By Kevin Riley

Today, I saw another of those “doom and gloom” videos by one of the “big guru” marketers. The names I have for these bozos are not fit to print (remember, I was once a carpenter and have a rather colourful language – and the worst words pertain to these doomsayers).

Look, nothing annoys me much more (other than a sudden shortage of Irish whiskey at my local liquor store) than hearing these muppets go on about how the Internet as we know it is coming to an end … only to see they are about to plug their new, whizbang $597 membership program that “will solve all your problems”. Excuse me while I stick my finger down my throat.

Why do I hate these bottom dwellers so much? Because they make you panic, worry about your chances of making a good buck online, and throw you off the track you are on. They are destroying your chances of success just so they can sell you their damned program … and that totally pisses me off (sorry for my rude language).

Listen. The one thing I’ve learned after over 30 years of being an entrepreneur is this:

You succeed when you stick to your path, follow through, persevere, and march on to your goal. If you listen to doomsayers, you will be doomed – for you will be led off the path you have chosen.

My advice: When you see these doomsayers, realize that they couldn’t give a damn about you and your success. They care about the money you can put in their pocket. Stop! Step back and analyze their doomsaying with cold reason. Then, walk away.

About The Author

Kevin Riley is an Internet marketer and entrepreneur with over 30 years of experience building and running businesses. For more wise counsel and solid Internet marketing advice visit Product Creation Labs

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Major news publications can ask for subscription fees and erect paywalls all they like, but a recent study shows that 80 percent of U.S. adult Internet users are NOT willing to pay a single red cent to read a daily newspaper online.

Recently The New York Times joined a growing list of major daily news publications that require visitors to pay subscription or other fees to access news content. Other prominent news dailies to do so include The Times in the United Kingdom and the Australian Financial Review in Australia.

They may vary in their approach, with some charging subscription fees, others using a pay-per-article model, and The New York Times, for example, charging per volume of articles read (it bills readers who consume more than 20 articles per month). Regardless of the approach, however, the results of a recent Adweek/Harris Poll indicate that such efforts are turning a lot of readers away and may not be profitable in the long run.

The Adweek/Harris Poll surveyed 2,105 U.S. adults in late March 2011 and found that, when asked what they would be willing to pay per month to read a daily newspaper’s content online:

• 80 percent would pay ‘nothing’
• Of the 20 percent who would pay something:
  • 14 percent would pay between $1 and $10 per month
  • 4 percent would pay between $11 and $20 per month; and
  • 2 percent would pay more than $20 per month.

What may be most disturbing for daily newspapers seeking to charge online readers is that the number of people willing to pay for online daily news content has DROPPED in the last couple of years.

While 20 percent said they would be willing to pay for a daily newspaper’s content online, this is down from the 23 percent who said so in December 2009. What’s more, this drop has occurred during the same period as many newspapers have erected paywalls.

It has also occurred when free, online-only news publications have hit their stride.

Could it be that traditional news dailies are only accelerating their demise by charging for their content… when free online-only daily news sites are emerging, offering content that is acceptable, just as good or even better than that of the traditional publications?

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Reporting its financial results for the first quarter of 2011, Demand Media, Inc. has good and bad news for shareholders. The good news is that revenues have jumped 48 percent compared with those in the first quarter of 2010. The bad news is that the company’s loss has also increased.

Demand Media’s revenues hit $79.5 million in the first quarter of 2011, 48 percent higher than the $53.6 million earned in Q110. The company’s operating loss, however, increased by 31 percent – from $3.2 million in Q110 to $4.2 million in Q111. Its net loss climbed 37 percent – from $4.1 million in the first quarter of last year to $5.6 million in Q111.

Since Demand Media’s performance exceeded analysts’ expectations, its CEO, Richard Rosenblatt was upbeat about the results.

“We reported better-than-expected results in Q1 2011, driven primarily by continued momentum from our owned and operated sites,” Rosenblatt said.

The company’s performance was largely driven by its content and media businesses, which rely on advertising revenue. Content and media revenue was $51.9 million, a huge 72 percent gain over the $30.2 million in Q110. Demand Media’s domain name business also did well, with registrar revenue
for the first quarter of 2011 reaching $27.7 million, 18 percent higher than $23.4 million last year.

Clearly, for all its revenue growth, Demand Media will need to reign in costs before shareholders can truly be happy about their investment in the company.

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Research by Ernst & Young shows that interactive media was the fastest growing sector within the media and entertainment industry in the 2006 to 2010 period. Interactive media companies’ average profitability was 35 percent during the period, with profitability growing by 15 percent.

Traditional media companies, meanwhile, have seen their profitability wither, and their profitability DECREASE over the past four years. Publishers experienced an average 1 percent decline in profitability (based on earnings before interest, tax, depreciation and amortization or ‘EBITDA’) in the 2006-2010 time period, whilst television networks’ profitability dropped by 4 percent, and music companies’ profitability dropped by 5 percent.

According to Ernst & Young, media and entertainment segment profitability and profitability growth rates between 2006 and 2010 were as follows:

Average Profitability (2006 – 2010):

1. Cable operators: 38 percent
2. Interactive media: 35 percent
3. Cable networks: 31 percent
4. Satellite television: 27 percent
5. Publishing: 20 percent
6. Media conglomerates: 19 percent
7. Television broadcasters: 18 percent
8. Film and television producers: 11 percent
9. Electronic games: 11 percent
10. Music: 11 percent

Average Profitability Growth rate (2006 – 2010):

1. Interactive media: 15 percent
2. Electronic games: 14 percent
3. Cable networks: 10 percent
4. Cable operators: 10 percent
5. Satellite TV: 9 percent
6. Film and television production: 7 percent
7. Media conglomerates: 3 percent
8. Publishing: -1 percent
9. Television broadcast: -4 percent
10. Music: -5 percent.

Ernst & Young Media & Entertainment Partner, Mark Besca, expects growth in advertising spending and strong digital distribution strategies to be “the key to growth among these media and entertainment sectors.”

He said:

“Media and entertainment companies are unbundling and repackaging content in new and innovative ways and recognizing that the majority of future revenue will come from services rather than products.”

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Instructing people to register a trademark-infringing domain name may be just as unlawful as registering a domain name that infringes someone’s trademark, according to a ruling by U.S. Federal Judge Ricardo Martinez.

Judge Martinez has found in favor of Microsoft in its lawsuit against Internet marketing ‘gurus’ Amish Shah, Jose A. Rivera a.k.a. Jay Styles and their related corporations Digispace Solutions LLC and YMultimedia LLC.

Judge Martinez confirmed Microsoft’s claim that Amish Shah, Jay Styles and their related companies had induced buyers of the ‘Magic Bullet System’ to infringe Microsoft’s trademarks. According to Microsoft’s lawsuit they had engaged in ‘contributory cybersquatting’ by instructing Magic Bullet System customers to use domain names that included Microsoft trademarks in order to sell emoticon-related software.

In a 9-page ruling, the judge denied a motion by Amish Shah and the other defendants to dismiss Microsoft’s claims that they were liable for cybersquatting and contributory cybersquatting.

There are at least two important points to derive from Judge Martinez’s ruling. Firstly, contributory cybersquatting may well be unlawful. So don’t register a trade-mark infringing domain name… and don’t tell anyone else to do so either.

Secondly, be careful out there! If Amish Shah, Jay Styles and others are selling ‘how to’ Internet marketing courses that may amount to instructing people to break the law… who else is doing the same?

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