New Industry Trends

Of all the new trends that I see developing, the most significant is probably the new wave of mobile media.  The most effective way to communicate is through video and the technology continues to reflect the new consumer mind state of on demand programming.  When TV recording capabilities were first introduced, it changed the landscape of media and entertainment.  

Not long after that revolutionary breakthrough, we are beginning to see the first signs of an on-demand world on mobile devices.  With the mobile device screen sizes getting larger and the Networks getting faster, the sky is the limit.  There are already programs that all ow you to watch a live television program on a mobile device.  As the cellular infrastructure continues to improve, we will see better resolution and faster connection speeds.

While in the Entertainment Business Masters program at Full-Sail, I have learned a great deal about the many ways that the Entertainment industry can be impacted by breakthroughs in technology.  

I plan on using my new expertise, to exploit the mobile advertising wave that is on the horizon.  The small screen size was a major issue for mobile advertiser in the past but the new wave of tablets have eliminated many of the restrictions that prevented mobile advertising from being a viable option for many companies.  Having gained the knowledge of digital advertising and marketing principles can now advise companies and develop strategies for successful mobile marketing campaigns. 

Funding Sources

This week I looked at the web sites of a couple companies that serve as sources of funding for small businesses.

The first of which is a company called the Opportunity Finance Network.  The aim of the company is to offer affordable and responsible financial products to low-income, low-wealth and disadvantaged people and businesses.  The products that they offer help capital flow to opportunity markets outside of the economic mainstream.

The OFN requires qualified companies to fill out a detailed application along with  a host of supporting documents ranging from a mission statement to balance sheets to resumes of management.  

The site also serves a knowledge resource offering its members a wealth of information on the industry.

The other site that I looked into was The Association for Enterprise Opportunity.  The AEO markets itself as a company for micro-enterprise in America.  They help underserved, small business entrepreneurs contribute to their communities through business ownership.

The criteria for this program is not quite as narrow at the OFN.  However, their aim of helping entrepreneurs and improving low income communities is similar in nature.  They also help entrepreneurs find development organizations to assist in their business endeavors. 

Business Plan Essentials

In week one I researched the most important elements of the business plan based on the opinions of the top venture capital experts. I have taken the advice of these experts and have made several key changes to my business plan.

The first change that I made was to change my business plan to target a wider audience. Instead of simply targeting music consumers, I plan to take a broader approach. The line of products that my company offers now represents a lifestyle for the consumer. We plan to offer a full line of merchandise to complement the music and complete the lifestyle. The offering of these additional items will make it easier for the fans to embrace and identify with the brand as a whole.

Brad Feld’s advice on the executive summary really caught my attention. According to Brad, he ‘doesn’t read business plans, the executive summary is enough…’ This tells me that a potential investor will not even read past the executive summary if it doesn’t do a good enough job of piquing the interest of the reader. Also, the executive summary is the place where you describe the team of individuals involved with the business venture. If the people involved don’t have the right background and qualifications, the venture will more than likely fail. I have not only paid close attention to this section of my business plan, I have also taken extra measures to ensure that I have the right pieces in my corporate structure.

Overall, I wanted to be sure that the business model, the team involved and the financial analysis all address the consumer problem and offer a profitable solution to the problem. I will continue to seek the advice of these and other expert investors while I continue to revise and improve my business plan.

Successful Venture Capitalists and their Views on Business Plan Essentials

Don Valentine

Don Valentine is a venture capitalist with a heavy influence in the technology industry in the United States. Don has a B.A. from Fordham University and is credited with the foundry of National and Fairchild semiconductor companies. In 1972 he founded Sequoia Capital, a venture capital investment firm in California’s Silicon Valley. He was one of the original investors in companies like Apple, Atari, Logic, Oracle, Cisco, Electronic Arts, Google, YouTube and many others. The firm is widely regarded as one of the top firms in the Silicon valley and according to an article posted on washingtonpost.com, 19% of the NASDAQ’s value is made up of firms Sequoia Capital has funded.

