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 ManiaTV, one of the biggest online content studios, has tried to make money in a whole host of ways, from user-generated content (which it pulled the plug on in 2007), to letting brands sponsor skins on their video players, to branded entertainment like the Wrigley-backed Stage 5 show. But the five-year-old studio is about to launch its most ambitious venture yet: it's jumping into the music business with a new show called Making the Music, which effectively seeks to take over the role long played by the music labels. The original series is focused on hip-hop producer Scoop Deville as he works on a new album—and maniaTV will get a cut of the revenues once the LP is released.
Deville, who has produced songs for artists like Snoop Dogg, will preview potential album tracks during each episode; viewers get to vote on the best beat/rapper combination and the winning track gets uploaded to the site and iTunes each week. maniaTV CEO Peter Hoskins told me the show will serve as a hybrid promotional/market research vehicle: viewer analytics will give the team a better read on the demographics of Deville's fan base, which will help him decide when and where to go on tour. The studio is also signing up brand sponsors for Making the Music, further "mitigating the down side" of being in the music business, Hoskins said. So while maniaTV has got some skin in the game—the money it invests in Deville could potentially be recouped along the way if his album flops.
I asked Hoskins about how he thought the studio would fare in with ad revenues this year, since maniaTV laid off 20 employees last year and said it would be cutting back its original series output. "There are fewer buys, but we're getting larger amounts of money on each one."
Does that mean maniaTV is squeezing out some of the smaller digital studios? "A lot of studios are going to go by the wayside," Hoskins said. "There are people that could be just as stable in this game as we are, but they're getting cut out because they don't have the scale, or the existing relationships in terms of production, distribution or advertising."
The rest of our coverage is on our CES 2009 channel
Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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Ari Brandt has left his role as digital media head of Condé Nast Business Media Group Online and joined ad technology provider Linkstorm as CEO. Linkstorm's founding CEO, David Sidman, will stay on as chairman of the board. In July 2006, Brandt was tapped as general manager of digital media for Condé Nast Portfolio. Before that, Brandt served as director of ad solutions at Yahoo (NSDQ: YHOO), which he had held since March 2005. He oversaw the strategy for Yahoo Tech and was the business lead for Yahoo Finance and Yahoo News.
Considering the troubles major media companies have been having lately, going to a company that promises marketers improved ad effectiveness like Linkstorm seems like a sound move. Still, display advertising is troubled too. Nevertheless, as Brandt indicated in a statement, the challenges facing online media may also work in eight-year-old Linkstorm's favor.
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Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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 —Time: Media exec Jason Kelly has signed on as VP-strategy and revenue management of Time Inc. Digital. Most recently, he was manager of advisory services for Microsoft Advertising Publisher Solutions and before that, he developed strategic partnerships at Rapt.
—Mediabrands: Universal McCann's Quentin George is taking on the new position of chief digital officer of Mediabrands, but he'll remain global lead for digital media and strategic innovation at UM. Before joining UM, George was chief of corporate development and managing director at Organic Inc. (Via Mediaweek.)
—Turner: The company has appointed Monica Neal to the post of VP of emerging markets and partnerships for TNT, TBS and Turner Classic Movies (TCM). Reporting to SVP of marketing of those divisions, Tricia Melton, Neal will lead consumer-centric and integrated-marketing campaigns. She previously served as VP and station manager of Peachtree TV, Turner Broadcasting's Atlanta broadcast platform.
—Newsweek.com: Will Tracy is leaving the Star Tribune to join Newsweek.com as executive producer and editorial director. Prior to serving as managing editor of digital for the Star Tribune, he was managing editor of The New York Times on the Web.
Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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News that pre-holiday sales of Sony's PS3 console slipped year-over-year (in contrast to marked growth for the Nintendo Wii and Microsoft's Xbox 360) led some analysts to conclude that the PS3 is all but defeated in the next-gen console wars. Well, some big brand advertisers don't think so, according to Jonathan Epstein, CEO of DoubleFusion, one of the largest in-game advertising agencies. He told me that in-game ad campaigns for the PS3 were in high demand, and that the company had "sold every impression we have on the console." (DoubleFusion also brokers ads on Nintendo's Wii, among other consoles.)
