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November 2005 | Vol. IV - No. 11
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Hollywood Toyboy (2): New iPod May Mean Choice Ads


This kid likes action figures? Action figure ads will be downloaded. It's an easy but totally customizable approach to marketing.
There’s a lot going on in media-world, and it all affects advertising, which affects toy selling, which affects … the toy industry. Things are really changing, but what does it mean?

First, let’s look at the new Apple video-enhanced iPod. Steve Jobs lined up Disney/ABC to throw a few shows at it to test the waters. That’s right, for $1.99 viewers can see the episode of “Lost,” or “Desperate Housewives,” that they missed. “Fine and dandy, but how does that sell toys?” I hear you whimper. One word: Ads.

What’s being formulated is a whole new distribution system for television, and a whole new way to target the audience for advertising. Direct advertising for what the audience wants. When they want it. And it can be offered cheaply.

Think of cartoons and children’s shows integrated with ads that specifically target the age and gender of the kid who downloaded it. Right now, the Nielsen ratings don’t tell the advertisers EXACTLY who’s watching and when. But a download can, and will.

If a 10-year-old boy downloads a show, then ads directed at 10-year-old boys will piggyback along with that show. Even more specific, as this technology gets running, those items the boy has bought in the past, or is interested in, will be targeted. This kid likes action figures? Action figure ads will be downloaded. It’s an easy but totally customizable approach to marketing.

And, the ads will be cheaper. Cheap enough, that smaller businesses can get in on it much easier. How?

Here’s the deal: Let’s just say that a TV show is going to get cancelled. Why? It’s only getting 3 million viewers; not enough ad bucks to keep it on the air. But that’s still 3 million people who want to watch the show. Now, this new video-enhanced iPod lets viewers download an episode for $1.99, or, $35 for the whole season. Before the season airs. Which means, if those 3 million viewers all plunk down $35 for their favorite show, before it’s even made, the studio that makes it would have … drum roll, please: $105,000,000, or, $4,038,461.54 per episode. If it costs between $1 and $2.5 million to make the show … that’s a lot of gravy. Ad costs drop.

But that’s not the only Disney/Steve Jobs thing that’s interesting. Bob Iger, new head of Disney, took a super-secret meeting late the night of his first day on the job. Picture it: limos with tinted windows piling onto the studio lot in the darkness of Sunday October 2nd to talk about … Pixar! That’s right, we told you they’d come crawling back.

Forgetting whether they’ll negotiate before or after “Chicken Little” comes out (that’s a big ol’ crap shoot right there), what’s interesting is there are two deals on the table to work with Pixar again: the 3-picture deal, and the 5-picture deal. Which one will Steve Jobs take?

The short deal coincides with Pixar’s proclamation to be producing two films a year by 2009. But the 2nd deal, the 5-picture one — that’s insightful. If Steve opts for it, that would put Pixar under the safe umbrella of Disney for the next six years. And guess what’s happening in those six years? Digital-projection-and-distribution (no more physical film prints)!

When Pixar, groundhog-like, stuck their noses out to see their shadow, the whole map of movie distribution would be changed. What’s more, Steve Jobs and Bob Iger both would like to see DVD versions of their new movies released almost simultaneously as the theatrical release. Gasp! Think of the ad potential there! Plus, satellite beaming of digital films: cheaper to advertise, more direct. DVD’s simultaneous? Can’t skip the ads? Captive audience? Good days ahead. Or so it would seem.

And all the blather about Disney buying Pixar that's just come out? Forgettaboutit! Jobs knows his worth too well; there's no bargain there. And Iger knows that the old saying is true: Why buy the cow when you can get the milk for free?

Heck, we've known about this for a month, and everyone's just now playing catch-up. Too little, too late. If you want to be ahead of the curve, subscribe to TDmonthly now.

Hollywood Toyboy Update

Oh, one last thing: all this iPod video stuff that’s coming — whatever you do, don’t illegally download! Yes, yes, yes, we know: 75% of teens in a recent poll in the Pew Report agree with the statement that, “Music downloading and file-sharing is so easy to do, so it's unrealistic to expect people not to do it.” But Big Brother has found a new way of policing kids' illegal downloading — they’re arresting the grandparents!

That’s right: The Motion Picture Association of America filed a federal lawsuit against Fred Lawrence of Racine, seeking as much as $600,000 in damages for downloading four movies over the Internet file-sharing service iMesh, even though his grandson was the one doing the downloading! Kori Bernards, vice president of corporate communications for MPAA, said the movie industry wants people to understand the consequences of Internet piracy. Duh!

Don’t download illegally. Don’t download and drive, either. It’s just good sense.




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