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