Tag Archives: media

The Future of Content Monetization

Until the present day, advertising has been driven by catching the eyes (or ears)  of captive audiences. Large billboards, television commercials slotted between shows and ads placed between songs on the radio. Advertisers increasingly see the need to improve engagement with ads. Vast volumes of data enable the likes of Twitter and Youtube to deliver content users may want to see on the basis of past activity.

Ad monetization has existed as a popular business model primarily because monetizing small sums (on the order of pennies and cents) is too costly: transaction costs quickly add up, making it almost impossible to charge users on the basis of page views. An innovation I look forward to is the (potential) proliferation of bitcoin & lower transaction fees. This infrastructure will enable content providers to charge per view instead of having to slot unwanted ads on a page (or even force costly subscription models). Medium lends to an aesthetic I imagine of websites of the future: content driven engagement.

As health concerns become a greater priority, I foresee that mindfulness will rise in importance. Societies will recognize the danger of cognitive fatigue and prefrontal overuse. Perhaps a greater number of people will speak to the woes of internet addiction and continue to advocate creative thinking – and wandering, detached from mobile devices. People will become more conscious of what media they are consuming – and even further, may have a greater ability to log this digestion and derive insights from new discoveries.

We live in an era where the proliferation of computers has magnified the realm of human potential. We do have access to vast amounts of data – the next step is deriving actionable insights associated with the data. Along the way, society may learn to restructure the way media is distributed and consumed.

Text As the Optimal Medium for Transfer

A block of words may look similarly to another on a surface-level basis. I’m intrigued by how a body of text can store such a high degree of structure, information, and beauty. Where writing prevails is where other mediums fail: access to creation. TV and digital media require costly internet connections and production equipment. Audio recordings require knowledge of pre and post production processes. Design, graphic or tangible requires knowledge of a craft, whether it be photoshop or sculpture. Text enables individuals to deliver the greatest amount of information at the lowest cost.

The Future of Media

In an unfortunate and tragic sequence of events, Philando Castille was shot dead by an officer in Minnesota yesterday, July 6, 2016. The shooting yielded immediate attention by social media outlets and the press, as the diseased’s girlfriend recorded and streamed the aftermath on Facebook Live.

Objectivity

Numerous accounts of faulty witness testimony are affected by traumatic events. Recollections of events are impacted by how questions are posed, and numerous biases may impact how a viewer may recollect an event. In the future – in an age where digital capture and distribution becomes increasingly accessible – witness testimony may no longer be subject to human memory, but rather, computer memory. As seen in the Treyvon Marvin case, witness accounts competed for confirmation of whose voice was heard when screaming “Help!” during the incidents that transpired on February 26, 2012 – which raised the question: who was the attacker here, Zimmerman, or Martin? In the future, data capture will be cheaper, as will data distribution, making available more data for objective review in future trials. and incidences.

Technology

  • Access to data transfer and distribution technologies: data is becoming cheaper, and as a result, it’s possible to share more information at a faster rate. Innovations include: improved cell phone recording ability, improved data transfer speeds, and improved UI for user generated content communities (Youtube, Facebook, Twitter, Instagram, etc).
  • Type of data transfer: higher quality images and 360 video will transform how experiences are documented

What Is the Consensus Opinion?

It is now possible to track what media users are consuming. By extension, it’s possible to observe what themes / controversies rise (and fall) in popularity over time. The following include data sources I plan on digging in to and observing over the next few months:

  • Twitter: Hashtags and Influencers
  • YouTube: Influencers
  • Google: Searches
  • Facebook: Trending Data

Twitter NFL Streaming Package

Twitter Inc. just did its first broadcast deal, and it’s a big one. The company will stream 10 Thursday night National Football League games during the 2016 season, a package that cost the service around $10 million, according to a person familiar with the matter.

via Bloomberg

At around $1 million per game, Twitter is paying a small fraction of what would seem to be the market rate

  • Yahoo paid $17 million to stream a single game from London, which was played at 9:30 a.m. New York time and also broadcast on network TV in the teams’ home markets
  • In the most recent broadcast deal, CBS Corp. and Comcast Corp.’s NBC each paid about $45 million a game for five Thursday night contests each during the 2016 and 2017 seasons

“The platform is built around live events already. We want to see how they use the unique platform, and syndicated tweets all over the Internet is going to be interesting.” – NFL

