As part of our coverage of the Search Engine Strategies 2008 event in Chicago (SES Chicago 2008), we have interviewed Mark Lassoff, a noted entrepreneur and founder of the Internet Broadcasting Group. Mark was very kind and patient (thank you Mark!), and agreed to address a few of the questions you have submitted.
Otilia Otlacan: Online streaming media – audio or visual – is perceived to be really taking off, eating away audience from traditionally broadcast media. Is that a reality, or a myth? What is the growth rate of audio and video consumption online?
Mark Lassoff: Reality.
This is a great question. There have been many published studies which have show two simultaneous trends: The growth of online media consumption and the decline of traditional media consumption. The big question remains is one causing the other. I would say, in part, yes. However traditional media is often being its own worst enemy.
Much of my expertise is in radio, so I’ll use the radio industry to illustrate the larger trends, as I interpret them. In the 90’s and early 2000’s there was tremendous consolidation in the terrestrial radio industry. Companies like Clear Channel, Emmis Communications and other purchased hundreds—even thousands—of free air broadcast radio stations. With the consolidation in radio ownership efficiency were found. Instead of one program director programming a station, programming directors would find themselves programming several stations, sometimes across wide geographic territories in communities with complete dispirit needs. Air personalities were “beamed in” or edited in from elsewhere, but tried to sound local. The quality of content on radio suffered deeply to the point where radio became homogenous and uninteresting. Classic Rock stations in Peoria were identical to Rock stations in Bangor. The content became stale and boring quickly—all in the name of efficiency and cost savings for the radio conglomerates.
While this was occurring new forms of audio entertainment media started to appear on the scene. The iPod, internet radio, podcasts, satellite, etc., all made their presence known at the same time radio was pulling back on quality content. New alternatives appeared and consumers made choices.
Had radio not become a total content wasteland, would things have been different? I guess, we’ll never know.
Regarding growth and adoption rate—I would point you towards resources like Edison/Arbitron’s excellent annual report. However, it’s my feeling that the growth has been exponential and will continue to sustain.
Otilia Otlacan: Monetizing streaming media is certainly a challenge and not many players seem to have gone beyond a traditional subscription-based model. What would be, in your opinion, the best way to monetize such content?
Mark Lassoff: With all due respect, I think this is the wrong question. Online media is a business—not some bastard step-child of real media where business rules don’t apply.
The days are over where you can build an audience and figure out how to make money later. Streaming media businesses need to grow up and realize that how to monetize is the first question, not an after-thought once their audience is established. I’m sure that in these economic times we’re going to see a paucity of speculative funding—which means investors are going to look for business models that can better insure monetization and return.
Additionally, monetization hasn’t happened in most areas because the audiences are too broad and diffuse. Most “music” doesn’t draw a specific audience demographic that is easily sold to advertisers looking for efficient targeted CPM’s.
However, for those who produce content that is specific and consumed by a well defined, desirable, specific demographic success is possible.
That having been said, I disagree that not many players have gone to a traditional subscription based model. I’m seeing more pre-roll and post-roll ads for both audio and video, banner and other display advertising in players and interesting things happening in combining audio advertising within a stream with visual display advertising.
There is tremendous opportunity here to go beyond traditional advertising models. What other media besides the internet can immediately deliver targeted qualified prospects at a single click? There is huge opportunity here that we are only now beginning to harness.
Advertising is moving to where the people are—online. The models will continue to develop.
Otilia Otlacan: Staying in the monetization area, can you share some success stories? What makes them a success?
Mark Lassoff: Unfortunately I think direct success with strict monetization of content is still a few years off. There are enough streaming media monetization failures to fill a good sized grave yard. However I think there have been a number of successes in streaming media becoming a critical part of a larger brand building effort.
Aside from the success I’ve seen in monetizing content about monetizing content, I’d site National Association of Photoshop Professionals and their highly regarded and ranked PhotoshopUsertv.com video content. NAPP has done a great job of using their video content as a means to supporting other monetization efforts.
Otilia Otlacan: From a technical perspective, what platforms are most suitable today to carry out advertising within streaming media?
Mark Lassoff: Sorry, I’m not a tech guy.
Otilia Otlacan: Can you tell us more about the branded online radio solution from IBG – what is the most popular use of it? Are there any monetizing options available and if so, what would they be?
Mark Lassoff: We are a branded audio entertainment company. There are two target customers for Internet Broadcasting Group.
The first is consumer brands that are looking for a logical brand extension online. With our clients we flip the traditional advertising model upside-down. Instead of advertising on a radio station, minutes away from a competitive advertisement to an audience of mostly uninterested, passive listeners, IBG allows our clients to become content creators. In partnership with our clients we develop stations geared to attract the very demographics our clients seek. The content is musical, or talk, but all of it is entertaining.
The second focus is on existing publications. We all know that newspapers are in a heap of trouble right now, and are gradually making the transition online. Just this week the venerable Christian Science Monitor announced that it would cease its print publication. We provide a conduit with our publisher partners to move them online with a radio style product and interface that provides the consumer with both on-demand and streaming content.
There are literally dozens of monetization options available, that—especially for our newspaper and magazine clients—provide them with virtually unlimited opportunities to sell advertising to a growing online audience.
About Mark Lassoff:
Mark Lassoff is currently the vice president of media and marketing at NLI Media Group in Austin, Texas (www.nlimediagroup.com). Mark’s team provides full online marketing services from web site design and development to search engine optimization to e-commerce. Mark’s team has won multiple awards for design and is currently one of the fastest growing media firms in Texas. Mark is also the vice-president of the Internet Broadcasting Group (www.internetboadcastinggroup), a start-up which specializes in creating private label radio stations that are lead generators for clients.