TRUSTVERTISING - Written by Dmitriy

TRUSTVERTISING

While driving to work in the morning and listening to the ever soothing news of U.S. economy slowly crumbling into a recession to a mellow jazzy tune mixed by the folks on NPR station, I had a privilege to listen in on one conversation about online advertising and its near future focus. A few weeks ago I heard a piece about one of Ebay’s top brass “leaving” the company to work for senator Hillary Clinton’s campaign. In that piece the host and one of Ebay’s execs talked of how the most important features that will be focused on this year by websites and web based businesses is web security and even more importantly, trust. Trust here means protection of identity, enhanced privacy, financial credibility, and a variety of other security measures aimed at creating a comfortable non-intrusive space for the consumers to flourish and create a social network in.

What the morning piece today revealed is that trust is exactly what web advertisers are focusing on as well. Or more or less its exploitation for advertising. The thought process here is as follows. It is becoming more prominent through social networking sites and instant messaging for you and your friends to find funny videos and separate pieces of interest. What is becoming more and more of a reality is that these videos have some kind of advertisement plastered around them. A good example is youtube videos that have a TV show ad popping at you at the bottom of the tube window or hovering a mouse over a keyword that pops a window with directions to the nearest drug store(?). What the morning piece heavily discussed is the deliberate focus on propagating these kinds of ads through what they called friendvertising. Basically a strong focus on using your friends as advertising vehicles, to get to you, by enticing them to share the content with you that on the surface (puppies) is un-comparable to what the core (pepsi) might get in return. Whilst your friends perhaps are not paid (?, unless of course you have more than 1,000 friends) for doing this, they are susceptible to share news blurbs and pop culture without realizing that they just became a billboard.

Now I already regularly deny emails from my friends to check out videos of cute kittens and other short term memory distractions. This has nothing to do with my friends themselves or for that matter it is not a reflection of my more-of-a-dog-person personality; but it directly has to do with the fact that I am simply overly aware that wherever I will click, an ad will click back at me. This for the longest time has been the strategy of spam marketers that is slowly being more controlled through unsubscribing initiatives and laws. The problem is that now spam will come from friends that you have an actual trusting relationship with. What seems to be the biggest point of contention for me is that focus on “trust” here is not to benefit the consumer but rather to exploit the possible trust links between people as advertising vehicles.

This raises a few topics.

Is this fundamentally wrong or just a different and quite genious way to get the people the products they desire?

Do we see a shift in inter-personal trust due to an increase in advertising and advertising vehicles?

And finally would the choice ever become exclusive between kittens or friends?

I hope I’ll never have to decide.

Dmitriy Aristov

Will Blockbuster movies now have to compete for space with Blockbuster Video Games?

The article below suggests that the timing of release for Iron Man will suffer from competition with the release of Grand Theft Auto (GTA):

http://www.nypost.com/seven/04202008/business/media_battle_on_tap_107324.htm

This is suggestive of the rising importance of video games as a medium. Will movie studios have to be more careful of their timing to ensure they don't square off blockbuster games?

Gameasure gets big press - Advertising Age article

Gameasure got big press this week in Advertising Age, with extensive quotes from our leader Michael Dowling:

http://adage.com/digital/article?article_id=126153&search_phrase=gaudiosi

The article details some of the value Gameasure adds to metrics on video games by measuring total reach, not just sales. Only Gameasure captures this data, which is crucial to gauging the true value of advertising in and around games. As the article suggests, buyers of advertising in video games may be getting a bargain.

Recent NPD Data - The danger of PR - When figures just don't look right (Thanks Regan and Dino for contributing the cited articles)

NPD recently reported that 72% of Americans are gamers:

http://www.gamasutra.com/php-bin/news_index.php?story=18107

This data was widely reported on the web before people began asking the obvious question - is this really believable? Soon the PR was being corrected:

http://www.gamedaily.com/articles/news/npd-72-of-us-plays-games-online-gaming-still-relatively-small/?biz=1

Indeed the original story did not square at all with what we've seen in 4-5 quarters of Gameasure and people began to ask questions about NPD's findings. Gameasure typically finds that just under half of Americans aged 12-65 have played video games. The question in Gameasure is very broad and asks people if they have ever played video games on every conceivable platform. They only need to have played a video game once to qualify. They do not need to play regularly. Adding in a requirement that they play for at least an hour per week, the percentage drops to 46% in Wave 4. This is a far more realistic figure than the 72% originally reported by NPD, and closer to the revised figure of 59% (still too high if you ask me). A figure closer to 2 rather than 3 out of 4 people seems more realistic, and is backed by numerous waves of data in Gameasure.

