games tens of thousands of photos and countless hours of digital music.

Seagate's three terabyte desktop driveThe new hard drive is the  GoFlex™  hard drive, priced at just $250 it interfaces with both USB and Firewire, and gets along with both PC's and Macs.

Here is a little more info from Seagate's press release;

"Consumer capacity demands are quickly out-pacing the needs of business as people continue to collect high-definition videos, photos and music," said Dave Mosley, Seagate executive vice president of Sales, Marketing and Product Line Management. "Seagate has a tradition of designing products that break into new storage frontiers to meet customer requirements and the 3TB GoFlex™ Desk external drive is no exception—delivering the highest-capacity storage solution available today."

A recent report by Parks Associates indicates the average consumer household will see its digital media storage needs grow to nearly 900GB by year-end 2014, driven in large part by video downloads, managed copies of Blu-ray Disc, and increasing use of DVR recording capabilities1. The GoFlex Desk external drive delivers unconstrained2, high-capacity storage and automatic, continuous backup with software file encryption to help keep all data safe and secure3. The standard USB 2.0 interface can be upgraded to USB 3.0 or FireWire® 800 by coupling the drive with the appropriate GoFlex™ desktop adapter to increase file transfer performance by up to 10x for easier copying or sharing of files4.

You can buy the new drives at or at your favorite techo retailer.   <Link>

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QUOTE OF THE WEEK It's an intellectually disappointing, morally weaselly attempt to get anticompetitive aid from the courts while blithely ignoring the profound constitutional implications for news and the democracy. Jeff Jarvis on that argument that a 1918 "hot news" court decision protects media companies from aggregators.

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