Double Fusion serves ads in titles from THQ (NSDQ: THQI) and Eidos, among others, as part of a deal it brokered with Sony (NYSE: SNE) last year, while rival IGA Worldwide places ads in EA and Activision (NSDQ: ATVI) Blizzard's PS3 titles. Still, the PS3 lags behind the Xbox 360 even when it comes to advertising—as Microsoft (NSDQ: MSFT) opened up its console to advertisers back in 2006 (and gobbled up in-game ad firm Massive in the process).
Then, there's the pricing problem, which the WSJ highlights as a likely "key factor" behind the decline in sales. The cheapest PS3 still costs about $150 more than either the Wii or the entry-level Xbox 360. Sony brass continue to argue that the console's technology warrants the higher price, but you have to wonder if they're stuck keeping the price tag high because they've just come close to breaking even on the manufacturing costs (and because Sony's electronic sales are tanking overall).
But Epstein said that some of the hype about the PS3's demise is a little short-sighted: "People also said that the Wii was a fad when it first came out and was going to go away—and look at how successful it continues to be. From what I understand, the PS3 was designed to have a longer life-cycle than other consoles. The PS3 is a seven- to 10-year product—not a three- to five-year product." Maybe the market could have supported long-term investments in expensive hardware a few years ago, but with little to no growth forecast for electronics purchases in 2009, Sony may have to revise its strategy if it wants the PS3 to really thrive.
The rest of our coverage is on our CES 2009 channel
Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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 Mobile ad network AdMob released December figures Thursday, and while our usual caveat that these figures are from only one vendor still stands, they nonetheless highlight some interesting trends. Most notably, AdMob saw a jump in the number of ads it served up to iPod Touch users—from 86 million in November to 292 million in December. The requests doubled overnight on Christmas—suggesting that many people received the iPod Touch as a gift—and remained strong through the month.
So what's behind the boom and what does this mean for the iPhone? BusinessWeek says the increase is a matter of economics. While the iPod Touch is priced from $229 to $399, it is still more affordable than the iPhone, as consumers aren't saddled with a pricey monthly phone plan. Plus, with the growing number of games on Apple's App Store, the iPod Touch is presenting buyers with an alternative to a Nintendo DS or Sony (NYSE: SNE) PSP.
Indeed, Kleiner Perkins Caufield & Byers partner Matt Murphy, who manages its $100 million iFund for App Store developers, told BusinessWeek that aside form the Touch becoming a "legitimate gaming platform," young people are using it for social networking and other applications. He noted, "it's becoming a computer replacement." BusinessWeek also references a note from BMO Capital Markets analyst Keith Bachman that found Canadian telco Rogers Communications sold 130,000 iPhones in the December quarter, significantly lower than 235,000 in the previous quarter and wondered if more cost-conscious consumers are turning away from the iPhone to the iPod Touch. In Canada, Rogers charges $60 to $70 Canadian dollars (US$51-US$60) a month and customers are locked into a three-year plan. In the U.S., AT&T (NYSE: T) charges from $69 to $130 for individual monthly plans that run a minimum of 24 months. So yes, at that price, carrying around a cheaper phone to make calls along with your iPod Touch makes sense.
Mark Logic Digital Publishing Summit, Thursday November 6, Westin Times Square. Insight and perspective from Outsell, Gilbane, Simon & Schuster, BusinessWeek.com, more. Evening cocktail reception. Cost is complimentary. Register now!
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 Online video viewing continues to surge, but the ad dollars flowing into the space still aren't scaling accordingly. Panelists at the Reinventing Advertising Conference @ CES trotted out well-worn reasons for that imbalance: lack of standard metrics; high volume of low-quality content; building the right amount of reach, etc. But Brian Terkelsen, EVP and managing director at MediaVest's connectivetissue, (pictured) avoided the hand-wringing and laid it on the line: "Advertisers aren't being aggressive enough in general—they helped grow TV to where it is now, so I think it's partly up to them to drive video. If we don't challenge the industry to do things differently, we're screwed."
BitGravity CEO Perry Wu said time was already up for many of the smaller online video development and distribution studios: "We work with hundreds of content companies and to be honest, many of them won't survive. Indie sites that have premium news or sports content and a targeted audience can prove that they're valuable to advertisers—but some of the broad, more generalized companies will have a harder time."
Even larger video publishers like cable networks are at a crossroads of sorts. Steve Ronson, A&E's EVP, Enterprises, said the company is struggling to figure out how to make enough money from porting its "premium on air content" to the Web. "Do we run outtakes? Show snippets? Do we run long form but not cream of the crop?" he said. On some levels it doesn't have a choice, since viewers clearly want to access their favorite shows online—but Ronson said getting it to the Web sans the "millions of dollars worth of TV ads" is a "troubling issue." He added that many networks were weighing the ad-supported vs. subscription model or some hybrid of the two. (And with brand advertisers cutting budgets across the board, that subscription model is looking more and more lucrative.)