The only data point that reaches near the higher NPD figures in Gameasure was the casual gaming data gathered in Wave 4. When asked if they had ever played a casual video game, 68% of people said they had at some point. We only have one data point right now, but will soon be able to see if this was an anomaly. If it is not an anomaly, a large proportion of people are identifying with PC based casual games, but not with video games. Nonetheless it also points to how misleading the data can be. It is likely that the 22% of Americans who are in-between active gamers (46%) and total casual gamers (68%) don't have much idea about video games - at least not yet.

Some of the figures are close to ours. NPD finds that 3% of Americans own 2 out of 3 current generation consoles (still called 'next-gen' in article). Gameasure finds this is as high as 3.6%. On the other hand Gameasure only finds that 1% own all three consoles, not 2%. The 1% was also an unstable base size, 84 respondents out of 9,089.

The NPD press release shows how misleading improperly defined market research can be, especially once it is filtered through a press release. The report was successful at gaining press, but likely resulted in many people questioning the credibility of NPD's data. There does not appear to have been an objective look at the numbers before press release. It's important to step back and see oneself as the client - is what you have to report really believable?

Geocaching! - Theresa wrote a great article all about this activity that meshes the online world with reality

After reading Robyn’s interesting blog post about the UK company who wants to bring gaming back outside, I thought instantly of sharing a family activity I have come to enjoy over the years (one my father is VERY active in) … Geocaching! There is so much information out there on Geocaching that its been difficult for me to narrow it down, so I have included a bunch of interesting links for those of you who want to learn more about it.

I read that “more than 750,000 people are hiding and searching out caches (a hidden item can be as large as a box to as small as a mint tin… there are also “travel bugs” which travel from cache to cache with a goal of making it to a far off place) from Finland to Fresno, and clubs of geocachers are cropping up around the world. Most people post their caches and finds (i.e. things they hid, and things they found) online at the website www.geocaching.com. Through word of mouth, press articles, and even accidental cache discoveries, more and more people have become involved in geocaching. First started by technology and GPS enthusiasts, the ranks of geocachers now include couples, families, and groups from all walks of life. The excitement of the hunt appeals to both the inner (and outer) child. Today you can do a search on just about anywhere in the world and be able to walk, bike, or drive to a nearby hidden cache.”

Anyone can search for a listing of geocaches hidden anywhere in the world on the official website (I suggest taking a minute to see what’s around you! Or even check out what’s hidden in Iraq!). Most geocachers create profiles (and some pay for a premium membership which offers additional features), it seems very similar to a social networking site for people who play this fun online/outdoor game!

Geocaching official website- http://www.geocaching.com/

RANKINGS Who has the most finds? http://www.cacherstats.com/Rank1-125.html

The Documentary (award winning) from USC- (my dad Steve O’Gara a.k.a. “Ventura Kids” is in it J the “bad guy”, but he’s really not bad!)

Official website- http://www.geocachingthemovie.com/ IMDB Listing- http://www.imdb.com/title/tt0818650/

“This documentary explores the emerging world of high-tech hide-and-seek called geocaching. Meet TRUROKR, family man; his rivals, the Ventura Kids, and lovable geek Aerospacecase. A humorous and poignant portrayal of four fascinating people and their feelings about competition, community, and the quest for the elusive Tupperware container.”

A News Article or Two…

USA Today Article- http://www.usatoday.com/travel/destinations/2007-01-22-geocaching_x.htm

ABC News Video on Geocaching- http://www.abc3340.com/news/stories/0208/494576_video.html?ref=newsstory

BBC- http://www.bbc.co.uk/insideout/northeast/series3/geocaching_treasurehunt.shtml

Some Companies involved in geocaching….