Don Valentine and Sequoia Capital seek business plans that target large markets and rich customers. According to sequoiacap.com a good business plan should give as much information with as few words as possible. The plan should explicitly describe a consumer problem and offer an effective and profitable solution. The plan should also give details on the business model, the team involved and a solid financial analysis.

Brad Feld

Brad Feld is the co-founder of Foundry Group. Brad has Bachelor of Science and Master of Science degrees in Management Science from the Massachusetts Institute of Technology. He has been an early-stage investor and entrepreneur for over 20 years. He is also active with several non-profit companies and is the current chairman of the National Center for Women & Information Technology.

In a blog entry on his web sire feld.com, Brad underscores the importance of the executive summary by saying, “While I don’t read business plans anymore (executive summaries are enough for me), I believe the business plan is a critical document for an entrepreneur to organize his thoughts around his new business.” In an interesting entry that details one of his earliest business plans he reveals that while the plan was a bit simplistic and naïve, it framed the business very effectively.

The Future of Online Advertising Spending

As the Internet revolution continues to take the world by storm, the advertising industry continues to change as a result.  Market analysts predict that spending on online advertising in the US will reach $50 billion by the year 2015. 

Display:

Online ad spending grew 20 percent last year thanks to a sharp increase in display advertising.  According to a recent article on paidcontent.org, display advertising is the fastest growing segment of the Internet ad market showing 16.4 percent growth last year.  Paid search advertising is also growing rapidly at an average of 14.4 percent per year.

Video:

Videos in general are having a profound impact on the shape of the Internet. According to another recent article found on mashable.com, spending on video ads reached $1.42 billion last year.  David Hallerman (eMarketer’s principal analyst) attributes this growth to the fact that, “video generates greater audience attention than any of the other digital ad formats.”  As the world’s networks continue to expand and connection speeds improve, we will continue to see and increase in video advertising.

Mobile:

Another segment of the Internet market that is rapidly growing and driving the growth of online marketing is the mobile market.  The proliferation of smart phones and tablets is changing the world, as we know it.  JP Morgan analyst Doug Anmuth said in a paidcontent.org article that mobile will be the single biggest factor accelerating web growth in the coming years.  The mobile ad market is expected to double this year and is on pace to top $1.2 billion.

In the past, the small amount real estate on phone screens and mobile connection speeds presented obstacles and limited the capabilities of advertisers.  However, in the future, we can look forward to faster mobile data delivery from next-generation networks that will increase connection speeds ten times over by the year 2015.  The online advertising industry will also benefit from the growing popularity of smart phone and tablet devices.  The increase in screen size and functionality of these new devices ultimately means infinitely more possibilities for advertisers.

The Digital Landscape for Advertisers

While television still dominates as the most effective mass-market format, the digital landscape for advertisers is growing very rapidly.   According to Kantar Media intelligence, the digital media’s share of the world ad market has more than doubled since 2006.  In 2006, digital media represented just 8 percent of the market. In seemingly no time, digital media advertising now represents over 17% of the total world advertising market.

One of the main problems with the Internet and the mindset of on-demand programming is that the viewer/potential consumer is trained to skip over annoying ads.  This is why a lot of banner and pop-up style advertisements have become nearly obsolete.  The target audience must be engaged in a manner that is conducive to the message being welcomed by the consumers.  The Internet’s explosive growth has led to a demand for creative advertising on the Web.  Advertisements must fully exploit the strengths of the Internet medium and extend the audience engagement in ways that TV can’t.

The new target audience is beginning to go to the Internet for on demand programming.  As companies like Netflix and YouTube continue to grow, they continue to captivate massive audiences while advertisements are creatively woven through the content featured on these sites.   Whether it’s a music video or an interactive game, corporations of all shapes and sizes are competing to make meaningful impressions on new consumers.  After all, advertising is any time a sponsor pays to deliver a message through a medium.  The possibilities for branding and activation are endless.        