Equity Environment Visibility: Themes and Trends for Media / Entertainment

New theme is that of visibility” – logging what I do know and knowing what I don’t know

Media / Entertainment

  • “Access Economy” – preference for experiences over ownership (and subsequent declining savings) (affecting capital allocation policies of younger people)
  • Abolition of Advertising by coercion and rise of advertising by engagement (entertaining ads, targeted ads based of search queries)
  • Evolving distribution frameworks (OTT, On-Demand) based on transition from cable / networks to internet models

SpringOwl VIAB Presentation

*  Key points of personal interest

General Notes: Key Stats to Observe

  • Properties & YouTube Subscribers
  • Studio % Market Share (by Revenue)
  • # of Productions in Top 30 Grossing Films List
  • Network Ratings (eg, MTV, Comedy Central, Nick, Spike, BET, VH1, TV Land)
  • Top Cable Series
  • Advertising Revenue

Material from SpringOwl Report:

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First Look: Lions Gate Entertainment (LGF)

Lion’s Gate is currently trading at 50% of its NTM P/E 52 week high.

Lion’s Gate is expected to endure a severe decline in profitability in 2016, yet is expected to rebound in 2017.

Products include distribution, film (MockingJay, Hurt Locker, Juno, the Red Violin), television (Mad Men, Orange is the New Black), video.

Trends affecting the company [1] include “cord-cutting” [2] (that affects viewing and advertising revenue) as well as competition from other at-home entertainment, primarily TV shows and videogames.

What differentiates Lion’s Gate from these trends is that  it is a content provider with no networks or cable assets, limiting its dependence on advertising. The biggest challenges to profitability thus far have been limited popularity from Mortedacai (Johnny Depp) and The Hunger Games. Resultantly, lowered guidance has been the main catalyst in driving the stock south. Longer term, the Company’s success is dependent on its ability to deliver “ok” movies at low cost.


 

[1] Reference: Thumbs Up for Lionsgate

[2] Cord-cutting: shift to internet delivery media from cable and broadcast

TWTR Q4 CY16 Earnings

Key Takeaways

Twitter missed on user growth but beat on business metrics on both the top and bottom lines. While Costolo has been criticized for being unable to meaningfully increase the pace of user growth as seen with the likes of Instagram surpassing the number of monthly active users last quarter, Twitter is shaping up from a business front. 3rd party integration with Flipboard and Yahoo Japan have enabled Twitter to develop an intriguing new revenue stream through the use of syndicated Tweets. Among other points of interest for Analysts during the Q4 call include its recent partnership with Google from a data front as well as continued focus on video integration in timeline. Costolo and Noto noted that the partnership with Google is not rolling out for the next few months. This news, however, combined with Twitter’s recent partnership with IBM signal that the Company is continuing to place increasing importance on the prospect of leveraging infrastructure software and data analytics to appeal to a broader swath of customers.

Market Reaction

Despite relatively low user growth – adding only 4 million MAU on a sequential QoQ basis – Twitter’s share price meaningfully increased in after-hours trading. According to Leigh Drogen, CEO of Estimize, a crowd-sourced web platform which aggregates user input on stock estimates, it is interesting to note that “Web 2.0” is placing less emphasis on the size of the user base and more focus on user engagement and converting engaged users to paying customers. While it may be odd that Twitter is shying away from an emphasis on Timeline Views and Monthly Active Users as critical metrics to model the business, it’s ability to generate earnings imply that the Company is shaping up to fill the shoes of an attractive business model for advertisers and content creators.

Implications

Twitter is placing increased focus on its integration with enterprise software Companies (IBM, Google) and is poised to be a key partner in industries to leverage its appeal as an analytics and advertising partner.

McClatchy (MNI) Earnings

The McClatchy Company

Balance Sheet 

  • Sold 25.6% interest in Classified Ventures to Gannet; resulted in proceeds of $631.8MM; expect after tax proceeds to be around $406MM
  • Pro Forma cash including after-tax proceeds from Cars.com transaction is $596MM (225.1MM pre)
  • Provide Co. with the liquidity to execute on digital transformation, reduce debt, and fund other corporate uses

Operations

  • Poor print retail environment performance, substantial decline in national advertising
  • Growth in revenues in digital advertising and audience revenues; digital only revenues grew 9.1% excluding the impact of the sales of Apartment.com
  • Non-print advertising accounted for 64% of revenue and grew by 0.5%