Jeep Sponsors Geocaching Events/Prizes- http://jeep.geocaching.com/

Jeep computer game for geocaching- http://www.jeep.com/games/geocaching.html

Unite for Diabetes (Travel Bugs & Contests)- http://unite.geocaching.com/

Magellen- http://www.magellangps.com/news/releases/viewRelease.asp?id=361

Garmen- http://www8.garmin.com/outdoor/geocaching/

Innovative Adventures (Sponsored by Nissan)- http://outside.away.com/nissan/microsite_04/geocaching/overview.html

Market Research, Creative, & Viral Networking (Thanks Regan for contributing this article)

Regan sent me a link to a most interesting article:
http://www.hollywoodreporter.com/hr/content_display/news/e3icc586a5d1a4f3c60803eb84167aec807?pn=1


The article discusses the as yet unreleased movie 'Fanboys'. It was originally written and filmed as a dramatic comedy but then the producer decided to remove the drama and just make it a comedy, testing which version would do better - a simple case of market research? Then a group of fans emerged to back the original dramatic comedy version, which banded together virally through the Internet. The movie now has a ton of free press and should do very well, but what does this say about movie making, market research, and viral networks?

Locomatrix: Bringing Gaming Back Outside (Contributed by Robyn - Thank you!)

Mixing videogames with physical, outdoor games, Locomatrix is designed to get kids off the couch, without making them leave their virtual worlds. Based in the UK, Locomatrix offers games that kids play in both the virtual and real worlds. Using a GPS-enabled device like a cell phone, kids (and I suspect adults) can play games like “Treasure Hunt”, in which users must visit real locations based on picture clues that appear on their device. A thermometer on the screen informs the gamers whether they are getting hotter or colder, relative to the destination. Fruit Farmer is another game where participants run around trying to collect fruit that appears in the virtual world, while avoiding virtual obstacles and being captured by killer wasps.

Locomatrix is all about being active and socializing. Although they currently only offer two games, Locomatrix invites gamers to create their own levels and share them with their friends and the Locomatrix community. There is also a forum. On the message board, gamers invite others to try a game they created, troubleshoot their GPS devices, and brag about past wins. Not to mention, when games are played, they are also uploaded to the Locomatrix website, so others can see the date and time of past games.

What if gamers wanted to setup a game in their hood for all the uber-hardcore Treasure Hunters or a slower-paced Fruit Farmer game? Could Locomatrix benefit from "HUSH HUSH SECRET PROJECT"?

http://www.locomatrix.com/

Is the future of gaming on the PC? (Thank you Dino for contributing this one)

Note St. John's comment in the article below: “… if the low end of the PC market, the mass market PCs that everybody buys did not come with these crappy graphics chips on them and was not burdened with a fat OS, then the PC would be a larger contiguous gaming platform than all the next-generation consoles combined."

http://pc.ign.com/articles/861/861239p1.html

Gameasure data suggests that the PC, despite this, is still more preferred than any of the current gen consoles.

Trends in Casual Gaming & Advertising

This article is an interesting interview with Dave Williams, Senior VP of MTV Networks' Shockwave.com and Addicting Games:

http://www.emarketer.com/Article.aspx?id=1006068&src=article2_newsltr

Mr. Williams argues that advertising in video games is increasingly moving towards in-game casual, borne out by eMarketer's projections of where in-game advertising will be spent over the next 4 years. They predict that growth will be concentrated in web-based video games (many of which are casual). Intriguingly, eMarketer's figures show that video game advertising will total $1B by 2012 (in today's dollars, not the greatly devalued dollars to come - but that is an economics not a market research story).

Who we should hire to make a movie for Interpret ...

http://www.youtube.com/watch?v=AC0sR5_NTFo

Double Fusion's Thoughts on In-Game Advertising - Appear to be heavily influenced by our Casual Gaming White Paper

Double Fusion (DF) is a good client of ours, and intriguingly the CEO of DF has just been interviewed by GameDaily on the subject of in-game advertising:

http://www.gamedaily.com/articles/features/my-turn-the-second-wave-of-ingame-advertising/?biz=1

In it he argues that in-game advertising is about to begin phase two of leading the way in the casual gaming space. Perhaps he was inspired by our recent casual gaming white paper? Advertising will have a greater impact in casual gaming because it is increasingly essential to the business model of giving such games away for free. Seen in this way, in-game advertising is 'an entirely new opportunity to build the gaming audience'.

