It's All About the Living Room (2011 Predictions)

To see more of my 2011 tech predictions - click here This will be the year where the internet finally makes it's way into the living room... and I don't mean as a laptop or iPad as you watch television. For many homes, the TV is already the focal point of the living room and it's been a matter of time before the web and the television hook up in an intelligent, simple way. To date, this has mostly been accomplished by bulky solutions geared towards techies: ie connecting a Mac Mini to the television. But all the trends point towards 2011 being the year that the living room begins to go digital in a more mainstream way: - Television prices have gone way down. You can now buy gorgeous, large TVs for under $1,000 (less than many laptops). Those TVs have numerous inputs are are plug-and-play for other connected devices.

- You can spend more and get an internet connected television... which comes equipped with widgets, apps, etc.

- The content is there: Netflix and Pandora and beloved by millions. Along with a growing number of other great apps and content sources (ie: ESPN3, Hulu, Xfinity.tv, etc) - the web plays an important role in your media consumption. This trend will continue in a massive way (which is why folks like Comcast and ESPN are racing to address it).

- External devices are readily available, relatively inexpensive and are easily integrated: Google TV, Boxee, Apple TV, etc.

- The web now runs in the air. Think about most of your daily computing needs (certainly those that would run on the TV): email, browsing, search, light documents, Facebook, etc. All of this can be done from a browser and does not require a fancy machine... thus enabling lightweight 'computers' like the Google TV to be super effective.

- Someone(s) will figure out more compelling ways to watch TV... which is becoming a passive activity (our TV is frequently on but I am rarely ever fully engaged). Google TV is close: the screen-in-screen approach is compelling. The solution may be appearance related (ie Google TV) or perhaps activity (ie GetGlue, Facebook integration, etc). Whatever it looks like - there is lots of opportunity for innovation... and our TV-watching habits encourage it.

It's All About Personalization (2011)

Two years ago (somehow it's been that long), I gave 20 predictions for digital media & e-commerce in 2009. This year, I am going to do it slightly differently and write individual posts about various themes / predictions in 2011. You can follow them at the tag "predictions". Today's is simple: it's all about personalization. I was reminded this yesterday while spending the day at the-very-exciting ShoeDazzle (note: Polaris is an investor, and you can see more about ShoeDazzle on TechCrunch TV). ShoeDazzle has built a business in part on great product, in part on a great & differentiated shopping experience, and also in part on the power of personalized & social shopping.

And I was reminded again this morning by an email from Gilt Group which looks different than their ordinary daily emails. Rather than a list of today's deals, the email noted items available for my specific shoe size (based on a Gilt purchase months ago). Among a slew of unread emails (some important, some not; some shopping, some personal) - Gilt's stood out because it spoke directly to me.

And as folks' like Gilt look for ways to resonate with their customers, drive conversion efficiency and optimize everything from the experience to search results to the pixel's creating an ad unit... personalization will be the differentiator. In addition, personalization has the opportunity to improve more than the middle of the funnel (conversions) - it can affect the top of the funnel through virality.

Facebook, Twitter and the loads of data that we each produce (and the companies sit atop) enable personalization is ways that previously were not possible. Some of those solutions are out-of-the-box scripts and widgets - others will be baked directly into the product, experience and brand.

If it wasn't a core discussion for you in 2010, personalization should be in 2011. And it should be a discussion for each component of the organization: what does it mean for:

- Product - User acquisition: advertising, virality and social - Conversions & retention: email marketing, search, customer support, landing pages

Is Amazon Acquiring Netflix?

As part of my 2009 Digital Media Predictions, I gave six reasons why Amazon should acquire Netflix (and also merge with eBay):

So why does Amazon + Netflix make sense? A few reasons:

1. In economic hardship or not, Netflix offers an alternative to movie purchasing… which I believe, over time, is eroding (just like music). Offering consumers the ability to either purchase a movie at a flat rate (ie $14.99) or renting it within a monthly subscription (ie $14.99) provides choice while still keeping buyers on Amazon.

