Daily Archives: September 1, 2006

Mapping the new digital world

Discussion about the new digital media and entertainment world often suggests it is a battle between content creators (from artists to production companies) and distributors (from telecom to Apple).

While the entertainment and media labor unions have a toehold in the creators and other unions like CWA and IBEW have a foot in the telecom companies, none have much of a presence in another emerging crucial layer of the digital map: content managers like Heavy.com, the subject of this opinion piece in today’s Financial Times. These sites organize access to the multitude of sites producing content across the web and feed to targeted audiences. When successful these sites can attract their own ad dollars as the authors suggest.

Digitalization means the breakup of a world that had seemed stable to many over decades. Collective bargaining systems evolve slowly in reaction to technological change. The emergence of content managers represents yet another challenge to labor relations in the entertainment and media world.

FT.com / Comment & analysis / Comment – Media money will flow to content managers

Madison Avenue comes to the Valley

One of the most significant effects of the new digital world is the challenge it presents for advertisers. With TiVo and other digital video recording systems now spreading, consumers can easily skip through TV ads. This undermines the buying of ads on TV and motivates the search for new ways to tap into consumer eyeballs. Google’s entire business model revolves around its creative ways to advertise goods and services. A key player in the gaming world, Valley-based Electronic Arts, announced recently it is getting on board with new advertising approaches. Game advertising is a rapidly growing revenue stream – expected to reach more than $700 mn a year by 2010. As this story notes, Microsoft is getting in on the action, too, having purchased one of the leading innovators in so-called dynamic advertising, Massive.

This new revenue stream presents a significant challenge to those who develop the content for these games. Some gamers at EA and other companies get stock options that allow them to get in on the action – but they pay a high price in long hours with little job security. The actors who provide their images and voices for the games, however, are in a different position as, essentially, casual employees of the industry. In recent negotiations with the advertising industry, the unions that represent the actors in ads basically punted on the issue, agreeing to modest increases in pay while conducting a 2 year joint study with the employers on the implications of the new technology without changing fundamentally the way working actors are compensated. Of course, two calendar years in technology is like two decades in the old economy so to delay confronting the impact of digitalization carries significant risks for their members.

MercuryNews.com | 09/01/2006 | EA to embed ads that can be updated into 7 games