More signs of Hollywood moving towards Video Games (contributed by Dino)

Genius Products Moves Into Game Publishing

http://www.gamedaily.com/articles/news/genius-products-moves-into-game-publishing/?biz=1

Pirates of the Caribbean Director Gets Game

http://www.gamedaily.com/articles/news/pirates-of-the-caribbean-director-gets-game/?biz=1

Posted by Dmitriy (Thank you Dmitriy!) - EA has partnered with IMG

EA announced a multi-year strategic partnership with IMG, a licensing, marketing, and media company. IMG plans to extend the EA sports brand into innovative businesses on a global scale. IMG plans to use the license from EA to create a variety of new products and apparel with EA sports on it. Expect to see EA on footballs, hats, and of course… on athletic supporters.

http://www.ea.com/article.jsp?id=easimgfeb1408

Thank God for the EU? Microsoft gets nailed.

At least one government has the wherewithal to stand up to the monopolistic beast that was Microsoft. Unfortunately it may be a little too much and certainly too late. The damage has largely been done, but this decision should loosen what remains of Microsoft's stranglehold on creativity and computing.

http://news.yahoo.com/s/ap/20080227/ap_on_bi_ge/eu_microsoft

Dmitriy raises an interesting question - when does consolidation in gaming go too far?

Thank you Dmitriy for bringing this article to our attention. Basically the article asks if EA's takeover bid of Take-Two, which is likely to go ahead with or without Take-Two's approval, is a step too far. Is this takeover part of a wider trend towards industry consolidation that might spell the end for video gaming creativity? Or will it strengthen the ability of video games to go further?

Undoubtedly the creation of a duopoly could be bad for creativity and for consumers in general, assuming that such a duopoly (i.e. EA and Activision) is able to inflate barriers to entry so as to prevent competition. Yet it is hard to see how EA and Activision would be able to create sustainable barriers to entry - unlike Microsoft which was able to dominate the PC market for so long by owning the operating software. Video games can still be created by anyone. The consolidation that is occurring gives EA and Activision an advantage in the creation and distribution of mulitmillion dollar hits such as Halo 3. This is in fact a reflection of increasing economies of scale, and means that games should get better. If the investment of millions doesn't lead to equivalent sales, there is nothing EA and Activision can do to force the market to repay it. So we should not worry about consolidation following its natural course, so long as this does not create significant barriers to entry.

The article is here:

http://www.news.com/8301-13772_3-9878724-52.html?part=rss&subj=news&tag=2547-1_3-0-5

Will Google and YouTube do to TV what the Internet has done to Newspapers?

The following article asks an interesting question - does the marriage of Google and YouTube (and similar pairings to come) spell the slow demise of TV? We are in an age of new media pushing out the old, but still have some way to go before this will happen. The networks have time to get it together before we can all easily and seamlessly watch video downloads on our TVs. For most people, watching TV remains a couch potato sport. TV is about switching off the brain and relaxing, not fiddling with a small computer screen to get the latest low-resolution 2 minute download. The Internet will compete with TV once it becomes easily and cheaply navigable by remote control. Nonetheless this will happen. The marriage of Internet and video should also open the competitive field in TV to a lot more players than have been supportable in the past.

http://online.wsj.com/public/article/SB120389566416389289.html

A related article discusses how ABC plans to beat off the DVR. DVRs are unpopular with cable providers because they are expensive to distribute and maintain:

http://www.nytimes.com/2008/02/25/business/media/25abc.html

Microsoft's attempt to buy Yahoo! - a lucky escape?

Yahoo! thinks that Microsoft's $40bn offer undervalues the company, but it's hard to see how Yahoo! has any better options. In fact the $40bn Microsoft is offering Yahoo! would probably go a lot further if it were invested elsewhere.

http://www.nypost.com/seven/02242008/business/microsoft_holders__yahoo__40b_a_joke_99003.htm

Indeed, if Microsoft succeeds in obtaining Yahoo! for such a high figure, it might become known as the next AOL-Time Warner deal.

Courtney's Post - Is Technological Growth Exponential?

Futurologist Ray Kurzweil gave a keynote at GDC this week. Did anyone who went see his speech? If his predictions are at all accurate and technological growth is indeed exponential (opinions?), we’ll soon need to start working on a version of GamerLog that’s implantable into our nervous systems!

http://www.gamedaily.com/articles/news/gdc-kurzweil-talks-of-the-future-and-gaming/?biz=1

Tax Time tip - get 2.63% back on your tax payment

Here's a fiddle I saw posted on the net. A credit card being promoted on the net gives 5% cash back for the first three months while the IRS only charges a 2.5% fee for using a credit card. Thus you can pocket the difference, if you have to pay taxes:
http://www.bankaholic.com/2008/get-263-cash-back-on-taxes/

I'd make a bet these websites take off ... unless the Feds find a loophole

Jason recently forwarded us all an article from the Wall Street Journal that discusses some new websites where gamers can match up with other gamers and bet real money. The combination of socializing with gambling should be potent in attracting hordes of gamers, and I'm happy to bet that some of these sites will be extraordinarily successful. Yet if they are too successful, they will doubtless attract negative legislative action to shut down their gambling facilities. If that point is reached, the easy conversion might be to make them into social networking sites for gamers ... aka Gamer Log?