2. I love Netflix’s service… but I despise Netflix.com and the site experience which, as I’ve written before, hasn’t changed for years. Amazon would immediately fix this by leveraging their best-in-class search and site experience – and integrating that into the core Amazon platform.

Continue reading for all six reason

According to TechCrunch, it looks as though Amazon may indeed be courting Netflix:

Well here’s a hot little rumor. Netflix stock has surged today on news that it may be acquired by Amazon.

The stock is currently up over 7% in trading today, at an 11-week high. Sources seem pretty thin, based seemingly on stock analysis from places like WhatsTrading.com. And neither company is commenting. But the idea is a hot one.

Update: Bloomberg is also covering: "Netflix Advances on Speculation of Buyout Offer From Amazon.com"

Why Amazon Should Acquire Netflix

As part of my 2009 Digital Media Predictions series, I said that Amazon should acquire or merge with eBay and/or Netflix. Both perspectives are coming… but first, Netflix:

Movie ticket sales are down. DVD and Blu Ray sales are down.

It’s indicative of the changing form of entertainment consumption (torrents, youtube, etc) and of the recession (why buy a $30 movie? Will you ever get $30 of value from it?). And it’s more than just movies – it’s music, newspapers and any other form of entertainment or consumption where the audience must ask, “is this worth paying for when there are so many other alternatives”?

And that’s where Netflix makes total sense to Amazon.

First, if you are going to buy a movie, you have two options: Amazon and iTunes. No other store should be visited because the pricing is unbeatable and search experience is perfectly simple.

But what happens if you no longer have an appetite for buying movies? Or if those movies – even at Amazon’s unbeatable price point – are just too expensive to justify one or two viewings (a question brought into focus thanks to the economy)?

What happens is that you find other alternatives - free and cheaper alternatives.

For those seeking free alternatives, there are countless torrent sites, hulu, and so forth. Not Amazon’s space (nor should it be). For those seeking cheaper alternatives, there is Netflix: unlimited movie rentals for less than the price of a single DVD. For around $15 a month, Anette and I receive 8-16 Blu Ray movies each month from Netflix (depending on what we are watching).

So why does Amazon + Netflix make sense? A few reasons:

1. In economic hardship or not, Netflix offers an alternative to movie purchasing… which I believe, over time, is eroding (just like music). Offering consumers the ability to either purchase a movie at a flat rate (ie $14.99) or renting it within a monthly subscription (ie $14.99) provides choice while still keeping buyers on Amazon.

2. I love Netflix’s service… but I despise Netflix.com and the site experience which, as I’ve written before, hasn’t changed for years. Amazon would immediately fix this by leveraging their best-in-class search and site experience – and integrating that into the core Amazon platform.

3. Amazon is the king of cross merchandising (except here!). With Netflix, Amazon would be able to bundle all sorts of other products, services and goodies that Netflix simply cannot. Renting National Lampoon’s Vacation? Why not buy the entire bundle for $24.99. Or why not keep the DVD for a reduced cost?

4. Amazon is also the king of inventory control and harnessing consumer demand / interest – and that plays into both sides with Netflix. Amazon is able to determine what inventory on Netflix’s or their side should, based on shifting user demand, be moved into sales or rentals. For instance, in six months, the gazillion copies of IronMan that Netflix had stocked are going to be far less valuable than they were at movie release… those copies are more valuable on Amazon than anywhere else (except perhaps eBay). Amazon could create their own media marketplace and sell the used goods after having already made money on those units via the subscription service.

5. Amazon’s Unbox service is cooler than it is successful. Netflix has their own streaming product service / box as well. Neither has made a big dent into Apple’s iTunes, Mac Mini and Apple TV market… but combined, they have greater leverage and flexibility. Perhaps Netflix + Unbox reaches the tipping point that Amazon has been missing. I would be willing to bet that an Amazon “On Demand” product hooked into my TV would be terrific and worth the money. Also creates a new avenue for Amazon to package its digital music offering.

