| Tue, Jun 16, 2009 |
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Updated: MySpace Cuts U.S. Staff By Nearly 30 Percent; CEO: Staffing Level Was Bloated
The shoe has dropped at MySpace and it’s a big one: the News Corp social network is cutting nearly 30 percent of its staff, reducing the domestic staff size to 1,000 from 1,420 as it tries to dial back to a start-up culture—and to make money.
With no mention of staff beyond the U.S., the official announcement and a memo from CEO Owen Van Natta carefully sidestep whether more layoffs are on the way in MySpace’s global operations. Questions to MySpace on the subject were not answered, with a spokeswoman saying MySpace would not go beyond the release.
One of Jon Miller’s mandates as News Corp (NYSE: NWS). CEO of Digital Media and chief digital officer is to set MySpace right. Moving faster than anticipated, Miller replaced CEO Chris DeWolfe with former Facebook exec Van Natta and added Mike Jones and Jason Hirschhorn. . At Facebook, Van Natta was at a phenom on the rise but Jones, who spent time at AOL (NYSE: TWX), and Hirschhorn, who went through waves of reorgs at MTV Networks (NYSE: VIA), are no strangers to once-hot companies that need a serious reheating. Less than six weeks later, the team is backing its promise for change with a dramatic staff cut. Now they have to deliver on doing more with less. Van Natta, who said in a memo that the staffing he inherited was “unsustainable,” promises to communicate “the foundation for our company strategy” this week in meetings across the company, starting Wednesday.
The full release is below:
“As part of a plan to restructure itself into a more innovative, efficient, and entrepreneurial business, MySpace announced today that it will reduce its staff by nearly 30%. This restructuring plan crosses all U.S. divisions of the company and lowers the total number of domestic staff at MySpace to 1,000 employees.
Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company,” said MySpace Chief Executive Officer Owen Van Natta. “I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product.”
“MySpace grew too big considering the realities of today’s marketplace,” said Jonathan Miller, News Corporation’s CEO of Digital Media and Chief Digital Officer. “I believe this restructuring will help MySpace operate much more effectively both structurally and financially moving forward. I am confident in MySpace’s next phase under the leadership of Owen and his team.”
Update: From Van Natta’s staff memo via BusinessInsider: “I believe this is the first difficult step toward a major turnaround – a step that will not only shore us up in the short term, but position us for long term success. We need to become a more innovative company. Becoming more innovative is an ongoing responsibility for all of us, not a one-time effort.”
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| Wed, Jun 10, 2009 |
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Need To Reach Casual Gamers? MTV Says 15-Second Pre-Rolls Work Best
The debate over how much in-game ad spending will rise or fall this year continues, but it’s clear that people—and the advertisers trying to reach them—continue to flock to casual games. And since roughly three-quarters of all sites within *MTV Networks* now have a casual gaming channel, you could say that the company knows a bit about how to make casual games (and the ads running in and around them) appealing. But what about making them effective?
Recently, MTVN (NYSE: VIA) conducted a three-day study of more than 60 gamers at a biometrics lab in Las Vegas; they showed the players various ads and games, all while examining stats like heart rate, respiration, movement patterns and visual attention. Interestingly, they found that 15-second pre-rolls were the most effective way to garner a player’s “focused attention”—beating out 30-second spots, in-game display ads, and even overlays.
Read more of the findings after the jump.
—Don’t interrupt the gameplay: Pre-roll ads commanded up to 85 percent focused attention, MTVN’s study found, meaning that the vast majority of the viewers paid full attention to the ads. However, it should be noted that MTVN did not offer comparisons to other ad formats to see how attention spans varied. Still, the company feels confident enough that 85 perfent focused attention is enough proof that it was better to target players before they actually got involved in the game. And they also learned to keep the ads short. Pre-rolls that were longer than 15-seconds cut “aided recall” by more than half.
“The question we wanted to answer was do ads need to be more disruptive to be effective?” said Jason Witt, GM for MTVN’s Digital Fusion ad unit. “We can always stick a bigger ad in front of somebody. And we found that you don’t have to be more disruptive, by and large. The proof is that 15-second pre-rolls were the most effective.” The study also found that game ads had 8x higher unaided brand awareness over online display ads in general, and fueled a 12x higher intent to purchase.
—Everyone is a gamer: “As a company, this is a really important space for us—even beyond the acquisition of Atom Entertainment and the success of Rock Band,” said Nada Stirratt, MTVN’s EVP of digital ad sales. “From a business standpoint, the notion of gaming is no longer a way that you categorize people, it’s simply a part of entertainment. It’s like moviegoers, it’s a category of behavior. There is no dividing line between ‘moviegoers’ or “non-movie-goers.’ Everybody goes to the movies, so you have to talk about it in degrees, like ‘how many movies do you see?’ Gaming has become very similar. The numbers are invariably high: 80 percent of moms do casual gaming, 7 out of 10 Baby Boomers are into gaming. So for us, the goal is to see what’s the optimal way of connecting to this audience when they’re that rabid and that engaged.”