The rest of our coverage is on our CES 2009 channel
Our streamlined mobile application for the BlackBerry and other smart devices brings you the latest headlines quickly on the go. Click here to download.
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 —Google had 1M advertisers in '07: So while that secret is out, you can only guess how many more advertisers Google (NSDQ: GOOG) has now. UBS analyst Ben Schachter speculates the search giant has between 1.3 million and 1.5 million advertisers at this point. Citing an SEC regulatory filing, NYT reported that Google said it had 1 million advertisers as of 2007. The numbers have grown steadily: from 89,000 in 2003, to 201,000 in 2004, 360,000 in 2005 and 600,000 in 2006. But what hasn't changed is is how much advertisers on Google have spent on average, which is just above $16,000 a year on Google, roughly the same as five years ago.
—Will delete Facebook friends for (fast) food: If you've got too many Facebook friends—people you've probably never even spoken to—but haven't had cause to delete them, Burger King has an impetus to clean out your list. Much in the same odd vein as its four-year-old Subservient Chicken web spot, Burger King will offer Facebook members a coupon for a free burger if they delete 10 friends. Only one coupon per user account, though.
—Despite the down economy, ad effectiveness is up: That's the Online Publishers Association's interpretation of a Dynamic Logic MarketNorms report (PDF). For example, since the first report in July, brand awareness on OPA member sites rose 38 percent, while scores on ad networks have declined 19 percent. Also, brand favorability scores for OPA member sites have risen 27 percent, while ad networks, portals and MarketNorms have dropped 29 percent, 17 percent and 6 percent respectively.
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 RocketLawyer, a lead-gen provider for legal eagles, has raised $2.09 million in second-round funding from LexisNexis, PEHub reports, citing an SEC filing. The ultimate goal for RocketLawyer's second round is $3.09 million. The investment is fairly atypical for Reed Elsevier (NYSE: RUK) Group's LexisNexis, which gathers legal information as well as news articles. In general, LexisNexis tends to buy companies it's interested in outright, as opposed to making partial investments, PEHub notes. In any case, despite the increased likelihood of stricter regulatory oversight of online ad techniques, following some high-profile fraud cases over the past year, the practice of lead gen is poised to make a comeback, with companies under greater pressure to attract customers during bad economic times.
Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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 Women's magazine publisher Meredith (NYSE: MDP) is cutting 250 jobs which will result in a $16 million charge—about $9 million after-tax or $0.20 per share—in Q1. It will also shutter Country Home magazine after it publishes its March issue and relocate its ReadyMade brand and Parents.com properties to Des Moines, where Meredith is based. The moves were driven, naturally, by the deepening recession. Advertising, which accounts for 60 percent of Meredith's revenue stream, continues to trend downward, said CEO Stephen Lacy, and so the company is girding itself for a tougher year.
The added caution on Meredith's part is fairly sudden. Two months ago, it acquired a minority stake in Real Girls Media Network, as Meredith appeared to be avoiding the kind retrenchment being taken by other mag publishers. The company will release its earnings on Jan. 22. Release
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Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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Despite all the predictions for slashed VC spending and stagnant growth in new media this year, clearly there is still money to be spent, as we've already seen a number of fundings in the past week. But some unlikely companies may be stretched thin this year, Norwest Venture Partners principal Tim Chang told us.
"I'm concerned about Facebook," Chang said, when I asked him about the companies that he'd be watching this year. "Microsoft (NSDQ: MSFT) isn't likely to renew its search-advertising contract—at least not at the same rate—and Facebook makes a significant amount of money from that deal. Imagine if you lost $300 million worth of revenue—how would you make it up? It's not going to come from advertising, even if they have other ad platforms." (That also begs the question of what will happen to MySpace when Google (NSDQ: GOOG) renegotiates its search deal—though the social net has been branching out beyond ad sales as well). But what about Facebook's newly booming virtual-goods business? Chang said that the social net has actually missed the boat on that revenue stream. "They didn't figure out the value in virtual goods until it was too late, and now third parties are doing it instead. That's money they've left on the table."
