Subscribe to Advertising & Marketing Review!|
Contact Ken Custer at 303-277-9840.
This Video Revolution May Leave Advertisers Behind
by Glen Emerson Morris
Copyright © 1994 - 2010 by Glen Emerson Morris
All Rights Reserved
keywords: Internet advertising, Internet marketing, business, advertising, Internet, marketing.
For more advertising and marketing help, news, resources and information visit our Home Page.
Apples introduction of a video playing IPod and video downloading
service are actually two very separate developments from an advertisers
point of view. The video iPod will offer a number of benefits for
advertisers. The video downloading service could be a real problem.
The negative effects of the video iPod will begin to appear almost
immediately. Apples video sales business couldnt come at worse time
for the television networks, or network advertisers. Audience ratings
are at an all time low, and to make things worse, both networks and
local stations have adopted the use of ever increasingly intrusive and
expansive video promos overlaid on top of programs. Rather than watching
a program only partly visible behind overlays, many consumers will opt
to pay a couple of dollars to watch the show in its unobscured entirety
the day after it runs.
So far only ABC and Disney have made any video content available through
Apples iTunes store, but its likely other content providers will soon.
Theres a compelling argument for them to do so. Instead of waiting
until the end of the season to sell the complete season on DVD to
consumers, they can start making money the day after the first nights
run. Theres no waiting time for mastering, artwork, mass duplication
and packaging. In addition, the $1.99 per episode price Apple has set
allows for a very healthy profit margin, with no risk of unsold
inventory or returns.
It is important to remember that the success of Apples video
downloading service is not limited to the number of people who own video
iPods. An iPod isnt required to buy or view video downloads from Apple.
Millions of songs and podcasts have been downloaded from iTunes by
people without iPods. Anyone who owns a reasonably current Mac or
Windows computer with an Internet connection can download Apples iTunes
software and have immediate access to songs, podcasts and videos.
Viewing isnt limited to the computer either. Many computers, including
the Apple iMac, have an S-video output jack to connect directly to TVs.
Its possible that within a year Apple could divert between five to ten
percent of prime time viewing audiences. If prices for downloads drop,
which is likely once competition starts, the percentage could be
There wont be much advertisers can do to stop this audience erosion.
One option is to try to cut a deal with Apple and its content suppliers
to include commercials in the downloads in exchange for covering part of
the cost to consumers, like reducing the cost from $1.99 a download to
$1.49 or less. Another option would be to demand networks stop the
practice of degrading programs with overlays. This approach would be
free, easy to implement and welcomed enough by television audiences that
it might slow down audience erosion.
Fortunately, there are many ways that advertisers could use video
iPods to offset audience losses elsewhere. The podcast world is already
seeing educational podcasts being released by companies like IBM and
Cisco. Cisco has several podcasts on their Website that explain computer
networks and the hardware needed to support them. Drawing on the
companys experts, the Cisco podcasts are genuinely educational and not
just 20 minute infomercials for their products. Many companies could
follow this model. Other approaches would work, too.
For instance, a car parts manufacturer like Delphi, should it survive,
could produce videos that demonstrate how to install the car parts they
sell. A home mechanic, or professional one for that matter, would be
able to watch a video showing step by step exactly what to do while they
were making the repair. Previously, it hasnt been practical to have a
computer video playback system in a garage. Its practical to have an
Apple iPod nearly anywhere. From a marketing perspective, a product that
comes with a video that explains how to install or use it is probably
more likely to sell than a comparable product marketed without it. How
much more likely would depend on how complex the installation or use of
the product is, but for many products, it could be significant.
Hardware stores could use a variation of this, too, by offering their
customers videos to help them install and repair home improvements. By
offering to load the videos on to a customers iPod in the store at the
time of purchase, hardware stores could offer the convenience of
providing a much higher bandwidth, and shorter loading time, than a
customer could get at home through an Internet connection.
Even more opportunities could be present in the future. It has been
estimated that by 2009 sales of MP3 players will reach one billion units
per year. Most will be wireless and have video screens, and they will be
at least as common as cell phones are today. In a world where the
average person is expected to have video player with them, some very
common marketing devices could take on new dimensions.
For instance, video players could change how products are presented to
consumers at exhibitions like car and boat shows. At car shows, booths
frequently have a single video display playing a promo about several
models and features in a linear format that may take 5-10 minutes to
complete. In the world of the future, each booth would broadcast menus
that let consumers see exactly what videos on exactly what models they
wanted information about, and without waiting 5 minutes or more to get
to the part of a video they were really interested in. This approach
would also make car shows a lot more peaceful. Instead of dozens of
exhibitors blaring audio trying to drown each other out, everyone one
would be listening with headphones in an atmosphere of peace and quiet
(much like many museums do now with rental headphone systems).
Its too early to say whether Apples video iPod system will be a
success, but their system to sell video programming directly to
consumers will probably be one of the most far reaching innovations they
ever came up with. Advertisers need to start planning to counter its
effects now. At the rate Apples going, next year may be too late.
Glen Emerson Morris has worked as a technology consultant for Network Associates, Yahoo!, Ariba, WebMD, Inktomi, Adobe, Apple and Radius, and is the developer of the Advertising & Marketing Review Data CD.
Back to top