DIGITAL IS EATING RADIO’S LUNCH: During this week’s NAB “Radio Show” (think national convention for the Radio industry), sector analysts at Wells Fargo presented an update on the overall state of ad spending in the US. While the focus of the presentation was on Radio’s slice of the pie, which is 7% and on a slightly declining trajectory, it’s fascinating to see the big picture in the graphic below. You really get a sense of how much Digital’s growth is impacting the traditional media types. And the shift doesn’t seem to be slowing down at all. Thanks to continued growth in mobile advertising, Digital is expected to reap approximately 50% of all ad dollars by 2021 – that’s just 4 years from now, people! By that time Radio’s share will have eroded to a measly 5%. Is the Titanic’s band warming up yet?
WTF IS BLOCKCHAIN?: If you’ve been reading the digital media trades lately you’ve probably seen the term blockchain being used more and more. So what is blockchain, and how could it impact our industry? As described in the attached AdExchanger link, blockchain was originally created as a ledger system to track cryptocurrency transactions. It’s an unbreachable and completely transparent way to know who bought and sold non-physical units like bitcoins. (So right now you’re saying that’s great, but what does this have to do with digital media?) Well imagine if the non-physical unit being tracked via blockchain technology was an ad impression. You could eliminate using half a dozen 3rd party tracking pixels on a deal with one blockchain ledger. Or think about data as that non-physical unit. With blockchain tracking of who’s using publishers’ data, you might not ever need to sign another data rights agreement again. Blockchain for media is in its infancy right now, so don’t throw away your DAR tracking tags just yet. But maybe someday blockchain will simplify all of our lives with a more transparent system for transacting.
COULD FACEBOOK START PAYING MUSIC ROYALTIES?: Finally today, there’s an interesting negotiation happening between Facebook and the music industry (the artists, record labels and publishing orgs), around the idea of royalty arrangements for music used in FB users’ video posts. As user generated video content ramps up on FB there’s a growing demand to include known songs in these videos. But right now there’s no way to track usage of songs or much less pay out royalties. So as a workaround FB is considering signing umbrella “one fee” deals with music rights holders, which could total hundreds of millions annually. It’s a creative solve for FB who wants to legally provide music overlays to enhance its video platform. And for the music industry it’s an accretive way to monetize their existing product through a new digital outlet. With both sides showing motivation, it’s a good bet these deals will start getting signed.
Have a great Thursday everyone!