Meanwhile, Chang said widget-maker Slide, which closed a mammoth $50 million round last January, is the "poster child of the Web 2.0 bubble. And if Slide spends through that money and has to raise again—I'd hate to be in their shoes. The onus is on them to find a business model beyond just advertising right now."
Chang wasn't all doom and gloom, however—he said that social gaming startups and the gaming industry as a whole would likely see stable revenue streams (not just from advertising) and continued investment from VCs in 2009. "We invested in myYearbook because they're making really nice money on virtual goods and microtransactions. Social gaming site Zynga is another one—they're making something like $30 million to $40 million per year mostly from people buying Texas Hold 'Em chips on Facebook."
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Discovery Communications gobbled up online reference site HowStuffWorks for $250 million back in late 2007, and network brass told us that HSW would be the company's "primary platform" for online growth. Well, has the company delivered on its promise? We asked Discovery's EVP of digital ad sales Kathy Kayse at the Reinventing Advertising Conference at CES:
—Increased traffic: "It's about a year into the integration process and we've seen significant growth in unique visitors and page views to both sites [Discovery.com and HSW]," Kayse said. "This year, we'll focus even more aggressively on cross-channel promotion and integrating more Discovery (NSDQ: DISAB) content onto HSW."
—Streamlined ad buys: Can a brand use a single RFP to run a campaign across Discovery's various TV channels and websites? Kayse said yes. "We're better positioned this year to provide more customized solutions, both pure-play and cross platform ... We're looking at a very strong Q1." She also said that she expected advertisers to continue to be willing to spend for newer ad formats like widgets.
—Branded entertainment series coming down the pike?: Given the glut of network-produced (and brand-sponsored) online shows—like NBCU and SciFi.com's Intel-sponsored Gemini Division series—we asked Kayse if we could expect any branded entertainment plays any time soon. The short answer—not likely. "We have a unit called Discovery Studios that creates branded content for the TV and web, and [the ad-sales division] would work on it if we had the right opportunity," she said. But, we can expect to find more of Discovery's own short-form video content popping up around the web. "We've been very aggressive about pushing our video content," Kayse said. "From our partnership with YouTube, to our relationship with AOL (NYSE: TWX), and we hope to announce more partners soon."
The rest of our coverage is on our CES 2009 channel
Check out the best business jobs in digital media. Go here for paidContent.org Job Board.
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Asked what Time Warner's plans for the AOL business and all its discordant parts—from access service to content and ad sales—CFO John Martin, in a Q&A at the 2009 Citigroup Global Entertainment, Media & Telecommunications Conference in Phoenix, said that the company is still enthusiastic about exploring "strategic relationships." However, to be realistic, this kind of economic environment isn't conducive to quick action. The comments were somewhat in contrast to what CEO Jeff Bewkes said last month at the UBS Media Week event, when he told attendees "I'd like to get it resolved, meaning clear… so AOL can be seen and valued… We need to do it fairly soon and we've been working hard on it."
—Still exploring alternatives: Martin: "We look at the company in three buckets, the cable, the content companies and AOL. With AOL, you have at least two big businesses in there. The access business has surpassed expectations in terms of cash flow. It's declining, but it's doing so at a predictable rate. The access business, though, is not strategic to Time Warner (NYSE: TWX). So we would be open to different options, but in this environment, we appreciate the free cash flow. As for audience size, AOL doesn't have the industry scale that some of other businesses do. So we've been in talks with other companies about creating alternative structures and seeing what we could do. But this is a tough environment to do any strategic relationships. We just completed 22 months of considerable growth in usage on the vertical channels and there is still reason to be optimistic."
Separately, Martin didn't shed any further light on Time Warner's negative financial forecast, which it released this morning. The company said it would report a net loss for 2008 ranging from $1.04 to $1.07 a share profit, instead of 5 percent growth, which it predicted back in November. More after the jump. —No relief from poor ad picture: Martin noted that the company would experience a $125 million impact related to poor ad sales at AOL and its publishing unit. "AOL has meaningful exposure to troubled categories, like autos and finance, and less demand for branded inventory. Looking at publishing, mag ad was trending down 20 percent in Q3 and looking to Q1, it's still a challenging ad environment. No one is willing to make early commitments to advertise."
—On TWC: Martin: "We remain optimistic that the regulatory approval for the spinoff "is a Q1 event, though I can't predict that. They have $13 billion in cash and debt availability. There are no considerations for changing the size of the $11 billion dividend, which will take its leverage up to 3.75 terms. In the last three months, it has reduced leverage by half-a-term. We still believe this is a transaction that's in the best interest of both companies."