The following is a link to an interesting article that addresses the future of digital media:

http://whyy.org/cms/radiotimes/2011/03/07/mergers-in-the-news-media-landscape/

 

Legal issues behind the NBA lockout

The current CBA (Collective Bargaining Agreement) between the owners and the players
of the NBA is set to expire on June 30, 2011. Just like football, if a resolution is not reached during this off season the next season will be at risk of being shortened or canceled. We have all seen how the NFL lockout has played out when the negotiations broke down and the litigation begun. It has been a very messy situation and the parties involved with the NBA will avoid following in those footsteps if they know what’s good for them.


There are several issues that have led to the current dispute between the NBA players and the owners. The most significant issue has been that many NBA owners claim they are in the red and that the league as a whole is losing money. Owners want to increase their portion of basketball related income. The players currently get 57% and the owners get 43%. The implementation of a hard salary cap as opposed to the current soft salary cap is also a big issue. The owners are also looking to cut player salaries by about one third and shorten the length of contracts while eliminating exceptions like signing bonuses or deferred compensation. NBA Commissioner, David Stern, has recently proposed a “flex cap” which would allow richer teams to exceed the target of $62 million per team but this proposal has been opposed by the players and legal analysts have been skeptical that anything other that a hard salary cap would be effective.


Hopefully the two sides can agree soon because 2 major professional sports lockouts in one year could have a devastating impact on an already struggling economy.

Image Sources:
 http://www.thesportsbank.net/nba/nba-lockout-in-2011-heres-your-league-labor-issue-synopsis/
http://theoptionquarterback.wordpress.com/2011/06/15/nba-a-lockout-is-needed/ 

The Pac-12 New Media Rights Deal

The Pac-10 conference is now the Pac-12 and they have just signed a 12-year media rights deal with ESPN and FOX. The deal will reportedly net the conference around $3 billion with $21 million a year going to each program. The two networks will share game coverage and take turns broadcasting the conference championship game.

The Pac-12 conference also announced the establishment of a new company called Pac-12 Media Enterprises and a new Pac-12 Network dedicated to the distribution of content on all platforms and devices. This landmark deal is the largest ever in collegiate athletics. The deal marks the first time that the Pac-12’s institutions would share equally in the revenues generated by the new deal.

The following articles and videos give further details on the deal:





http://www.cubuffs.com/ViewArticle.dbml?DB_LANG=ES_ES&DB_OEM_ID=600&atclid=205146778

http://sports.espn.go.com/ncf/news/story?id=6471380

Cracking Down on Dirty Agents

There has been a long time debate on whether or not athletes at the college level should be financially compensated for their participation in sports. These sports generate millions for the schools that they play for. Many think that the athletes should be compensated because they are essentially the lifeblood of the sports that they play and millions are made off of their talent and hard work. Others feel that a free education is enough. The current NCAA rule prohibits players from receiving any “extra benefits” but whenever there is a scandal it seems as if the players suffer the majority of the consequences. Where is the justice for the other parties involved? If a coach is involved, he may be fired or fined but we have seen start over with another program.

According to the following articles, a new legislation will soon change all that. The newly passed Texas legislation is cracking down on dirty sports agents with punishments of jail time. Check em out.


http://sports.espn.go.com/ncaa/news/story?id=6558943&campaign=rss&source=ESPNHeadlines

http://www.washingtonpost.com/sports/texas-lawmakers-approve-crackdown-on-unethical-sports-agents/2011/05/18/AFSnik6G_story.html

Sports Contract Disputes

Joe Flacco contract controversy.

Joe Flacco is coming off a career year in which he became the Baltimore Ravens’ all-time leading passer but the Season ended on a bad note (see video) and the Baltimore Ravens have publicly stated that Flacco will not receive a contract extension this year.