Getting all Licked up ... (article donated by Regan)

Ever wanted to sample taste an ad? The technology is here and the big exchange of saliva can now begin! Yes, this is definitely not an ad to share with anyone.

http://online.wsj.com/article/SB120287036186164289.html?mod=googlenews_wsj

Something fun and free to download this weekend - Guitar Hero: Aerosmith

If you have Xbox Live or the PS Network you can get a free copy of Guitar Hero: Aerosmith's song 'Dream On' this weekend. This is also easily their best song ...

http://www.gamedaily.com/articles/news/aerosmith-rocks-guitar-hero/?biz=1

Will all new media be paid for by advertising? Video games heading for 'free' ...

Video games are increasingly going the way of being ad supported. The obvious and established examples of ad supported video games are mobile and casual games. Gamers are widely supportive of ads in these games. In both Waves 3 & 4 of GaMeasure, 85% of respondents indicated a preference for casual games that were provided free with advertising over having to pay for casual games without ads. This shows the importance of presenting respondents with real world trade-offs, as when the same respondents were asked about in-game advertising over a third were against them.

The obvious question from the video game industry perspective is, how far can the ad supported model go? Many console games are already ad supported, especially sports games, even though they cost $50 and up to buy. Now these core games are testing the water of dropping the hefty price tag and seeing if ads can support them. EA Dice will release Battlefield Heroes for free later this year. Apparently the game will not have any in-game ads, only around-game ads. EA Dice will place ads on the website promoting the game and on the game's menu, but not in the game itself. Interestingly, Battlefield Heroes will also veer towards a more 'cartoony' style than other Battlefield games. No doubt this is a bow towards the cartoony style of many casual games and an attempt to appeal to casual gamers.

http://www.gamedaily.com/articles/features/ad-watch-ad-sponsored-games-enter-battlefield/71374/?biz=1

Some questions emerge: 1) how many video games can advertising support?; and more generally 2) how much new media can advertising support? The current business model of the average website is to be ad supported, but with an endless possibility of websites (this blog for instance), the competition for advertising is potentially equally endless. Only a few very popular websites can make much money. The question is how to generate sufficient traffic. Probably core games will continue to be largely supported by consumer purchase. Yet increasing competition could force publishers to find a balance between lower consumer prices and more advertising. Only time will tell?

Another Death Knell for HD DVD - and a Hollow Victory for Blu-Ray

The Warner Brothers decision has fed on through the line - Netflix will no longer buy HD DVDs. We should expect all other rental shops (online and offline) to follow suit.

http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=12070

Yet does it really matter? This is not the same format war as VHS and Beta. The quality increase (both in terms of picture quality, new capabilities, and convenience) simply isn't big enough from DVD to Blu-Ray or HD DVD. It is unlikely that Blu-Ray will become the new DVD. It's future appears to be more like the laser disc.

In fact the GaMeasure data strongly suggests that HD DVD was killing Blu-Ray, even up until the last quarter (Wave 4). In Wave 3 about 10% of Americans aged 12-65 said they owned an HD DVD, while only 3.8% said they owned a Blu-Ray. For likelihood to purchase in the next 6 months, 7.3% said they would probably or definitely buy an HD DVD, while only 5.5% said they would for a Blu-Ray. In Wave 4 we see that HD DVD was becoming far more successful than Blu-Ray, increasing to 12% of Americans owning one, while Blu-Ray stood still at 4%. Undoubtedly this was due to HD DVD's successful tactic of lowering prices to near DVD equivalent in the run up to Christmas. Despite the Wave 4 data being collected AFTER Warner Brothers announcement, 7% of Americans still said they would definitely or probably buy an HD DVD, beating the 6% plumping for Blu-Ray. An NPD study finds similar results.

http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=12074

Blu-Ray's victory is a hollow one. What's the real lesson? You need to provide consumers with a large and significant advantage to prompt widespread change from one format to another - witness the failure of the minidisc and the laser disc, and the clear success of the DVD. Blu-Ray and HD DVD could probably only have become the dominant format by selling at the same price or lower than DVD, negating the whole reason for doing it in the first place. In fact Blu-Ray's 'victory' will discourage any further price reductions, sealing its slow demise.

