If you're into classic movies - and are continually frustrated by the lack of selection at your local video store - you'll be happy to hear that MGM has stuck a deal that will see classic films such as The Great Train Robbery, Rocky and Dances with Wolves available to be downloaded on iTunes. For movie lovers, this is a major announcement as MGM has one of the largest film libraries in the world. Movies downloaded from iTunes will be in near-DVD quality at a resolution of 640x480.

It's fascinating to see the movie studios be so pro-active in striking deals to expand their distribution networks on the Web. You have to wonder what the music industry would have been like today if it had adopted the same approach. Of course, music and movies are completely different animals - one creates product that lasts less than five minutes and can be downloaded in seconds, while the other creates two-hour products that can taken a long time to download depending on your Internet connection. Another advantage the movie industry has over music is people tend to have a stronger emotional connection to movies as opposed to most music, which is here today and gone tomorrow.

Fred Wilson has come to the conclusion pre-rolls (ads before a video starts playing) are dead on arrival; while post-rolls (ads played after a video are promising because they're "well targeted and entertaining". He's wrong because its way to early arrive at this conclusion given we're arguably only 11 months into the online video revolution.
To date, pre-rolls have failed to resonate because advertisers are approaching video clips in the same way they approach traditional television. This is misguided because consumers are willing to watch a 15-second or 30-second ad if it's before, during or after a 30-minute or hour-long program. In the online video world where clips last 30 seconds to five minutes, showing a 15 or 30-second ad using a traditional approach before a short video is a disconnect with the medium.
What the advertising industry needs to do is re-calibrate its approach to online video (and pre-rolls and post-rolls) by realizing ads need to be shorter, punchier and more aligned with most video content, which tends to be bubble gum-like entertainment. Look at the way that Rocketboom has made post-rolls part of its modus operandi by creating its own ads, which also tend to be entertaining. The ad industry needs to embrace an edgier and shorter approach to online video spots. They - and Fred Wilson - will discover that pre-rolls work if you do them right.
Note: One more thought about online advertising in general. One of the challenges facing advertisers and advertisers critics is getting their head around the fact it's still early, early days, and there's still an awful lot of experimenting and testing happening. This makes it very difficult to come up with a sweeping generalization about many of the things happening online.

Technorati Tags: Advertising, Video

Edgeio has one of those blogs posts that forces you to take some time to digest it. It's a post based on the idea the gap between the giant portals (Yahoo, AOL, et al) and the rest of the world will shrink/has been shrinking - and we're entering an era of de-portalization (a term coined by Fred Wilson). For bloggers and blog networks, it's a thought-provoking thesis because it suggests that people will consume information in different ways and go to different places to do it. The question is if it's not the portals where people are going to get what they want, then will a new mass market vehicle emerge to supplant them, or will the audience disintegrate much like the TV universe has splintered in 500+ channels? For more, check out Scott Karp (who's back in the blogging saddle after being strangely quiet for awhile) and Mathew Ingram.

Can a tiger change its stripes? Can you turn water into wine? Can Ray Ozzie and Steve Berkowitz transform Microsoft into an Internet company from its Windows/Office roots? This is a question highlighted by the New York Times, which looks at Microsoft efforts to beef up is online operations through initiatives such as Live. At the risk of under-playing the dominance of Internet Explorer and the popularity of MSN.com, Microsoft isn't an Internet company and, frankly, it will never be seen as anything else other than a giant software company with some interesting side projects (e.g. Xbox).

This isn't necessarily a bad thing but it is what it is even though Microsoft has been struggling to convince people otherwise for the past decade. If you take a step back, Microsoft's track record beyond Windows and Office has been, at best, mediocre. A good example is television where it has toiled for years and spent billions of dollars to establish a foothold in the living room. Microsoft has acquired stakes in cable companies, purchased start-ups (anyone remember WebTV?) and, most recently, tried to developed an IP-TV platform for carriers. But after all this time, money and effort, Microsoft only has a modest presence in the TV or video markets.

Microsoft's problem - and challenge - is the Internet isn't part of the corporate DNA so it's hard to really be a vibrant and innovative Internet player when it's not really who you are. A part of this reality is Microsoft continues to make billions of dollars from selling Windows and Office. It's the business so Microsoft's lack of success in diversifying into other businesses is no different than what many other companies have faced over the years. Microsoft, however, is fortunate its core business continues to rumble along as opposed to being forced to diversify because the core business is eroding.

What Microsoft and investors need to accept is Microsoft will continue to be a software company with a Web presence as long as its continue to operate in its present form. If, however, the company decided to break itself into independent operations (Windows/Office, Xbox, MSN/Internet) then it might be a different story because each entity would have its own core mission and raison d'etre. In the meantime, Microsoft will attempt to fight the good Internet fight while chasing after dyed-in-the-wool Internet rivals such as Google and Yahoo.

For more on Berkowitz, News.com recently did a Q&A with him. By the way, read what you will into this quote Berkowitz gave the NYT about life at Microsoft compared with his previous employer, Ask.com: "I’m used to being in companies where I am in a rowboat and I stick an oar in the water to change direction. Now I’m in a cruise ship and I have to call down, Hello, engine room!. Sometimes the connections to the engine room aren’t there."

Technorati Tags: Google, Microsoft

It's still early days but I think Google's move into the radio advertising business could revolutionize (or perhaps evolve) the way the industry does business. In a test project, Google is providing 20 AdWords customers with access to more than 730 stations, which run ads in more than 260 U.S. markets. The AdWords system is linked through Google's dMarc, division, which was acquired for as much as $1.13-billion earlier this year (it was Google's biggest deal before YouTube came along). According to CNet, the 20 selected customers will see a new "audio ads" tag when they log into the AdWords system, which allows them to bid on air spots and target their ads by geography, station type, listener demographics and time of day. Given that the radio business has operated in much the same way for decades, Google is trying to implement a huge new approach to selling advertising. It could be the wave of the future or it could fall flat on its face. Nevertheless, give Google credit for trying something that could potentially be extremely disruptive. As well, the beta test and Google's deal with BSkyB are more evidence of the company's strategic thrust into new markets beyond the online paid-search business.