—Mag business better than newspapers: All print is not created equal, Martin stressed. "Eighty percent of adults still read mags, less than half read newspapers. In 2007, mag ads were up, newspapers were down. Last year, both were down, but newspapers were down more. We don't have the exposure to classifieds that newspapers do, and that is a major difference. In any case, readership is up. But we are not sitting on our hands. The publishing unit recently reorganized around verticals and cut the global workforce 7 percent."
Related
Social Media Deals Report: This 199-page report, filled with charts and data, examines the categories, number and size of VC and M&A deal in social media from 2007 through 2008. Visit the ContentNext Reports page
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 In the wake of the financial meltdown, analysts slashed their 2009 forecasts for ad spending on "experimental" mediums—including campaigns in and around video games. But execs at the GamePower Conference @ CES said they're actually banking on an increase in ad spending this year, and here's their argument:
—Gamers like ad-supported content: Microsoft (NSDQ: MSFT) launched its new Xbox Experience in mid-November, and since then, two of the most downloaded items have been backed by ads: Doritos' Dash of Destruction game, (which has amassed almost a million downloads) and The Guild, a Sprint-sponsored series focused on online gamers.
—Success metrics go beyond just ratings points or impressions: While ratings of SpikeTV's Friday night game show GTTV are "solid," Spike's Geoff Keighley, executive of game publisher relations, says gamers are watching the show on the Web, downloading it on iTunes, and even paying $3 an episode for it through the Xbox Live marketplace—and that's with the regular TV spots or sponsorship ads included. "They can see the show on TV for free, and yet they pay to get it on their console," he said. That adds up to more revenue for SpikeTV, but also more face time with their target audience for advertisers.
—Other options for reaching the young male demo are slim: "If [advertisers] are targeting that core gamer market of 18-to-24 or 18-to-34 year-old males, it's hard to access them in other spaces," said Michael Herst, EA's director of entertainment development and programming. Cisco Systems (NSDQ: CSCO), for example, is a prime sponsor of MTV Games' Rock Band 2. That sponsorship includes a call to action on the game box (telling gamers to check out a special Rock Band 2/Cisco documentary), and the series is showcased on both the game's and Cisco's websites.
Mark Logic Digital Publishing Summit, Thursday November 6, Westin Times Square. Insight and perspective from Outsell, Gilbane, Simon & Schuster, BusinessWeek.com, more. Evening cocktail reception. Cost is complimentary. Register now!
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BabyCenter, the social net and eCommerce site run by Johnson & Johnson, has closed up its online store to focus strictly on its media side. Tina Sharkey, global chairman of BabyCenter, wouldn't tell AdAge if the reason for the abandonment of online retailing was due to a lack of profitability. Sharkey did say that BabyCenter is looking to strike deals with other marketers and will still have a retail partnership with Diapers.com
In a sense, moving away from eCommerce returns BabyCenter to where it was when J&J cut retail from the site after it bought the company out of bankruptcy for $10 million in 2001. And since BabyCenter claims 78 percent of the market for U.S. parenting sites, Sharkey believes it can build on its display business, even at a time when many marketers are pulling back and concentrating on search.
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Mark Logic Digital Publishing Summit, Thursday November 6, Westin Times Square. Insight and perspective from Outsell, Gilbane, Simon & Schuster, BusinessWeek.com, more. Evening cocktail reception. Cost is complimentary. Register now!
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JP Morgan may be forecasting slower growth for online video ads, but it looks like VCs are still feeling good about the format ... One True Media, the CA-based firm behind the self-serve SpotMixer video ad platform, has picked up $9 million in a second round of funding. DAG Ventures led the round, along with previous backer Kleiner Perkins Caufield & Byers and an investment from NTT Finance.
The firm plans to use the money to help scale out SpotMixer, which is currently used by Yellowbook, YouTube and Google (NSDQ: GOOG) AdWords, but there are a host of well-funded competitors that provide similar, but not identical services: Overlay.TV picked up a $3.8 million second round in December and Blip.tv got $5.2 million in October to help develop new ad technology.
Related
Mark Logic Digital Publishing Summit, Thursday November 6, Westin Times Square. Insight and perspective from Outsell, Gilbane, Simon & Schuster, BusinessWeek.com, more. Evening cocktail reception. Cost is complimentary. Register now!
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