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Interview: Beat Knecht, CEO, Zattoo: Free To Re-Air?
The CEO of live TV streaming aggregator Zattoo has criticised British broadcasters for failing to work with him, after last week losing several German channels in a legal dispute. Beat Knecht said the BBC - which already streams its own channels online and has tried to push programming through Kangaroo and, together with counterparts, iPlayer and now Canvas - “obviously has a conflict of interest”.
Knecht’s Zattoo has formal agreements for 17 of the 25 channels it carries in the UK, but free-to-air broadcasters haven’t come aboard, leaving it to re-air stations under a legal loophole: “There’s an expectation that the BBC would syndicate, which was the original stance that they had toward us, and then they slipped a note from the strategic controller saying they wouldn’t syndicate until the iPlayer was a success - I find that pretty incredible.”
Zattoo’s channels at home in Zurich and elsewhere are mostly legit, but: “The role we play in the UK is a very minor one compared to Switzerland and Germany; we’re more a continental play right now. Because we resorted to a section of the law that allowed us to transmit the so-called ‘qualifying services’, we don’t have the same squeaky clean standing we do on the continent. In the UK, we’re still getting the hang of viewing habits and the overall landscape - for a small company, it’s very difficult to approach all markets at the same time - it takes work, especially the advertising piece.”
—Ads interrupting channels streams?: If some channels are reluctant, Knecht admits it may be due to scepticism about its advertising model, which inserts animated ads in to the app’s blank video window while it waits for a channel to buffer: “There’s a perception that we interrupt them; people are uneducated about us, but there’s nothing to hide - we’ve left descriptions of our service with the British channels during two-year-long negotiations. We do not interrupt their channel - if the user interrupts their channel because he’s had enough, then we show a click ad.
“It just happens to be a moment of great attention from the user - it’s in no-man’s land, the old channel is gone, the new one is still being buffered. We’ve pioneered the format - the startup ad.” Right now, Zattoo is showing low-value ad network spots, but Knecht says demographic targeting - he’s already delivered Jamie Oliver ads next to scheduled cooking shows and police force ads against crime shows - can lead to higher CPMs: “The revenues are already close to high enough.”
—German legal problem: But Zattoo has since January been under court order to black-out five Universal and Warner Bros. movies aired on German TV channels it carries, the studios having complained it doesn’t own “retransmission” rights. Knecht says that’s “totally fine” but the court should consider the definition of “retransmission” is being constantly revised online nowadays: “Usually, new paths of distribution have brought Hollywood and rights owners more money. We already pay owners huge sums through collecting societies, under the same regimen cable or satellite companies pay.” Nevertheless, the studios’ court victory prompted Zattoo to drop several German MTV channels, fearing a follow-up suit from litigious parent Viacom (NYSE: VIA), as well as what Knecht says were already high carriage costs: “We hope to start retransmitting MTV, we just want to wrap up this (studios) case.”
—In profit by next year: Through the rights issues, Zattoo is “holding up pretty well compared to the rest of the industry”. It’s reached 250,000 registered UK users out of a total 4.5 million in its six European countries, between a quarter and a third of whom actually user the service regularly each month. Three-quarters of revenue comes from ads but a premium offering run together with Swisscom - which sees about 100,000 subscribers pay an average €2.50 a month - makes up the remaining quarter… “that is a relatively healthy mix, I think”: “By and large, the picture is promising - we still burn cash, but much less than we used to - in 2010, we’ll be profitable.”
—The future: Knecht revealed Zattoo will do a premium movie subscription offering together with Germany’s Kinowelt channel. Despite focusing so far on live TV, it may even go down the VOD route: “Those partnerships with broadcasters are blossoming and we’ll see them come to life this and next year; we will simply act as a gateway to their libraries.”
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| Tue, Jun 09, 2009 |
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Interview: Beat Knecht, CEO, Zattoo: Free To Re-Air?
The CEO of live TV streaming aggregator Zattoo has criticised British broadcasters for failing to work with him, after last week losing several German channels in a legal dispute. Beat Knecht said the BBC - which already streams its own channels online and has tried to push programming through Kangaroo and, together with counterparts, iPlayer and now Canvas - “obviously has a conflict of interest”.