 

Flacco was the Raven’s 1st round draft pick in 2008 and is still has two years remaining on his rookie contract. He has surpassed all of the expectations and truly out performed his contract. However, Flacco remains frustrated that talks on a new contract have not begun; mainly because the NFL lockout has had prohibited contact between the teams and their players during this offseason. Flacco became even more disgruntled when Quarterback coach Jim Zorn was fired earlier this year. "I'm kind of taking it personal," Flacco said. "You're saying that you're not happy with the position. I'm not sure if there is any truth to that, but that's the vibe you're sending to your quarterback. I feel like I'm being attacked."

But it only gets worse for Flacco who is thought to be worried that his new deal is not even a priority for the team. The Ravens recently selected QB Tyrod Taylor in the NFL draft and it is expected that when the lockout ends the Ravens will be scrambling to re-sign players with less than two years left on their contracts. Also, All-Pro defensive tackle Haloti Ngata is due a contract extension before Flacco and is considered by many to be a higher priority. I’d love to see how this one plays out.

http://articles.baltimoresun.com/2011-04-26/sports/bal-sportsblitz-ravens-flacco0426_1_joe-flacco-ravens-quarterback-nfl-lockout


Albert Pujols Contract Negotiation.


It has been reported that Albert Pujols is seeking a 10-year, $300 million contract extension. This would be the largest contract in MLB history. Yes, even larger that the infamous 10-year, $275 million contract that Alex Rodriguez received in 2008. Albert still has one year left on his current contract. However, after this season he is set to become a free agent. Albert has been adamant about not negotiating during the season so as not to be a distraction to the team. And now that the new season is under way all signs indicate that the negotiations between Pujols and the Cardinals have indeed ceased. The Cardinals are still considered the front runner to re-sign Pujols since the Yankees and the Red Sox will not be participating in the Albert Pujols sweepstakes, But only time will tell…


Sources:


http://sports.espn.go.com/mlb/hotstove10/columns/story?columnist=stark_jayson&id=6056760


http://sportsillustrated.cnn.com/2011/writers/jon_heyman/05/04/albert.pujols/

Trademark Controversy in Sports

For years the Spanish speaking community has been pronouncing the Los Angeles baseball team The Dodgers as “Los Doyers.” The mispronunciation turned nickname has gained massive popularity and found its way on to many hats, bandannas and t-shirts in the Los Angeles area.

Products carrying the Los Doyers emblem have been sold exclusively by local street venders and merchandisers until, in August of 2010, the Los Angeles Dodgers, LLC filed two applications for trademark of the mark Los Doyers. The Dodgers subsequently began sending out cease and desist letters to retailers of the merchandise who had been enjoying healthy profits form the sale of Los Doyers merchandise.

View more videos at: http://nbclosangeles.com.

Another similar situation resulted from the rise in popularity of the New Orleans Saints. When the Saints won the NFL’s Super Bowl in 2010, the phrase became even more popular and a controversy arose over who had the rights to ‘Who Dat’.

The phrase came from a chant – “Who dat say they gon beat the Saints” – and has been a mainstay at the Superdome since the 1980’s. Two brothers and longtime Saints fans claim they own the only federal trademark of the phrase and are also the owners of WhoDat Inc. Many credit the 1983 song titled Who Dat with creation of the popular name but its use has been traced back to the minstrel shows of the 1930's.

Despite the fan backlash and the unknown origins of the phrase, the NFL has implemented an aggressive cease and desist campaign claiming they own the rights to the trademark.




Related Blog posts:

LAList
http://laist.com/2010/09/09/dodgers_make_a_play_for_los_doyers.php

LA times blog:
http://latimesblogs.latimes.com/dodgers/2010/09/there-may-be-money-to-be-made-on-los-doyers-but-theyre-still-a-mediocre-team.html

NFLPA Social Media Analysis

NFLPA Social Media Analysis from SNF Entertainment on Vimeo.

