Jim Keyes, Blockbuster CEO, taught me 5 things

October 28, 2008

I’ve been around the block a few times. By that I mean I have been to more than a handful of big conferences where CEOs talk about why their companies are the cat’s meow. And many times, these CEOs disappoint, falling into the role of simple cheerleader for their brands. We work hard to make sure Forrester Forums escape that pit, but it doesn’t always work.

That’s all in preamble to what I just heard from Jim Keyes, CEO of Blockbuster, who delivered. He took the stage for 45 minutes and told this audience the nitty gritty details of what it’s like to take a company many people have pronounced dead and transform it into a leader.

Jim sold me. Here are five important things I heard from Jim about the future of entertainment:

  1. One customer, many channels. Jim made a compelling case that Blockbuster is the company best positioned to have a true multi-channel entertainment offering: rental, purchase, kiosks, digital downloads, even a set top box strategy which he publicly acknolwedged but indicated would not happen this year. No competitor has the same opportunity to deliver through all possible channels to all possible devices.
  2. The over-the-top set top box business is not there yet. This is probably why Steve Jobs keeps publicly referring to the Apple TV as a “hobby.” While Jim acknowledged that Blockbuster will offer the same kind of product, when I asked him in Q&A to go in more detail, he said that these boxes are ahead of the customer right now and it doesn’t make sense to get one out there just to have one out there. He could subsidize, like he thinks Netflix is doing, but it didn’t make sense right now.
  3. Convenience is king. Putting aside for a moment that in the entertainment business, content is the real king, when it comes to the companies who want to deliver entertainment, convenient access to content is what matters. Jim discussed in great detail (including assumptions about pricing and consumer strategy that were alarmingly frank for a CEO speaking in public) about the business model implications and challenges they face in trying to make access to content convenient. Oh, and he used my Convenience Quotient model from earlier today, so of course I liked it :)
  4. Change is best when it comes from the top. One of the questions we get at every one of our events is, “how do I drive change in my organization to participate in this digital revolution?” Jim led his speech by saying he had a great opportunity if he could “inject change.” So I took the opportunity to ask him just how he planned to do that. His answer was as detailed as all his other comments, but the short of it is that he personally takes the responsibility to inject change, including communicating to every store manager each week. That way he can personally infect them with his own enthusiasm and ideas for the company’s future.
  5. You can’t get too far ahead of your headlights. Those were Jim’s words in response to me asking him the question about whether he’s actually innovating too fast by trialing kiosks and multi-channel experiences. He admitted he might be ahead of consumers just a bit, but was willing to experiment. As long as, he then confessed, that he didn’t get ahead of investors. I think that’s a lot of what is going here: Blockbuster isn’t just managing to customer’s expectations, but to Wall Street’s as well. From what I see, Jim is doing a good job of both. 

As you can see, I’m impressed by what I saw. Jim’s a guy who knows what he’s up to. If Blockbuster is going to turn itself around, I can’t imagine anyone more prepared to do it. More from the forum as it unfolds.

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Cameron Death of NBC on stage saying good things

October 28, 2008

Welcome to Forrester’s Consumer Forum, in Dallas. We’re off to a bang, I have just finished my keynote speech a few minutes ago and now Cameron Death, VP of Digital Content at NBC Universal is speaking.

He put up a slide that I didn’t get to capture with my BlackBerry in time, but it showed the number of people who caught the Heroes season premiere. It was something like 24 million in broadcast (probably including DVRs), 8 million online, and just about 126,000 people in mobile and VOD. Just 126K! Online is hot, the rest is not. (Now if only Heroes had been as good as it was in season 1!).

He is so refreshingly open! My experience with TV execs is that they are very guarded. Perhaps because Cameron is an ex-Microsoft guy who has only been at NBC for a year, he is talking very openly about ratings, DVRs, and other challenges. And he’s very optimistic. Perhaps it’s because NBC is doing very well right now in the online space. NBC’s joint venture with Fox, Hulu.com, is a roaring hit. NBC is having a huge rush online thanks to Sarah Palin/Tina Fey. 

In fact, in a very surreal moment, Cameron read from today’s USA Today which was delivered to his hotel room here at the Gaylord Texan.  He quipped, “it’s interesting there are numbers in here, because I wasn’t given permission to share these numbers, so I’ll just quote USA Today!”

