Friday Funday . . .

HITTING THE VALUE EXCHANGE SWEET SPOT:  Up until now the audio streaming category has been bifurcated into two camps – ad supported free streaming (like Pandora), and subscription-based ad free streaming (which is pretty much every other streamer).  But those well-defined swim lanes are starting to blur thanks to new value exchange-based ad products.  Yesterday Pandora announced the latest chapter in this evolution with the introduction of its new Premium Access product, as described in the attached AdAge article.  Here’s how it works . . . listeners will be invited to watch :15 videos through completion and in return receive Pandora Premium functionality during their listening session.  Through Premium Access listeners can select songs on demand, skip, replay, etc. – which is basically all the functionality you’d get with a paid subscription, but without ever having to whip out the old credit card.  There’s also a huge benefit to sponsoring brands, whose videos must be engaged with in order to unlock the Premium functionality (can anyone say viewability and completion rates?)  With this convergence of listener and advertiser benefits Pandora may have just found that marketing promised land, where what’s good for the listener is also good for the advertiser.

END OF THE ROAD FOR NET NEUTRALITY:  In the end it went down the way we all expected it to.  Yesterday the FCC voted 3-2 along party lines to eliminate Net Neutrality, according to the attached Tech Crunch link.  By deregulating the speed data is transmitted across the internet, ISPs (think Cable operators and Telcos) will be able to throttle up/down the delivery speed of digital publishers.  It’s widely expected that the ISPs will begin creating premium high speed data lanes which they’ll charge publishers to use.  These charges, of course, will be passed on to consumers in the form of higher subscription fees and/or more advertising on sites which use the high speed lanes.  This will inevitably take us to a place where the internet will stop being “free”, and will become a pay as you use experience.  Happy day for the ISPs to be sure, sad day for the rest of us.  (Editor’s Note:  And one other thing – why was FCC Commissioner Ajit Pai drinking out of a larger than life coffee mug during yesterday’s hearing?  Does he just love coffee that much?  Did Reese’s pay him a placement fee to use that mug?  And how many times was the hearing paused for a bio break?  I know these are petty questions, but the dude is on my S-list for killing NN, so this is my way of striking back!)

DISNEY ACQUIRES 21ST CENTURY FOX:  The other big headline yesterday was Disney’s acquisition of 21st Century Fox for $54B in an all-stock deal, according the attached Mashable link.  So what does The Mouse receive for $54,000,000,000?!?  First they get content in the form of the 21st Century Fox movie studio, FX, and the National Geographic network.  Perhaps more importantly they also get distribution through Sky TV (European Cable co) and especially Hulu – which Disney will use to distribute its content OTT when it pulls off Netflix in 2019.  The deal does not include the Fox TV network, Fox Sports or Fox News, which will remain a separate media company.  Disney’s overarching strategy with this move is to vertically integrate the entire entertainment media chain from content creation through distribution, especially on the digital side.  Disney is wise to recognize if they secede digital distribution to Netflix, Amazon Facebook, etc., they’ll lose the ability to control their own destiny in coming years.

Have a great weekend guys!

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