Biggest Sports Stories

Two of the biggest stories of the past decade in sports were baseballs performance enhancing drug scandal and Adidas’ buying of Reebok for $3.8 billion. The drug scandal has dominated headlines while the big Reebok deal may have slipped past some consumers. However, both have had a profound impact on sports and the businesses behind them.

According to a 2005 ESPN Article, 52% of fans still believe that Barry Bonds should still deserved to be in the Hall of Fame. The Scandal continues to grab headlines as Barry Bonds’ perjury trial is currently taking place. As mentioned in the above CNBC video, while the game’s biggest names were involved in the scandal and the MLB received a black eye but business continued to thrive.

Unlike the MLB’s scandal, the Reebok/Adidas deal has turned out to be very bad for business. The deal was originally intended to increase the market share of Adidas and better challenge the industry’s biggest competitor. Initially, US shares of the company stock rose 30 percent upon the announcement of the deal. However, since then the deal has been a disaster. According to the CNBC article, both of the brands were made weaker. Before the deal Adidas and Reebok had 10 and 8 percent market share respectively. Since the deal their Adidas market share has dwindled to 6 percent and Reebok’s share is down to about 2 percent.

The situation for Reebok continues to worsen as reports surface that Reebok may lose its contract with the NFL (National Football League). The NFL is rumored to be negotiating a deal with Nike for the 2012 season that may leave Reebok out in the cold. A 2010 Bloomberg article quoted Citigroup analyst Kate McShane who stated in investor notes that, “Reebok’s NFL contract represents about $350 million of its $565 million in U.S. apparel revenues.” Needless to say, this would further devastate the business and slash revenues.

Sports are big business and they are only getting bigger. The behind the scenes business deals of sports will surely continue to affect the sports industry for better or worse.

The BET panel at SXSW

I had the pleasure of visiting Austin, TX for the 25^th anniversary celebration of the SXSW conference.  While at the conference, I was able to attend several very informative panels.   

On Thursday March 17, I attended the BET sponsored “Baby Im A Star!” The panel featured several industry leaders including Stephen Hill (President of Music programming at BET), Troy Carter (Lady Gaga’s manager), L. Londell McMillan (Prominent entertainment lawyer and publisher of The Source Magazine) and artists Melanie Fiona and J. Cole.  The panel, moderated by Kelly Griffin (BET Networks), was an interactive discussion of how to get major exposure in a multi-platform music environment. 

After the panel I was able to talk to a couple of the panelists about negotiating in the current music industry climate.  Here’s what they had to say:

On the topic of affiliation, McMillan says Relationships matter.  In order to negotiate a position as a star, you must understand the value of relationships.  The prevalence of search engine tools on the Internet means that the cream doesn’t always rise to the top.  Forming key relationships will ensure that the product is reaching the target audience.

 

When asked about her role in the industry Melanie Fiona explained that she has had to deal with stereotypes and issues concerning her image in the industry.  She was often prompted to use her sexuality to enhance her career but she remained true to herself.  She cited Sade as an example of being sexy without being sexually overt.  This is also closely related to the issue of autonomy.  She had to negotiate a position where her thoughts and ideas were respected.  This is why she was able to make her own decisions with regard to her image and her career.

 Troy Carter had some interesting things to say about leverage.  He explained that he doesn’t listen to anything and by the time someone surfaces on his radar, they have gained the approval of many fans and industry executives.  Artists are far better off perfecting their crafts and developing their talents to the point where they are ready to be presented to the public.  “Fortunately Gaga came to me with the fishnet stockings and hit singles in hand.” Troy said.  Being a complete artist gives leverage in negotiations between artist and company.

J. Cole also advised that artists not wait for big companies to notice them and make them stars.  Instead he suggests that they should build up their presence until the companies are forced to come talk to you.  It is possible to create interest and a healthy buzz without the backing of a major company.

The Future of Media: Handheld tablet devices and online music services.

This article highlights two significant technology trends that will have a profound impact on the industry. Google’s plans to release new Android tablet that's launching with the Motorola Xoom and a music service are telling of what the future has to hold.