Not only did SNL get its largest TV audience (15 million) in 14 years for the October 18 broadcast with vice presidential candidate Sarah Palin watching Tina Fey impersonate her, but Palin-related SNL skits have been viewed more than 63 million times across the Web… – October 28 paper, Section D, page 1 (update note: originally had incomplete quote here, replaced it with full quote once I had a copy of the paper)

Cameron pointed out that this is clear evidence the digital channel matters, driving not only online activity that dwarfs the broadcasting viewing, but also lifts the broadcast viewing itself.

The forum is shaping up well. I’ll prepare a summary of my speech a little bit later, with some screen shots because there’s some good stuff in there worth talking about. If you want to follow the forum on Twitter, follow “forrester.” I’m also twittering at jmcquivey.


Forrester consumer forum, sneak peek at my speech

October 27, 2008

Well, not all of my speech, I have to save something for the attendees, after all. But I recently had a great conversation with David Armano (VP of Experience Design with Critical Mass, and blogger responsible for Logic + Emotion as well as a contributor to Advertising Age’s DigitalNext blog) and shared with him the basic pieces of my keynote speech which I will give to 600+ people tomorrow morning in Dallas.

David blogged about the speech, connecting to the element he found most interesting, that was my focus on convenience as the path to meeting consumer needs. That’s actually the theme of my speech:

People share a set of universal needs – satisfy those needs with convenience and you will win

It’s something we’ve arrived at after ten years of solid Consumer Technographics research, and I’m excited to be able look back at the data and find evidence of the role of convenience in making products, services, and channels successful.

Hope to see you there. If not, look for my blog posts about the event starting tomorrow and into Wednesday.


As predicted: More media companies putting video on websites

October 21, 2008

It’s not the most amazing insight I came across today, but it is worth pointing out and commenting on. MediaPost yesterday ran a piece about the role of vide on media company websites, see it here: Video Use Will Continue To Rise, Per Web Influencers – 10/20/2008.

The gist of the story is that video is rapidly becoming a critical tool in the online sites of even non-video media companies like newspapers and magazines, half of which — according to the study cited in the article — feature video on their sites.

This is something we’ve been writing about for a while at Forrester, and I spent some time on it at Forrester’s Marketing Forum in LA earlier this year. It’s Phase 2 of what I called a 3-Phase evolution of online video. Phase 1: media companies with video assets and audiences combine the two online. Phase 1 started with ABC.com and came into full view with Hulu.com. Done. Phase 2 is the one we’re in now where media companies with non-video assets but considerable audiences supplement their content with video.

The slide from my Forum deck describing the 3 phases of online video grwoth

The slide describing the 3 phases of online video growth

This started a while back with sites like MarthaStewart.com, which added a very integrated video experience in early 2007. It still continues today as more and more newspaper outlets equip their journalists with cheap little video cameras and train them to capture video while they’re in the field. (This is a broadcast technician’s worst nightmare, all these people capturing video without a real knowledge of what makes for quality video, including lighting, white balance, etc., but as YouTube has shown, web viewers don’t notice or don’t care.)

Phase 3 is when marketers start producing significant video content that begins to compete with the media outlets. We see this already with Land Rover’s Go Beyond site, a fairly ambitious multimedia content site built around the brand. But there are precious few marketers committed to this kind of video experience on the Web just yet. I just spoke to a major financial service company last week who is trying to plan what technology they’ll use to support online video, but they confessed they didn’t really expect to have much video to watch — or many viewers to watch it.

That will change.


Blockbuster CEO coming to speak at Forrester Consumer Forum

October 20, 2008

Just sharing some residual excitement after speaking with Jim Keyes, the CEO of Blockbuster. We recently connected in preparation for Forrester’s Consumer Forum next week. Official forum kickoff is next Tuesday, October 28th, at 8:30am. This year’s forum is in Dallas, at the Gaylord Texan Resort — I’ve never been but I’m told it’s big, in true Texas style.  

 Jim is speaking before lunch on the opening day of the forum and we recently got together on the phone to talk about the event and his plans for what he’ll share with attendees.

Bottom line: Jim is psyched about a multichannel future. I won’t steal any of his thunder here, but suffice it to say, he understands that we are in a very early stage of a dramatic change in the way people consume media. 