The format to replace the DVD will most likely be the digital download - cheaper, easier, and more convenient.

WGA to include Video Game Script Award - contributed by Dmitriy

While driving to work, I heard on NPR that the Writer’s Guild Awards will include a category for Video Game Writing (Script or Story). The spokesman said that the story will drive a lot of video game sales with the current consoles now fighting for titles rather than performance. Those that include a good story will probably sell much better.

The award is a landmark to draw more attention to Video Game writers. Writing in video games brings the graphics and the action into context, whether fictional or attempting to simulate reality.

From personal experience, a lot of that writing is way better than scripts in 3/4 of Hollywood movies. I’m not going to even comment on TV. Some of the role playing titles, though fictional, are actually quite complicated and very developed. You find yourself cracking open the good ole dictionary once in a while as well.

Related article:

http://www.gamedaily.com/articles/features/feature-video-game-writers-seek-recognition/71369/?biz=1

Out with the Old Media and in with the New Media?

The death of the newspaper has been a long-heralded event, but until recently it was much more heralded than actually seen. In fact many newspapers were bringing in a 20% profit margin until recently, but the problem for their stocks has been the apparent lack of potential for future growth. It now looks like the death-knell is beginning to fall, and to fall rapidly in terms of ad revenues. This article is an interesting look at the situation:

http://www.nytimes.com/2008/02/07/business/media/07paper.html?_r=1&oref=slogin

We are still in the middle of a huge transition in media - from the old (newspapers, TV, radio) to the new. One question is - why has it taken so long? After all the Internet has been going strong for years.

The shifting situation is reflected in two further articles. The first is a memo to the Wall Street Journal staff, and the second is far more interesting if probably erroneous look at the interaction between Hollywood and new media. Are YouTube and reality TV a real threat to Hollywood? I doubt it, but then again a majority voted for Bush the second time around ... so stupid can sell a lot:

http://online.wsj.com/public/article/SB120234843822049385.html

http://www.vanityfair.com/culture/features/2008/03/wolff200803

Writers Strike looks to be over very soon ...

As the Writers' Strike has worn on, it has become increasingly important for the Writers' Guild to save face. It looks like a win-win deal has been struck that may be announced by next week: Writers will get paid for Internet content and Producers will be able to get back to producing.
http://www.nytimes.com/2008/02/02/business/media/02cnd-writers.html?_r=1&oref=slogin

http://www.nypost.com/seven/02062008/photos/biz044.jpg

http://www.nypost.com/seven/02062008/business/strike_breakthrough_553997.htm

Conflicts of Interest in Action - the GameSpot Journalist Integrity controversy - submitted by David

The article below summarizes and dissects in great (and grave) detail a recent contentious controversy about journalistic integrity at Gamespot, which led to the firing of Gamespot's editor. This was a big event in the world of video game journalism.
http://www.1up.com/do/blogEntry?bId=8587828&publicUserId=4561231
As David puts it, the article: 'details how Gamespot was selling editorial space to advertisers, how sections of the site were sliced up and features sold, and how Gamespot’s GameTrax service which supplies consumer behavior data is readily tainted by purchased advertising. The article goes on to recap the events that led to the firing of Gamespot Editor Jeff Gertsmann (and the ensuing controversy surrounding his firing; he wrote a negative review of Eidos' Kane & Lynch, Eidos complained to Gamespot after spending a large ad campaign on the site, and suddenly Jeff was out the door), and the subsequent (and recent) departures of two more editors, Frank Provo and Alex Navarro. It calls into question the journalistic integrity of video game reviews and demonstrates the growing power of media buyers to buy positive buzz. Scary.'