Knecht’s Zattoo has formal agreements for 17 of the 25 channels it carries in the UK, but free-to-air broadcasters haven’t come aboard, leaving it to re-air stations under a legal loophole: “There’s an expectation that the BBC would syndicate, which was the original stance that they had toward us, and then they slipped a note from the strategic controller saying they wouldn’t syndicate until the iPlayer was a success - I find that pretty incredible.”
Zattoo’s channels at home in Zurich and elsewhere are mostly legit, but: “The role we play in the UK is a very minor one compared to Switzerland and Germany; we’re more a continental play right now. Because we resorted to a section of the law that allowed us to transmit the so-called ‘qualifying services’, we don’t have the same squeaky clean standing we do on the continent. In the UK, we’re still getting the hang of viewing habits and the overall landscape - for a small company, it’s very difficult to approach all markets at the same time - it takes work, especially the advertising piece.”
—Ads interrupting channels streams?: If some channels are reluctant, Knecht admits it may be due to scepticism about its advertising model, which inserts animated ads in to the app’s blank video window while it waits for a channel to buffer: “There’s a perception that we interrupt them; people are uneducated about us, but there’s nothing to hide - we’ve left descriptions of our service with the British channels during two-year-long negotiations. We do not interrupt their channel - if the user interrupts their channel because he’s had enough, then we show a click ad.
“It just happens to be a moment of great attention from the user - it’s in no-man’s land, the old channel is gone, the new one is still being buffered. We’ve pioneered the format - the startup ad.” Right now, Zattoo is showing low-value ad network spots, but Knecht says demographic targeting - he’s already delivered Jamie Oliver ads next to scheduled cooking shows and police force ads against crime shows - can lead to higher CPMs: “The revenues are already close to high enough.”
—German legal problem: But Zattoo has since January been under court order to black-out five Universal and Warner Bros. movies aired on German TV channels it carries, the studios having complained it doesn’t own “retransmission” rights. Knecht says that’s “totally fine” but the court should consider the definition of “retransmission” is being constantly revised online nowadays: “Usually, new paths of distribution have brought Hollywood and rights owners more money. We already pay owners huge sums through collecting societies, under the same regimen cable or satellite companies pay.” Nevertheless, the studios’ court victory prompted Zattoo to drop several German MTV channels, fearing a follow-up suit from litigious parent Viacom (NYSE: VIA), as well as what Knecht says were already high carriage costs: “We hope to start retransmitting MTV, we just want to wrap up this (studios) case.”
—In profit by next year: Through the rights issues, Zattoo is “holding up pretty well compared to the rest of the industry”. It’s reached 250,000 registered UK users out of a total 4.5 million in its six European countries, between a quarter and a third of whom actually user the service regularly each month. Three-quarters of revenue comes from ads but a premium offering run together with Swisscom - which sees about 100,000 subscribers pay an average €2.50 a month - makes up the remaining quarter… “that is a relatively healthy mix, I think”: “By and large, the picture is promising - we still burn cash, but much less than we used to - in 2010, we’ll be profitable.”
—The future: Knecht revealed Zattoo will do a premium movie subscription offering together with Germany’s Kinowelt channel. Despite focusing so far on live TV, it may even go down the VOD route: “Those partnerships with broadcasters are blossoming and we’ll see them come to life this and next year; we will simply act as a gateway to their libraries.”
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Zattoo Drops MTV, More Channels Over Legal Concerns
The storm clouds are gathering for TV streamer Zattoo. After a court in May told it to block movies broadcasted via Germany’s ARD and ZDF channels following action by Universal and Warner Bros., it’s now yanked MTV’s four German channels from the service, reportedly fearing further legal action. Zattoo has stopped airing MTV Networks’ MTV, Viva, Nick and Comedy Central channels, as well as Tele 5, a German channel showing US movies.
RapidTVNews: “According to MTV Networks (NYSE: VIA) Germany, Zattoo has cancelled the carriage contract because it feared legal consequences instigated by third parties which claim that the service doesn’t resemble conventional cable distribution. The contract concluded between the company, which operates the three channels and Zattoo contained a special cancellation clause in the event that Zattoo incurred copyright problems.”
Zattoo works by re-broadcasting channels to a desktop app using peer-to-peer delivery - the streams include channels’ own TV ads but Zattoo inserts its own when viewers switch channels and open the app. Universal and Warner Bros. protested that Zattoo should not sell ads in to its movies. The company claims to operate in the UK through a legal loophole which allows free-to-air programmes to be re-aired, and has been building direct carriage relationships with other channels (I watched the Champion’s League final whilst making kitchen in the dinner this way). Even if Zattoo can be legally sure of selling its ads in to carried channels’ streams, the increasingly slim CPMs commanded for such things may mitigate against building a large business.
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