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Netflix partnerships could become more attractive to marketers in a down economy, analysts predict

Article by Megan Graham, CNBC.

KEY POINTS
  • A new report from Forrester Research predicts that marketers will double their spend on marketing partnerships with Netflix, like product placement and “other creative marketing integrations with brands.”
  • This will come as marketers increasingly seek more natural and less intrusive ways to reach consumers, instead of bombarding them with traditional ads.
  • Netflix steadfastly denies that it looks to paid product placement in shows as an important current or future source of revenue.

As marketers come up against economic uncertainty in 2020, they will increasingly turn to Netflix to help get their messages to consumers, according to Forrester Research. In a report shared with CNBC Tuesday, the firm predicts that marketers will double the amount of money spent for product placement or other creative marketing integrations with Netflix.

Although the analysts expect Netflix to remain ad-free in the traditional sense, they predict the company will “redefine advertising opportunity by doubling its investment in product placement and other creative marketing integrations with brands.” This would be one way of connecting with consumers in a memorable way “without the creepy personalization and annoying disruption plaguing today’s ads.”

Advertising insiders have often predicted that Netflix will eventually start showing ads, but the company has steadfastly insisted they’re wrong — in response to execs speculating on Netflix’s advertising plans at Cannes Lions, Netflix called comments “wishful thinking from an advertising conference.” Showing ads could deflect subscriber growth: A study earlier this year found23% of respondents would definitely or likely drop their Netflix subscriptions if the service added advertising at its current price point or a dollar cheaper.

A Netflix spokesperson said the prediction is inaccurate and that it’s not doubling its investment in the space, whether financially or in team size. The company said just because a brand is shown on a Netflix show doesn’t mean it has been paid, and said it’s rarely paid for these placements.

But Jim Nail, principal analyst for B2C Marketing at Forrester, believes marketers will keep knocking on Netflix’s door, as audiences are increasingly turning away from traditional TV.

“We know these people aren’t … meditating or playing with their kids. They’re watching stuff, they just happen to not be watching traditional television,” he said.

“The product placement stuff is a nice way for them to tap into some of that revenue without risking the customer relationship in the way that announcing an ad-supported option might,” Nail said.

An arm’s length relationship

Although product placement is all over Netflix, the company says that a lot of the placement is driven by show creators rather than Netflix, and that brands seldom pay Netflix directly for placement.

Forrester points to an estimated $15 million worth of product visibility from brands like Burger King and Coca-Cola in the third season of “Stranger Things…

Link here to read full CNBC article

Forbes: How Blockchain Could Start To Make Waves In Media And Entertainment In 2018 – Catenae Innovation #CTEA

Article by Nelson Granados for Forbes Magazine.

Blockchain technology made big news in December thanks to the bitcoin cryptocurrency surging past $10,000 to a $20,000 peak, the launch of bitcoin futures in major exchanges, and the announcement that the Australian Stock Exchange will use blockchain technology for trade settlement. Blockchain could also start to be implemented in media and entertainment in 2018.

The beauty of blockchain technology is that it enables a digital marketplace that is both decentralized yet tamper resistant. Transactions are recorded chronologically in a distributed ledger that is transparent to its participants, but encrypted so nobody can cheat by changing or faking transactions. Agreed business rules, logic, and contract terms can also be programmed to automate transactions, known as ‘smart contracts’.

To envision potential markets that are ripe for disruption in media and entertainment, you have to think of ones where participants would benefit from both security and transparency, like payments, funding, monetization, and contract enforcement.

Royalties

It is difficult to pay fairly for creative work in a digital world where it is easy to share and distribute copies, so royalty payment mechanisms are ripe for disruption. For example, music streaming sites and rights holders struggle to agree on compensation for trillions of song streams, leading to legal fights such as the $1.6bn lawsuit against Spotify.

The Open Music Initiative (OMI), composed of 200 members including the three major labels Sony, Music, and Warner, as well as YouTube, Netflix, Spotify, and Viacom, seeks to modernize royalty payment mechanisms. OMI revealed last week on CNBC that it’s considering blockchain as a foundational technology.