From Media Vehicles to Media Content - Contributed by Dino

Most media agencies are moving away from the traditional structure, which was designed based on media vehicles. Now teams are structured around media content (i.e. Video, Audio, etc). This means that teams will now be able to work more closely together to be able to create cross platform deals. For example NBC Universal has video outlets on the web, on network TV and on cable. By having one group focusing on video they can create campaigns and sign deals across all video outlets. Previously you would need a digital team to work with the web content and a broadcast team to work with the TV content, with no continuity.

http://adage.com/mediaworks/article?article_id=123190

LG & Netflix - contributed by Dino

Here’s a new device being developed by LG in partnership with Netflix which promises to stream HD quality movies straight to your TV.

http://blog.wired.com/business/2008/01/netflix-partner.html

Something to think about, if the writer’s get the royalties they’re looking for from DVD and digital distribution content, will that mean the studios will upcharge companies like Netflix and Apple to distribute their content. And if so how will that affect your Netflix monthly fee?

Casual Gaming and Social Networking - Fission or Fusion?

This article explores the new and potentially potent mix of Social Networking and Casual Gaming. Thousands have moved into the breach created by Facebook for developers to create online games:
http://www.nytimes.com/2008/01/15/technology/15facebook.html?_r=2&oref=slogin&oref=slogin

This could be a major future avenue for casual gaming, which could easily become an extremely powerful advertising tool. Potentially advertisers will know very precise details of audiences who play casual games on social networks, which should make the advertising space there very lucrative.

Thank you to Michael for donating this article.

TV ad spending - versus Online

As our own research has shown, the writers strike may accelerate changes in media consumption and behaviour. These changes were already occurring. In the UK it is now anticipated that ad spending on the Internet will exceed that on TV by 2009. http://www.emarketer.com/Article.aspx?id=1005797&src=article1_newsltr
Granted, British TV is downright atrocious - uncompetitive and dominated by endless reams of reality TV. This situation is made even worse by British weather that begs for diversions from reality. So perhaps it is not surprising that Britain will be the first major economy to see this shift, but it is a shift that should occur everywhere sooner or later. The writers strike will probably accelerate it in the US.

Is Market Research a Crystal Ball or an Alchemist's Delusion?

Ever wonder if our research really helps companies make the right decision? A recent real world experiment of sorts played out in New Hampshire when every pollster predicted a thumping Obama-rama victory only to be surprised when Hillary won. What went wrong? http://www.emarketer.com/Article.aspx?id=1005816&src=article1_newsltr

Jeffrey Grau has an interesting idea that people don't completely know themselves, or prefer to put out one public impression while actually having another.

Video Game Advertising - Trends in 2007

This article looks at the various trends that emerged in video game advertising in 2007. In-game advertising took off. Advertising in casual gaming is becoming the new business model for casual gaming. And companies' advertising budgets for video games greatly increased. We have been and continue to be well positioned to profit from these trends:
http://www.gamedaily.com/articles/features/ad-watch-2007-year-in-review/71320/?biz=1

Format War - Decisive Blu-Ray Victory?

The To's and Fro's of Blu-Ray versus HD DVD
We all know the news that Warner has plumped for Blu-Ray, meaning that a seemingly decisive and substantial majority of Studios support only Blu-Ray. Media analysts agree that Blu-Ray has won:
http://www.gamedaily.com/articles/news/toshiba-disappointed-hd-dvd-to-die-a-quick-death/18986/?biz=1
New Line and HBO have also moved to support Blu-Ray (as subsidiaries of Warner it is hardly surprising):
http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=11853
Universal and Paramount still back HD DVD, but for how much longer? There are already reports of retailers pressuring them to go Blu-Ray:
http://www.gamedaily.com/articles/news/report-paramount-universal-pressured-by-retail-to-go-blu/19031/?biz=1 (donated by Grant)
Universal and Paramount deny that they will switch teams:
http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=11870
But the very next day Universal announces that it will in fact support Blu-Ray as well:
http://www.gamedaily.com/articles/news/report-universal-no-longer-backing-hd-dvd-exclusively/19054/?biz=1
This leaves Paramount as the only major studio to exclusively support HD DVD. Why does it continue its stance? No doubt it would support Blu-Ray if it could, but perhaps it wont be so easy for it to get out of its contract with Toshiba. You may recall that Paramount took a $150 million pay off from Toshiba to exclusively support HD DVD. This may prove to be a rather expensive $150 million if an escape clause cannot be found, which would suggest pretty poor management at Paramount.

