Business

Aereo combat: Why the networks should be worried

March 20, 2012
By

Copyright There are certainly cheaper markets to operate in than New York City. And if you were preparing to launch a risky media startup, you might be expected to try opening out of town, where the downside would be smaller, before taking your show to Broadway. Not so for Aereo, the Barry Diller-backed startup formerly know as Bamboom, which offers to stream broadcast TV channels to subscribers over the Internet for viewing on connected devices for $12 a month. Subscribers will also be able to record programs as they would with a DVR and store them in the cloud for later viewing.

Perhaps Diller just craved the spotlight, and wanted to launch in center of the media universe. But a more likely reason for picking New York is that it’s the seat of the federal Second Circuit Court of Appeals, which in 2008 handed down an opinion in Cartoon Network, et. al. v. CSC Holdings, better known as the Cablevision remote-DVR case.  That case, in which the cable operator’s cloud-based DVR service was challenged unsuccessfully by the networks,  is Read more »

Online publishers need an edge

March 19, 2012
By

Digital Publishing A key nugget from the Pew Center’s annual State of the News Media report, out today, neatly captures a critical dynamic of the online content economy that makes it so confounding to content owners.

As Pew notes, the online audience for news is enormous and still growing rapidly. The top 25 news sites in the U.S. topped 342 million average monthly unique visitors in 2011, up 17 percent over 2010. At the same time, online advertising continues to grow at a much faster pace than the general ad market. Total online ad spending hit $32 billion last year, up 23 percent, and online ads now account for 20 percent of total ad spending.

Those two trend lines ought to ad up to good news for online publishers. But as Pew also notes, publishers themselves are capturing very little of the added value created around their content by all that additional advertising revenue. Instead, five top technology providers — Google, Yahoo, Facebook, Microsoft and AOL — captured 68 percent of the online ad revenue in 2011, up from 63 percent in 2010. Read more »

What happens in Vegas

January 9, 2012
By

Las Vegas – The first annual International CES opens here this week and is expected to attract somewhere north of 140,000 gadget makers, press, politicos, and buyers and sellers of stripes, to say nothing of your humble correspondent. Normally this time of year, those same folks would be attending the Consumer Electronics Show here. But the organization that puts on the show, the Consumer Electronics Association, has decided to drop the reference to “consumer electronics” in the name of its signature confab. From now on, the “CES” in International CES won’t actually stand for anything. It’s just the group of three letters people have been using as a handy abbreviation for the Consumer Electronics Show since it stopped being the Radio Manufacturers Show sometime in the 1960s.

The “rebranding,” as the marketing folks say, comes as the show is in fact experiencing something of an identity crisis, underscored last month by word that Microsoft would no longer send its CEO to keynote the confab after this year and would significantly scale back its participation in the show. To longtime show-goers, Microsoft’s decision to drop out is no great loss. Neither Steve Ballmer, nor Bill Gates before him, had said anything worth hearing at Microsoft’s traditional night-before keynote in years. And much of what they did talk about often turned out to be vaporware (Spot watch, anyone?). Read more »

Don’t bet on a Netflix sale

December 13, 2011
By

Video Streaming Another Netflix bubble burst: On Monday, its shares soared more than 6 percent on reports that Verizon was in talks to acquire the video streaming and DVD-by-mail company. By the closing bell Tuesday, the shares had given back nearly all of those gains after several analysts shot down the initial reports.

Still, hope springs eternal, and the shares were up again in the after hours market, perhaps on speculation that even if Verizon isn’t a buyer for the currently beleaguered service, someone else might be.  Maybe, but I wouldn’t bet on it.

The Verizon rumors gained traction initially because Verizon CEO Lowell McAdam acknowledged publicly last week that the telco was interested in the online video streaming business, going so far as to admit to kicking the tires at Hulu when it was being shopped. But of all the potential suitors for Netflix, Verizon is among the least likely.

Most of Netflix’s growth over the next several years is likely to come from outside the U.S., which is not a good fit for Verizon strategically. It also certainly doesn’t want any part of Netflix’s DVD Read more »

Cable networks no longer thick as thieves

December 6, 2011
By

Programming Lots of grumbling out of the UBS Media & Communications conference yesterday over the soaring costs of cable TV programming. As usual whenever the subject of programming costs comes up, much of the ire was directed at ESPN, which squeezes an estimated $4.69 per subscriber from cable and satellite operators — orders of magnitude higher than what any other pay-TV network commands.

What was not usual was the source of the grumbling. It came not from cable and satellite operators, who have long griped about the cost of ESPN, but from other cable network owners, who presumably would love to be in ESPN’s position. Under the growing strain of falling video subscriber numbers industrywide, other networks are growing concerned that ESPN’s position is coming at the expense of their own.

On Monday, Liberty Media CEO Greg Maffei called the rising cost of ESPN a “tax on every American household,” that threatened the long-term economics of the pay-TV business, to say nothing of the long-term comity of the pay-TV industry. “What happens to the bundle of cable if you keep pushing [the price] higher and higher?” he wondered, as reported by the Wall Street Journal.  Read more »