i3 - March/April 2016 - 44

Business

BY GARY ARLEN

E N T E RTA I N M E N T M AT T E RS

ony Electronics President/
COO Mike Fasulo plunged
into the fundamental issue of
the new entertainment ecosystem
during his CES presentation about
Sony's goal for new technologies:
"We are delivering the best experience and by doing so we're making
money."

Similarly, each study that shows advertising
revenue on digital/broadband platforms
is outstripping broadcast ad income is
contradicted by the next report that TV ad
sales are stronger, and TV commercials have
more impact on consumers.
And then the cycle begins again, and
money is earmarked for the new "best"
thing. Adding to these research contradictions are the executive disputes about the
very essence of how to monetize the new
platforms.

Young U.S. audiences
use almost three times
as many devices to
watch TV content
Viewers
Viewers
over

18-34

Although Fasulo's view came from the
equipment perspective (largely 4K Ultra
HD and PlayStation consoles), his comments touched at the heart of the new
media agenda. He acknowledged that the
scale of products and services are substantially different from the old days of massive nearly universal device distribution.
"Making money" or "monetization" has
remained the core conundrum of the digital
evolution in today's fragmented environment. It's easy to be confused about how
to do it, thanks to the dueling data. For
example, every research pronouncement
about the scale and financial impact of cordcutting (dropping or trimming cable TV
subscriptions) is countered with a contrary
study that offers statistical proof that young
audiences are watching more TV than ever.
44

MARCH/APRIL 2016

Tied to the Web
At CES 2016, NBCUniversal CEO Steve
Burke said his company's cross-platform
approach plus its ventures onto digital
platforms are essential. "We need to start
getting better at distributing our product
on the Internet and getting better at creating new Internet businesses," Burke said
at his C Space keynote for the content and
marketing conference track. He noted that
the biggest challenge facing companies
like NBCU is the "increasing impact of the
Internet on our businesses." Burke added,
"One of the reasons we invested in Vox
and BuzzFeed was to learn from them."
Robert Kyncl, YouTube's chief business
officer, also was enthusiastic about the
growth of digital viewing. "I don't think
digital video will grow linearly. It will grow

exponentially," Kyncl said in a keynote
describing non-broadcast video. His bullish
outlook is backed up by YouTube's (and
parent Google's) expansion of made-forbroadband content, along with creative
advertising strategies to generate revenue.
Yet there are still skeptics. Financial
analyst Laura Martin, managing director
at Needham & Co., said at CES that one of
her media clients had seven billion digital
views last year but only earned $7 million
for all that traffic. "There's no money in
digital," Martin said. "Unless you have the
powerful economic machine of television,
you're losing money today."
Such varied viewpoints were underscored throughout CES sessions about
preferred viewing options. Many speakers cited data on the growing trend
toward watching video-including TV
content-on mobile devices. Paywizard
CMO Bhavesh Vaghela cited a study that
found young U.S. audiences (ages 18-34)
use almost three times as many devices to
watch TV as people over age 55.
He said that based on audiences' device
preferences, content providers should
"employ sophisticated customer retention
tactics that target specific personal profiles
from marketing to billing to personalizing
the user experience."
Mobile Video Viewing Up
Just before CES, an eMarketer study of
"media consumption time" showed that
time spent with digital video content (primarily via mobile devices) will climb from
47.3 percent in 2015 to 50.5 percent in 2017,
while conventional TV viewing time will
drop from 36 percent to 33.8 percent, showing marketers where to put their money.
There are plenty of efforts to establish
multiple revenue models. Jeremy Helfand, vice president of Adobe Primetime,
said at CES, "The industry is focusing on
monetization," using the new tools of "ad
insertion, ad decisioning, fulfillment and
measurement of advertising." He said,
"We're focused on how to monetize the
value of content."
I T I S I N N O VAT I O N

Eric Audras/Getty Images

BEYOND MERE
MONETIZATION

http://www.cesweb.org/News/CES-TV/Video-Detail?vID=U08k1gtRhn3Y&dID=DliGIusJiD1C&sID=OhYr3WpdgEMj http://www.cesweb.org/News/CES-TV/Video-Detail?vID=U08k1gtRhn3Y&dID=DliGIusJiD1C&sID=OhYr3WpdgEMj http://www.cesweb.org/News/CES-TV/Video-Detail?vID=UkMQ7lLtJSy0&dID=DliGIusJiD1C&sID=OhYr3WpdgEMj http://www.cesweb.org/News/CES-TV/Video-Detail?vID=UkMQ7lLtJSy0&dID=DliGIusJiD1C&sID=OhYr3WpdgEMj

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