Digital Delivery Escape Clause by the end of the year?
Indeed Paramount may be looking for a complete escape clause from Blu-Ray or HD DVD, as they plan to put their library online:
http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=11869
Similarly Comcast is very bullish on their ability to deliver HD movies online, with new breakthroughs in technology that allow HD movies to be delivered over the Internet in 4 minutes:
http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=11848
Frankly this sounds a little too good to be already true, but they anticipate rolling this out by the end of the year.

Toshiba's New Strategy?
Toshiba's has yet to surrender on HD DVD. At first defeat looked like it would be announced any day. Even Microsoft said it would consider putting Blu-Ray on the Xbox 360:
http://www.gamedaily.com/articles/news/microsoft-would-consider-bluray-for-xbox/19022/?biz=1
Then Microsoft vehemently denied this:
http://www.gamedaily.com/articles/news/now-microsoft-is-inoti-considering-bluray/19045/?biz=1
And now Toshiba has changed its HD DVD sales strategy. Rather than continue to compete with Blu-Ray head to head, it has lowered the price of HD DVD players in order to compete with upconverting DVD players. Thus you can get an HD DVD player that upconverts regular DVDs as well as has the ability to play an HD DVD for little more than a regular upconverting DVD player costs:
http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=11877

Video Games - Latest Trends

Leading Next-Generation Console?

Xbox chief, Don Mattrick, argues that the Xbox 360 will become established as the leading new generation console in 2008.
http://www.gamedaily.com/articles/news/ces-don-mattrick-says-xbox-360-will-lead-in-2008/18994/?biz=1

Yet two recent developments point against the Xbox 360 retaining its lead in the new generation consoles. The most important is that Blu-Ray has probably won the format war now that Warner has plumped for it. This will make the PS3 a lot more attractive to buy and should swing considerable momentum its way. The second development is that the Wii has been gaining tremendously in popularity. Indeed the GaMeasure data shows that the Xbox 360 has not experienced much change in ownership nor preference over the last quarters, whereas both the PS3 and the Wii are quickly gaining ground. Even if the Wii and the PS3 still trail behind, it’s hard to believe that the Xbox 360 will become decisively established as the leading new-gen console in 2008.

Blu-Ray and PS3 now an unstoppable combination?

The PS3 sold extremely well over the holiday season:
http://www.gamedaily.com/articles/news/ps3-sells-12-million-in-north-america-during-holiday/18988/?biz=1

A number of analysts believe that it will do even better in 2008 now that Blu-Ray has won the format war (see related blog entry):

http://www.gamedaily.com/articles/news/bluray-to-unlock-true-value-of-ps3-accelerate-sales-price-cut-by-yearend/19030/?biz=1

One impediment is continuing high HD TV prices, especially for the 1080p (I plumped for a 1080i as the 1080p was more than double the price). And prices should come down somewhat, this article projects HD TVs will drop by 15% in price this year:
http://www.homemediamagazine.com/index.cfm?sec_id=2&newsid=11891

What about the Wii?

The Wii continues to sell extraordinarily well. It is also a bit different, and is fast becoming an exercise machine in Japan. Wii Sports and Wii Fit are top selling games there (Wii Fit hasn't been released in North America yet). Are gamers set to get fit? http://www.gamedaily.com/articles/news/wii-fit-sells-over-a-million-in-japan/19024/?biz=1
More seriously, is the Wii a sustainable next-gen console, or will it need to ramp up to a Wii 2 to continue competing with the Xbox 360 and PS3?:
http://www.gamedaily.com/articles/news/codemasters-ceo-doubts-wii-sustainability-envisions-wii-2/19021/?biz=1
Well Nintendo isn't saying anything of the sort. In fact Nintendo is releasing a ton of new games for the Wii which should make it even more popular. This article contains a list of these games and their release dates:
http://www.gamedaily.com/articles/news/nintendo-were-going-broad-and-bold-in-2008/19100/?biz=1

Writers Strike - goes on and on, but some better news this week

The likelihood of the worst case scenario playing out, i.e. that the Writers Strike continues well into the year, was reduced this week when the Directors guild reached an early agreement with the studios. Previously it was thought that the Directors guild would not reach a new deal until June. Now that the Directors and the Studios are in agreement, no pending outside agreements stand in the way of the Writers and the Studios reaching an agreement.
The TV networks apparently still have plenty of unseen content to put out, but not much of it is prime-time:
http://news.yahoo.com/s/ap/20080116/ap_en_tv/tv_strike_season