6. A few other random thoughts / possibilities: - Both Netflix and Amazon are masters of shipping… might their be efficiencies or negotiating leverage in pricing? - Both companies spend a great deal on online marketing for media products… there are certainly efficiencies to be gained as a combined entity - Finally, does the combination of Amazon + Netflix allow for movement into new areas like Video Game rentals?

2009 Predictions: More Huffington Posts and Daily Beasts

First there was the Drudge Report.Now there is the Huffington Post. ... And Politico. ... And The Daily Beast.

And as part of my 20 Digital Media Predictions for 2009 series, I am suggesting that there will be others that successfully break into this space.

Why? Because five themes are at work here:

1. For the most part, the major news sources aren't yet hip to online traffic and marketing... that leaves a major opportunity for upstart, web savvy online content players who aggregate and create news.

2. It is (relatively) easy to drive traffic in these formats... and it is scalable. With the right team, it is possible to achieve large numbers quickly.

3. Consumers like their content aggregated and they like it delivered in blog-like formats (real-time, easily digestible, full of links).

4. Launching is affordable as it requires little up-front costs (development, dollars, etc). Meanwhile, data is easily accessible such that the business model and audience appetite can be assessed before warranting a full investment / resourcing.

5. Verticals fetch advertising dollars. And this trend will become more apparent in 2009.

2009 Predictions: Online Video Habits Will Grow Behind Hulu

This is the first in the twenty-part series of my “2009 Digital Media Predictions”… with twenty predictions of course. Each segment is going to add color to one of the predictions from the initial list. And while I have no idea how long this project will take (hopefully it’s completed before 2010) – it certainly keeps me focused. You'll be able to follow all of the predictions here.

Prediction:Video will grow further as people’s appetite for online content moves significantly beyond 30-90 second clips

The success of internet video – and decline of traditional television - has been credited with the dwindling attention span of viewers. The sweet spot for a YouTube clip, for instance, is less than 150 seconds.

And while many argue that this is because we have become less engaged, attentive consumers, I’ll take a different approach: It’s too damn hard for the layman to create good content that lasts over 150 seconds. It either is too difficult to produce or too difficult to remain interesting. Likely both.

But Hulu’s success has proven that we are willing to sit in front of our computers for entire programs. And as CBS Interactive, Fox, YouTube HD and others continue to produce high quality content - our viewing habits will mature. More content is moving online… and more importantly, more high-quality is moving online. As our bandwidth and screens support it – so too will our taste and willingness to watch it. And as these trends change, it will pave the way for computers and online content in the living room.

20 Predictions for Digital Media in 2009

With the new year fast approaching, I've put together a list of 20 digital media trends I predict in the forthcoming year. I plan to write specific posts about each - so for now, these are just headlines:

- Digital Media properties will be significantly more aggressive with online advertising - ... Facebook in particular - iPhone Gaming Will Progress Beyond Novelty - Mobile Apps will find a price point beyond free or $0.99 - iPhone Apps become the MySpace of the music and movie industries: part of every marketing campaign - Android's popularity will require hit hardware... which will take longer than anticipated - Talk of an Amazon + eBay and/or Amazon + Netflix will surface... and make sense - Subscription services will become more common / popular - Online gaming becomes even bigger as people seek free entertainment; makes a dent on traditional video game industry - Acquisitions will be based on break-even and profitable start-ups - "Burn rate" will be the hot buzz word - The mantra "What's Old is New" will ring true - Some companies will distinguish themselves as winners during the downturn thanks to well-positioned services (The Ladders, BillShrink, etc) - In-Video advertising will grow... and begin to work - Video will grow further as people's appetite for online content moves significantly beyond 30-90 second clips - Several roll-ups of small/medium sized content players - A handful of Huffington Post Clones will emerge... successfully - Verticals with deep targetting will succeed... more than properties that are very wide but shallow - There will be a major winner in Behavioral Targetting and Cookie Exchanges - Major content properties (ie newspapers, ESPN) focus sites to push personalities atop headlines