Google has recently signed an interesting distribution deal with “Family Guy” creator Seth McFarlane:
Google will syndicate the program using its AdSense advertising system to thousands of Web sites that are predetermined to be gathering spots for Mr. MacFarlane’s target audience, typically young men. Instead of placing a static ad on a Web page, Google will place [McFarlane’s show’s] video clip. Advertising will be incorporated into the clips in varying ways. In some cases, there will be “preroll” ads, which ask viewers to sit through a TV-style commercial before getting to the video. Some advertisers may opt for a banner to be placed at the bottom of the video clip or a simple “brought to you by” note at the beginning. . . . “We feel that we have recreated the mass media,” said Kim Malone Scott, director of sales and operations for AdSense. . . .
Media Rights Capital, a boutique production company that has the ability to invest about $400 million a year in movies, television and Internet episodes, thinks it has figured out a sustainable business model with the Google Content Network. Every time someone clicks on one of the syndicated videos, the associated advertiser pays a fee, with shares going to Mr. MacFarlane, Media Rights, Google and the Web site that generated the click.
My question is, as revenue is re-negotiated in the future, how soon will it be before we see headlines like this for video content-providers:
Amazon, the online retailing giant with a fast-rising share of the consumer book market, has adopted the literary equivalent of a nuclear option for rebellious publishers who balk at its demands. In the latest in a series of disputes over the division of revenue from online sales, Amazon has disabled the “buy now with 1 click” icon on its British Web site for hundreds of books published by the British unit of Hachette Livre, from back-list Stephen King novels to, naturally, “The Hachette Guide to French Wine.”
The button allows registered users to purchase titles instantly, with free shipping. Customers can still buy the affected books, but they have to navigate to an open marketplace that links them to third-party sellers of new or used books. And they have to pay for shipping.
I suppose a lot depends on the elasticity of demand for the products involved. What’s the demand for Seth McFarlane (as opposed to other young-male-humor) compared with the demand for backlist Stephen King (as opposed to other frisson-inducers)? My sense is that a sense of information glut ends up increasing the power of intermediaries, as weary consumers begin to opt for whatever’s most available.
And while I’m just speculating here…any bets on whether Amazon’s growing dominance will make a Borders/BN merger more likely? Seems like a move very similar to the XM-Sirius merger, though perhaps the relevant market in the radio case is “bigger” (whatever that means) than the one in books.