MaxxoMedia Digital Media and Entertainment Trends

Google is getting ready for a re-entry into video advertising. It’s taking its first steps by joining hands with some of the biggest names in the video industry. Google AdSense ads can now display music clips from Warner Music Group and Sony BMG Music Entertainment.

During the next four weeks, Google will allow users to use AdSense in their websites and choose from a selected playlist of songs to play in their web site. These music videos will be accompanied with advertising.

Nielsen Analytics and Scarborough Research released a report stating that U.S. consumers who watch network TV shows on the Internet are younger, better educated, more tech-savvy and more affluent than the general population, making them a lucrative target for advertisers.

Dispelling fears that offering streaming TV episodes would cut into broadcast viewership and advertising revenues, “video on PCs and iPods actually is expanding the audience of traditional TV programs, supported by the fact that total TV usage was at a record high in U.S. households at 8 hours, 14 minutes a day during the 2005-2006 TV season,” the report said.

Among U.S. households with a broadband connection, 34% were in the 18-34 demographic, and 45% are 35-54. Members of these households are four times as likely to be college educated, and 28% have incomes of $100,000 or more.

These factors lead the report to conclude that Internet TV can create new revenue models for content owners.

Digital media is changing the way students access classroom information in South Carolina’s Cherokee County School District. The district will soon support distance learning courses at two High Schools using a new media encoding system that captures and encodes broadcasts of the courses, which are then made available to students unable to attend those classes in person.

Using products from a company called Viewcast, the school district is now able to encode live streams and save them to local storage at Gaffney High. Students can access and view encoded files at their convenience and, in the future, will have the option of borrowing a mobile device, such as an iPod, and watching the selected class at home.

“You know when I was your age I had to get up off the couch and turn a knob on the TV to change the channels!” I say to my son of 11 years. “Awww come on dad – stop making up stories,” he replies. “No really, and we only had three channels that came in halfway decent – don’t get me started about the ‘rabbit ears.’ I know it sounds crazy, but we had to wait for our favorite shows to come on at the time shown in the TV Guide magazine.” “The what?” he says with a quizzical look on his face. “If we wanted to listen to music we had to put a record on the record player or wait for it to come on the radio. Phone calls meant waiting for the single house line or calling from a payphone.” More quizzical looks. “Our video games were one dimensional and we only had one button to press to kill the aliens. And if we wanted to take a picture we had to take the roll of film to be developed, make prints and mail them to our friends and family.”

Back in April of 2000, a federal judge ruled that MP3.com had violated copyright law with the creation of its my.mp3.com service, which allowed users to stream music from a database of music the company stored on its servers. Before damages had been set in the case, the company settled its dispute with three of the major labels for reportedly over $60 million dollars then agreed to be acquired by a division of Vivendi Universal in May of 2001 for $350 million dollars.

Steven Colbert explains the twists, turns and returns for ATT over the past 35 years.

• Venture financings in digital media totaled $4.4 billion in 2006, as compared to $2.6 billion in 2005. The 2006 growth rate of 66 percent far exceeds the growth rates for the overall venture industry. Notably, though, the growth in venture financings for digital media has moderated over the past six months.
• The curbed growth of investment activity is consistent with Rutberg’s conversations with venture capital investors. On an anecdotal basis, they believe that investor sentiment is becoming more rational rather than exuberant, as was seen in the beginning of the year.
• The percentage of transactions with a financing size of $20 million or greater has increased, from 6 percent in 1H05 to 13 percent in 2H06. These larger transactions are driven, in Rutberg’s view, by activity in the capital-intensive Semiconductors sector and in the late-stage Advertising Infrastructure sector.
• The sector with the greatest increase in 2006 was Provisioning & Delivery Infrastructure, driven by both an individual $130 million financing by Limelight Networks and the overall investment growth in the CDN and Internet-delivered video infrastructure subsectors. Strong increases were also experienced in the Advertising Infrastructure and Applications sectors.
• The most active digital media venture capital investors during 2006 included: Intel Capital, Sequoia Capital, Draper Fisher Jurvetson, Benchmark Capital, Menlo Ventures, and Oak Investment Partners.

For More Details…

IFPI has released a report on the state of Digital Music in 2006. Digital sales now account for around 10% of the music market as record companies experiment and innovate with an array of business models and digital music products, involving hundreds of licensing partners. Get the whole report – Download Key Facts

• Digital music sales estimated to double to around US$2 billion in 2006
• Single track downloads estimated up 89% at 795 million
• Available tracks double to four million, via 500 online services in over 40 countries worldwide
• Portable music players help drive digital music consumption
• New revenue streams and business models emerge
• Lawsuits impact illegal file-sharing, but “gatekeeper” ISPs must act to curb digital piracy