Archive for May, 2010

Wifi Cannibalized

You ever get annoyed with wifi fees in hotels and airplanes? Part of the reason they charge for wifi access is that wifi has cannibalized highly profitable revenue streams. For example, porn on demand offered by hotels has taken a huge hit as hotel visitors stream it for free from online sources.

On a recent flight, I tried streaming a netflix on demand movie instead of paying for a movie from the inflight system. The Gogo wifi on my Virgin America flight didn’t have the bandwith to stream the movie well, but as bandwidth inflight improves, on demand movies from the airline will dramatically decrease. To make up for these lost revenues, locations that offer wifi will have to earn more from wifi than they do today.

Premium Ad Inventory

There are two parts to premium inventory.  Content (brand) and placement of ads in the content.  Without both, its not premium.

However, the best performing inventory isn’t nessecarily on premium content.  In fact, advertisers that want better engagement and better performance should seek out advertising where their ads are better than the content.  Their in luck since there is a lot of mediocre content online.