The vision? A transparent blockchain-based ledger that contains music assets and their rights holders. Smart contracts can then automate royalty payments based on a song’s consumption, including streaming.

Crowdfunding Of Creative Productions

2017 marked the uprising of blockchain start-ups across industries, often funded with initial coin offerings (ICOs). ICOs use cryptocurrencies like bitcoin to crowdfund new ventures.

Creative productions could also leverage ICOs for crowdfunding. In fact, last December  Indiegogo launched its own ICO platform. So ICOs for films and other creative ventures could ramp up in 2018, contingent on how the Securities and Exchange Commission (SEC) applies and imposes securities laws to ICOs.

A blockchain-based crowdfunding platform can securely record funding transactions that are transparent to all investors, allowing them to know real-time where they stand in the pecking order. Upon sale, licensing, or consumption of a creative asset, smart contracts can then automate payments to both rights holders and investors.

For example, iProdoos is a blockchain platform that launches in 2018 to enable aggregation of talent for premium TV & film production, and crowdfunding with traditional or crypto currency. This allows consumers to generate revenue from the projects they fund.

Digital Advertising

Despite the ability to target and personalize ads, the digital advertising ecosystem is pretty inefficient and opaque, to the extent that 40-70% of ad dollars can go to intermediaries. Developed in partnership with Nasdaq, NYIAX recently deployed a blockchain-based ad exchange platform that allows publishers and advertisers to efficiently trade advertising contracts. Richard Bush, Chief Product and Technology Officer, states: “With valuable experience in capital markets, NYIAX has a long-term vision to create a more financially rigorous model leveraging fin-tech best practices with advertising and media.”

Madhive is also deploying an ad exchange targeting digital video content sites. Its CEO, Adam Helfgott, states: “Our platform enables ad-based monetization of video in a secure privacy-compliant way so a viewer’s private information is shared only with an artificially-intelligent agent that pulls in relevant ads.” This could come handy in the EU market, where new strict privacy laws go into effect in May 2018 that require companies to track and protect consumer data.

Distribution

Piracy is one of the main headaches that digital distribution brought to media and entertainment. Phil Gomes, blockchain thought leader at Edelman, states: “I personally believe that a lot of piracy comes from friction in the legal distribution mechanisms. Blockchain technology can enable more frictionless monetization of content to better compete with pirates.” The key is to seamlessly match the legal user with the legally-purchased content, so that the payment mechanism is efficient and it is easier to compete with pirates, which by design don’t process payments.

Clearly, from the examples above, blockchain is not just about digital currencies. And whether it’s these or other ventures that succeed, all experts I talked to agree that 2018 will be a big year for blockchain in media and entertainment. Gomes stated: “2017 was full of corporate pilot projects to test applications of blockchain technology; 2018 will be the year when many of these will be deployed at scale.”

We are entering a hype period for blockchain technology reminiscent of the Internet bubble, so it will be hard to distinguish between hype and true potential. So how to know where the real opportunities are?

Keith Montgomery, Vice-Chairman at CyberOi, a consultancy that guides iProdoos and other blockchain ventures like QuantM.one and Cryptowork, states:  “While in 2017 there were plenty of hype and ICOs, 2018 will be when the first business disruptions happen. The winners will focus on solving real business problems and use media effectively to create communities of mass adoption.”

So stay tuned. If you are in media and entertainment, 2018 will be a year to closely monitor and possibly experiment or invest in blockchain innovation.

Article originally written and published by Nelson Granados, Contributor to Forbes Magazine

Link to the original article here

Growth Company Multicast – Alan Green talks to Nick Timms, CEO of DragApp

Brand Comms CEO Alan Green talks to Nick Timms. Nick is co-founder and CEO at DragApp, a mailbox application that organises your inbox in much the same way that a CRM system organises and segments a company marketing database. In the past year DragApp has amassed over 30,000 users in nearly 200 countries, and already boasts blue chip names such as Uber, Netflix, Spotify and AirBNB on its client list. A highly successful marketing strategy sees DragApp currently generate $36 from every $30 spent. The company are currently raising £600k through FCA regulated Sentient Capital to further accelerate global growth. Info on this and investment documents can be found here

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