Google music coming with honeycomb

This article shows Apple’s intentions on the manufacture of its signature tablet the iPad. According to the article, they plan to ship over 40 million iPads this year.

Apple buys 60% of the world's touch panel supply

This article denies the notion of Sony withdrawing from Apple’s iTunes distribution channel and possibly becoming a competitor. However, the notion and the rumors are very intriguing. 

 Sony Exec: We Are Not Abandoning iTunes

Steve Stoute: Marketing and Brand Management

INFLUENCERS in-depth Series / STEVE STOUTE from R+I creative on Vimeo.

In this video Steve Stoute provides us with some important insights on what makes people and things cool as well as some of the strategies that he has used in his business Translation marketing (a company that arranges strategic partnerships between Pop Culture icons - Jay-Z, Gwen Stefani, Lebron James, Justin Timberlake, etc. - and Fortune 500 companies.) He also touches on some successful and unsuccessful marketing strategies and the reasons why they either work or do not work. He goes on to explain the effect that the demise of the record industry has had on the marketing and advertising industries. "We must ultimately identify what success looks like and effectively manage the route to success."

The RIAA and Anti-piracy

The RIAA is an organization committed to helping the music business thrive. The association is working closely with law enforcement to pull pirate products off the street and to demonstrate that the consequences for this illegal activity are real.

TH RIAA is continuing our efforts to educate fans about the value of music and the right ways to acquire it and, when necessary, to enforce our rights through the legal system.

Record companies have licensed hundreds of digital partners that offer a range of legal models to fans: download and subscription services, cable and satellite radio services, Internet radio webcasting, legitimate peer-to-peer services, video-on-demand, podcasts, CD kiosks and digital jukeboxes, mobile products such as ringbacks, ringtunes, wallpapers, audio and video downloads and more.

The Learning Curve: Education and the future of Online Video

After reviewing many of the talks on TED.com I found two videos that opened my eyes and changed my perception quite a bit. These articles were chosen because they both show the role that art and entertainment play in education. They are a great compliment to each other. One lays out the flaws in the current education system and the other gives an optimistic outlook on the future of Internet video and its impact on the evolution of education.



The first is Ken Robinson’s Changing Education Paradigms. In this video Ken uses beautiful dry-erase illustrations to tell a story of how we, as a nation, have become hamstrung by an antiquated public school system.
He built trust with the audience by providing factual information and making some very strong assertions about rising drop-out rates, schools’ dwindling stake in the arts and a fictitious ADHD epidemic.
He makes an interesting point that the current public school system was designed for very different societal needs and how we should be educating children to take their place in the economies of the 21st century. Instead we categorize and separate the “academic” from the “non-academic.” Being judged in this way leads to many brilliant people believing that they are not. Sadly, it’s the kids with creativity and artistic ability that are the victims. Ken call for a move away from standardization and towards divergent thinking.



The next video offers what is the most likely solution to the problems created by an inadequate school system. In Who let this guy on the stage, TED founder Chris Anderson talks about the future of Internet video and the change in the evolution of skills. Anderson introduces the concept of crowd-accelerated participation. The concept is not entirely new. However, Internet video has amplified this effect as there are now more groups and online communities that allow for content to be shared more freely. According to Anderson, viewers collectively watch over 80 million hours of YouTube everyday and estimates that in the next 4 years 90 percent of the web’s data will be video. The proliferation of Internet video has changed not only changed entertainment, it has also changed the way that scientists and other professionals exchange information.

Anderson goes on to describe the new ways in which we learn and respond. Thus, completing the learning cycle in a way that was never previously possible.
Anderson argues that students no longer need to have their potential ruined by lousy teachers; they can now sit in front of the World’s best. And from a talent perspective, we have an opportunity to choose the world’s best from a larger pool. This amazing video shows the power of Internet video from a different perspective. We as a people are on the verge of the biggest learning cycle in the history of the world.