Verizon Completes It’s Web 1.0 Roll-up, But May Not Stop There

With its $4.8 billion acquisition of Yahoo this week, coming a year and two months after its $4.4 billion acquisition of AOL, Verizon now owns the two dominant players in the web ecosystem — circa 1999. But at least it got them cheap.

Yahoo once had a market cap of $125 billion; AOL’s reached $224 billion in the immediate wake of its January 2000 acquisition of Time Warner — roughly the same as Verizon’s market cap today. So, scooping up both for less  $10 billion could be considered a steal.

YAHOO_headquartersThe question is, why bother? Neither AOL nor Yahoo is exactly dominant in its market today. In Yahoo’s case, it isn’t even clear what that market is. Even in announcing the sale to employees, Yahoo CEO Marissa Mayer could barely articulate a coherent description of what it is Verizon was buying, let alone why.

At best, Verizon is getting, in AOL and Yahoo, a disconnected assortment of online media properties and a pair of online advertising businesses built around display, rather than search, social, or mobile — the dominant modes of digital advertising today. While Verizon’s distribution reach in mobile may be able to breathe some new life into some of those media assets it has a long, long way to go before it could seriously challenge Facebook and Google, the dominant players it today’s digital media distribution and advertising ecosystem, if that’s really its goal. Read More »

How Twitter Beat Out Rivals For NFL Deal

Twitter this week landed streaming rights to a 10-game package of Thursday Night Football games next season for a surprisingly modest $10 million, edging out rival bids from Verizon, Amazon and Yahoo, at least one of which reportedly came in 50 percent higher than Twitter’s offer. Another rival, Facebook, reportedly dropped out of the bidding last week over objections to the advertising framework imposed on the deal by the NFL.

Twitter, in fact, will get minimal advertising rights as part of the deal. As a technical matter, it will be rebroadcasting the CBS and NBC feeds of the nfl_gamegames, which the networks will also be streaming over their own, authenticated TV Everywhere platforms as part of their $450 million deal to broadcast the games, and the networks will be handling the bulk of the ad sales for both broadcast and digital channels. Twitter will get a little bit of inventory around the margins to sell, plus some pre-game, player-created spots on Periscope. The deal is basically a $10 million brand-building exercise for micro-blogging and live streaming platform.

The games, in fact, will be available for free, without authentication, both on Twitter’s own platform and across its entire, syndicated global footprint.

That last point was obviously critical for the NFL, which has been working feverishly to expand its audience outside the U.S. and sees streaming as a way to reach potential fans in territories where broadcast rights would be a tough sell. Read More »

The Bills, Jaguars And Peak-NFL

Given how little good news Yahoo has had to share with investors lately it’s no surprise that the company is trumpeting the results of Sunday’s first-ever globally live-streamed regular season NFL game, between the Buffalo Bills and Jacksonville Jaguars, which attracted 15.2 million unique viewers and 33.6 million total views. Those numbers make it one of the biggest live-streamed events to date, and compare favorably with the TV audience for  a typically Thursday night or Monday night regular season game, according to the NFL.

“We’re thrilled with the results of our initial step distributing an NFL game to a worldwide audience and with the work of our partner, Yahoo,” NFL senior VP of media strategy, business development and sales,Hans Schroder said in a statement. “We are incredibly excited by the fact that jaguars-billswe took a game that would have been viewed by a relatively limited television audience in the United States and by distributing it digitally were able to attract a global audience of over 15 million viewers.”

Yet as others have pointed out, the reported numbers don’t tell the whole story. Yahoo had to resort to some trick plays to score some of those points, like putting a muted auto-play video of the game on the home pages of several of its properties, which means your Aunt Minnie, who has never watched an NFL game in her life but uses Yahoo as her personal home page, is somewhere in that 15 million. The comparison with broadcast TV viewership is also overstated. As Brian Stetler of CNN pointed out, the 460 million total minutes of football Yahoo claims to have streamed, over the course of a 195-minute game, implies an average of just 2.36 million concurrent viewers, the streaming metric most comparable to TV ratings. Read More »

The Unknown Unknowns Of Buying Sports Rights

The process of deciding whether to greenlight a movie in Hollywood involves a lot of variables and input from multiple studio divisions, but the math is pretty straightforward: Each distribution unit — domestic theatrical, international, home entertainment, TV, etc. — is asked to estimate how much revenue it could deliver based on the “elements” attached to the proposed film (script, director, stars), the genre, the proposed timing of its release, competing projects at other studios, and other such factors.  Each division, in turn, has its own methodology for arriving at its estimate, based on the track records of the stars/director/etc., the performance of “comparable” recent films, and so forth.

march_madness_tbs_cbsThose projections are then weighed against the project’s proposed budget and projected marketing costs, allowances are made for non-quantifiable variables (star relationships, etc.), and a reasonably well-informed gut call gets made.

The process of approving franchise sequels is even more straightforward since many of the numbers are hard-coded before there’s even a script. The movies may still flop, due to creative failures, marketing miscalculations or shifts in the zeitgeist, but at least the people making the call know what they can’t know.

Compare that with the challenge facing TV sports rights buyers. Speaking at the Second Screen Society’s Sports Summit in New York this week, executives from two of the biggest buyers of sports rights — CBS and Turner — highlighted the growing number of unknown unknowns facing sports buyers. Read More »

Could online ad exchanges work for news, too?

Last week, Google launched its long-expected bid to conquer the online display advertising business to complement its domination of the search ad market by unveiling the new, auction-based DoubleClick Ad Exchange, built on the ad-serving company it acquired in 2007 for $3.1 billion and has spent the two years since steering through the regulatory process. The new exchange will function a bit like a stock market, allowing web site publishers to put their display inventory up for auction, and advertisers to bid on placements in near-real time, much as they do with Google AdWords today.

Tokyo-stock-exchangeThe idea isn’t new. Both Yahoo and Microsoft already operate online ad exchanges. But byopening its new display ad exchange to the hundreds of thousands (millions?) of web sites that are already part of its AdSense network for  search ads Google will bring enormous new liquidity to what has been, up to now, a pretty small market. In principle, that should lead to more efficient price discovery for advertisers and higher inventory yields for publishers.

Even so, the DoubleClick Ad Exchange has a long way to go before it can dominate the online display ad business. Most online display ads are sold either directly by publishers or through proprietary ad networks–the largest of which is run by Yahoo–which syndicate ads to web sites on behalf of marketers. Only a small percentage of online display ads are currently sold through exchanges. Read More »

Orphans in the storm

Pity Judge Denny Chin, the federal district court jurist in New York presiding over the Google Book Search case (The Authors Guild, et. al. v. Google, Inc.). Having steered the long, complex class action to within sight of the finish line he suddenly finds himself the object of an intense last-minute lobbying campaign from interests that were not party to the case and at the center of budding international incident.

google-books-imagen1In my previous post, I discussed the commercial interests that began lining up last week in support or opposition to the proposed settlement between Google and the class-action plaintiffs, including Amazon, Microsoft, Yahoo and Sony. Now, foreign nations, and perhaps whole continents, are throwing down markers.

On Tuesday, lawyers for the government of Germany filed a strongly worded brief (pdf) with the court declaring that the settlement, if approved, would “run afoul of the applicable German nationallaws,” “irrevocably alter the landscape of internationalal copyright law” and potentially violate U.S. treaty obligations.

Some European Union officials, meanwhile, have come out in favor of the settlement’s terms (if not its legal implications) and have suggested importing it to Europe. A meeting on the issue is scheduled for Sept. 14 in Brussels.

How did it come to this? Read More »