And he wants Blockbuster to be in the middle of that. It’s an ambitious goal, but it’s also surprising that he has this as his goal at all. I remember talking to retail CEOs in the late 90s, most of whom didn’t understand that their industry was about to be completely revamped. They started dot-com divisions and then guarded their brick and mortar businesses against those dot-coms. It was not pretty.

Fast forward to now, a similar transformation is about to happen to the video industry. We see a lot of early attempts at innovation, from the over-the-top set top boxes to a cool tidbit recently announced by Time Warner in Hawaii where they’ll put Internet connectivity right into the cable company’s digital set top boxes. (By the way, I’m glad they did since I predicted in 2007 that such experimentation would happen by year-end 2008; we were getting close to the deadline there.) But in the end, everywhere access to video will require that single-channel solutions fade into oblivion. Multichannel is the answer, my friend. 

Anyway, I look forward to hearing Jim speak, I’ll be interviewing him on stage. If you’re there, say hello. If not, I’ll blog from the event so you can at least get the crumbs from the table…


Panel of online TV heavyweights tells it like it is

October 8, 2008

Last night I had a chance to be the peanut butter and jelly in an impressive online video sandwich. I was spread between Michael Eisner on the one side and a panel of online TV heavyweights on the other. I’ll end the metaphor there before it gets out of hand, but it was a power-packed event, sponsored by Veoh Networks, where I presented the results of a study commissioned by Veoh and performed by Forrester Consulting about online video viewers.  

The panel, moderated by Veoh CEO Steve Mitgang, really packed a punch, with Albert Cheng of ABC, arguably the father of online TV viewing, Amanda Richman, SVP of digital at MediaVest, Greg Clayman (you have to follow the link, trust me), EVP of digital distribution at MTV Networks, Tom Morgan, CSO at Move Networks, and Patrick Keane, CMO of CBS Interactive. 

Pardon the lousy Blackberry photo quality

Pardon the lousy Blackberry photo quality

One highlight came early on when the topic of whether online video was cannibalistic of broadcast content or not. This is a question I get a lot, so it was great to hear them all answer with variations on the same theme:
Albert
TV viewing has never been higher. That’s what you would expect from it, you have a much bigger distribution pipe that used to be constrained and now it’s not. Viewing should go up. 
Greg
We went live with full episodes of South Park recently. Since then, South Park ratings have never been higher. 
Tom
Two hours before a show airs, we see a spike of people catching up on prior episodes. For two hours after the show, another spike where people who missed the show that night and didn’t DVR it can watch it to keep up. These are the shoulders of a show if you will, and they are increasing the audience.
I’ll be writing and speaking about this topic for a while to come, because I agree completely…for now. The day will come when habits move away from appointment viewing and everything becomes on-demand, just as Eisner said earlier in the evening.

Engaged online viewers revealed in Veoh-commissioned research

October 8, 2008

As promised, I have some notes from last night’s Veoh Networks event where we debuted the research results from a study commissioned by Veoh and executed by Forrester Consulting, the consulting arm of Forrester Research.
See the press release on Veoh’s site for more detail on the study, which Veoh intends to release next week in its entirety after sharing it with its clients and partners this week. Big thanks to Edwin Wong at Veoh for leading the effort from his side. There’s also more detail from the SmokeJumping blog, posted by Brent Harrison who was also integral to getting the study going. From the release:

The study found that Engaged Viewers (viewers who watch more than an hour of online video a week) make up nearly 40% of all online video viewers and watch nearly 75% of all online video. Of these Engaged Viewers, those who spend the most time consuming and sharing long-form content:

  • Are more likely to watch videos all the way through
  • Pay more attention to online video more than they do TV
  • Interact with and rate the videos they watch more frequently
  • Are twice as likely to recall in-video ads and post-rolls than non-Engaged Viewers
  • Agree more readily that advertising is fair and helps pay for their free experience
  • Consider banner ads and ads that come in between videos (mid-rolls) most effective

The details are even more interesting, and I had the chance to share them with a group of content programmers, ad executives, and other online video enablers. It was a very worthwhile project, given that I could zero in on deep online video viewing behaviors that our own comprehensive Technographics surveys don’t usually allow me to probe.

Especially interesting was the set of in-depth interviews we conducted to supplement the 1,013 surveys. I learned a lot about how online video is taking over people’s lives from those interviews.

I can best summarize the mountain of qualitative insight with this single comment from a 42-year old participant who said, simply:

I can get what I want, when I want.

I couldn’t agree more.